1933 Act File No. 33-31602
1940 Act File No. 811-5950
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 16 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 17
MONEY MARKET OBLIGATIONS TRUST
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
X on September 30, 1995, pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i).
75 days after filing pursuant to paragraph (a)(ii)
on _________________ pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:
X filed the Notice required by that Rule on September 15, 1995; or
intends to file the Notice required by that Rule on or about
____________; or
during the most recent fiscal year did not sell any securities
pursuant to Rule 24f-2 under the Investment Company Act of 1940, and,
pursuant to Rule 24f-2(b)(2), need not file the Notice.
Copies to:
Matthew G. Maloney, Esquire
Dickstein, Shapiro & Morin, L.L.P.
2101 L Street, N.W.
Washington, DC 20037
CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of MONEY MARKET
OBLIGATIONS TRUST, which consists of 6 portfolios, (1) Government
Obligations Fund; (2) Prime Obligations Fund; (3) Tax-Free Obligations
Fund, (4) Treasury Obligations Fund; (5) Automated Cash Management
Trust, and (6) Government Obligations Tax-Managed Fund, relates only to
Government Obligations Tax-Managed Fund, and is comprised of the
following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page (1-6) Cover Page.
Item 2. Synopsis (1-6) Summary of Fund Expenses;
(1-6) Financial Highlights.
Item 3. Condensed Financial
Information (1-6) Performance Information.
Item 4. General Description of
Registrant (1-6) General Information; (1-6)
Investment Information; (1-6)
Investment Objective; (1-6)
Investment Policies; (2,3, 6)
Investment Risks; (1-6) Investment
Limitations; Municipal Securities
(3); (1-6) Regulatory Compliance.
Item 5. Management of the Fund (1-6) Trust Information; (1-6)
Management of the Trust; (1-6)
Distribution of Shares; (1-6)
Administration of the Fund;
Expenses of the Fund and
Institutional Shares/Institutional
Service Shares (6).
Item 6. Capital Stock and Other
Securities (1-6) Dividends; (1-6) Capital
Gains; (1-6) Shareholder
Information; (1-6) Voting Rights;
(1-6) Massachusetts Partnership
Law; (1-6) Federal Income Tax; (1-
6) Pennsylvania Corporate and
Personal Property Taxes.
Item 7. Purchase of Securities Being
Offered (1-6) Net Asset Value; (1-6)
Investing in the Fund; (1-6) Share
Purchases; (1-6) Minimum Investment
Required; (1-6) Subaccounting
Services; (1-6) Certificates and
Confirmations; Retirement Plans
(5).
Item 8. Redemption or Repurchase (1-6) Redeeming Shares; (1-6)
Telephone Redemption; (1-6) By
Mail; (1-6) Accounts with Low
Balances.
Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page (1-6) Cover Page.
Item 11. Table of Contents (1-6) Table of Contents.
Item 12. General Information and
History (1-6) About Federated Investors.
Item 13. Investment Objectives and
Policies (1-6) Investment Policies; (1-6)
Investment Limitations.
Item 14. Management of the Fund (1-6) Money Market Obligations
Trust Management.
Item 15. Control Persons and Principal
Holders of Securities Not Applicable.
Item 16. Investment Advisory and Other
Services (1-6) Investment Advisory Services;
(1-6) Fund Administration; (1-6)
Shareholder Services Plan.
Item 17. Brokerage Allocation (1-6) Brokerage Transactions.
Item 18. Capital Stock and Other
Securities (1-6) Not Applicable.
Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered (1-6) Determining Net Asset Value;
(1-6) Redemption in Kind.
Item 20. Tax Status (1-6) The Fund's Tax Status.
Item 21. Underwriters Not Applicable.
Item 22. Calculation of Performance
Data (1-4) Performance Information.
Item 23. Financial Statements Filed in Part A.
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- --------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
The Institutional Shares of Government Obligations Tax-Managed Fund (the "Fund")
offered by this prospectus represent interests in a diversified portfolio of
Money Market Obligations Trust (the "Trust"), an open-end management investment
company (a mutual fund). The Fund invests in short-term U.S. government
securities to achieve current income consistent with stability of principal and
liquidity. The Fund's investment strategy is intended to enable the Fund to
provide shareholders with dividends that are exempt from state and local income
taxation to the extent permissible by federal and state law. Unless otherwise
exempt, shareholders are required to pay federal income tax on any dividends.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR 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 THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE FUND
ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN BE
NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Combined Statement of Additional Information dated
September 30, 1995, with the Securities and Exchange Commission. The information
contained in the Combined Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Combined Statement
of Additional Information, which is in paper form only, or a paper copy of this
prospectus, if you have received your prospectus electronically, free of charge
by calling 1-800-235-4669. To obtain other information, or make inquiries about
the Fund, contact the Fund at the address listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated September 30, 1995
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS--
INSTITUTIONAL SHARES
2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Limitations 5
Regulatory Compliance 5
TRUST INFORMATION 5
- ------------------------------------------------------
Management of the Trust 5
Distribution of Shares 6
Administration of the Fund 7
Expenses of the Fund and
Institutional Shares 7
NET ASSET VALUE 8
- ------------------------------------------------------
INVESTING IN THE FUND 8
- ------------------------------------------------------
Share Purchases 8
Minimum Investment Required 9
Subaccounting Services 9
Certificates and Confirmations 9
Dividends 9
Capital Gains 9
REDEEMING SHARES 9
- ------------------------------------------------------
By Mail 10
Telephone Redemption 10
Accounts with Low Balances 11
SHAREHOLDER INFORMATION 11
- ------------------------------------------------------
Voting Rights 11
Massachusetts Partnership Law 11
TAX INFORMATION 12
- ------------------------------------------------------
Federal Income Tax 12
Pennsylvania Corporate and
Personal Property Taxes 12
OTHER CLASSES OF SHARES 13
- ------------------------------------------------------
PERFORMANCE INFORMATION 13
- ------------------------------------------------------
FINANCIAL STATEMENTS 14
- ------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS 21
- ------------------------------------------------------
ADDRESSES 22
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)........................................ None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)........................................ None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable)...................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)........... None
Exchange Fee................................................................. None
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)(1)............................................. 0.00%
12b-1 Fee.................................................................... None
Total Other Expenses (after expense reimbursement)........................... 0.20%
Shareholder Services Fee (after waiver)(2)................................. 0.00%
Total Operating Expenses(3)............................................. 0.20%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of the
management fee. The adviser can terminate this voluntary waiver at any time at
its sole discretion. The maximum management fee is 0.20%.
(2) The maximum shareholder services fee is 0.25%.
(3) The total operating expenses would have been 0.85% absent the voluntary
waivers of the management fee, a portion of the shareholder services fee and the
voluntary reimbursement of certain other operating expenses.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "INVESTING IN THE FUND" AND "TRUST INFORMATION." WIRE-TRANSFERRED
REDEMPTIONS OF LESS THAN $5,000 MAY BE SUBJECT TO ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
- ------------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and
(2) redemption at the end of each time
period......................................... $2 $6 $11 $26
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Reference is made to the Report of Independent Public Accountants on page 21.
<TABLE>
<CAPTION>
PERIOD ENDED
JULY 31, 1995(A)
-----------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
- ------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------------------
Net investment income 0.01
- ------------------------------------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------------------------------------
Distributions from net investment income (0.01)
- ------------------------------------------------------------------------ -----------
NET ASSET VALUE, END OF PERIOD $ 1.00
- ------------------------------------------------------------------------ -----------
TOTAL RETURN (B) 0.94%
- ------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------------------------
Expenses 0.20%(c)
- ------------------------------------------------------------------------
Net investment income 5.78%(c)
- ------------------------------------------------------------------------
Expense waiver/reimbursement (d) 0.65%(c)
- ------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------------------------
Net assets, end of period (000 omitted) $3,070
- ------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from June 2, 1995 (date of initial public
investment) to July 31, 1995.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated October 3, 1988. The Declaration of Trust permits the Trust to
offer separate series of shares representing interests in separate portfolios of
securities. The shares in any one portfolio may be offered in separate classes.
With respect to this Fund, as of the date of this prospectus, the Trustees have
established two classes of shares known as Institutional Shares and
Institutional Service Shares. This prospectus relates only to Institutional
Shares of the Fund, which are designed primarily for financial institutions as a
convenient means of accumulating an interest in a professionally managed,
diversified portfolio investing in short-term U.S. government securities. A
minimum initial investment of $25,000 is required.
Eligibility for investment in the Fund is contingent upon an investor
accumulating and maintaining a minimum aggregate investment of $200,000,000 in
Federated funds within a twelve-month period. For this purpose, an investor is
defined as a financial institution or its collective customers, including
affiliate financial institutions and their collective customers, or other
institutions that are determined to qualify by Federated Securities Corp., and
Federated funds are those mutual funds which are distributed by Federated
Securities Corp. or are advised by or administered by investment advisers or
administrators affiliated with Federated Securities Corp. ("Federated Funds").
An investor's minimum investment will be calculated by combining all accounts
the investor maintains with the Federated Funds, which includes the Fund.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is current income consistent with stability
of principal and liquidity. This investment objective cannot be changed without
shareholder approval. The Fund's investment strategy is intended to enable the
Fund to provide shareholders with dividends that are exempt from state and local
income taxation to the extent permissible by federal and state law. While there
is no assurance that the Fund will achieve its investment objective, it
endeavors to do so by following the investment policies described in this
prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing only in U.S. government
securities maturing in 13 months or less. The average maturity of the securities
in the Fund's portfolio, computed on a dollar-weighted basis, will be 90 days or
less. Unless indicated otherwise, the investment policies may be changed by the
Trustees without shareholder approval. Shareholders will be notified before any
material change in these policies becomes effective.
The Fund will limit its investments to investments which, if owned directly, pay
interest exempt from state personal income tax. Therefore, dividends paid by the
Fund may be exempt from state personal income tax.
ACCEPTABLE INVESTMENTS. The Fund invests in U.S. government securities. These
instruments are either issued or guaranteed by the U.S. government, its
agencies, or instrumentalities. These securities include, but are not limited
to:
- direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds; and
- notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as the: Farm Credit System, including the
National Bank for Cooperatives, Farm Credit Banks, and Banks for
Cooperatives; Farmers Home Administration; Federal Home Loan Banks;
Federal Home Loan Mortgage Corporation; Federal National Mortgage
Association; Government National Mortgage Association; and Student Loan
Marketing Association.
Some obligations issued or guaranteed by agencies or instrumentalities of the
U.S. government, such as Government National Mortgage Association participation
certificates, are backed by the full faith and credit of the U.S. Treasury. No
assurances can be given that the U.S. government will provide financial support
to other agencies or instrumentalities, since it is not obligated to do so.
These instrumentalities are supported by:
- the issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;
- discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or
- the credit of the agency or instrumentality.
AGENCY MASTER DEMAND NOTES. The Fund may enter into master demand notes
with various federal agencies and instrumentalities. Under a master demand
note, the Fund has the right to increase or decrease the amount of the note
on a daily basis within specified maximum and minimum amounts. Master
demand notes also normally provide for full or partial repayment upon seven
or more days notice by either the Fund or the borrower and bear interest at
a variable rate. The Fund relies on master demand notes, in part, to
provide daily liquidity. To the extent that the Fund cannot obtain
liquidity through master demand notes, it may be required to maintain a
larger cash position, invest more assets in securities with current
maturities or dispose of assets at a gain or loss to maintain sufficient
liquidity.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Fund to miss a price or yield considered to be advantageous. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices.
Accordingly, the Fund may pay more or less than the market value of the
securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the adviser deems it
appropriate to do so. In addition, the Fund may enter into transactions to sell
its purchase commitments to third parties at
current market values and simultaneously acquire other commitments to purchase
similar securities at later dates. The Fund may realize short-term profits or
losses upon the sale of such commitments.
INVESTMENT LIMITATIONS
The Fund will not borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a money market instrument for a percentage
of its cash value with an agreement to buy it back on a set date) or pledge
securities except, under certain circumstances, the Fund may borrow up to
one-third of the value of its total assets and pledge assets to secure such
borrowings.
The above investment limitation cannot be changed without shareholder approval.
The following limitation, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in this limitation becomes effective.
The Fund will not invest more than 10% of its net assets in illiquid securities.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Combined Statement of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940, as amended. In particular,
the Fund will comply with the various requirements of Rule 2a-7, which regulates
money market mutual funds. The Fund will determine the effective maturity of its
investments according to Rule 2a-7.
The Fund may change these operational policies to reflect changes in the laws
and regulations without the approval of its shareholders.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the Fund's business affairs and for exercising all
the Trust's powers except those reserved for the shareholders. An Executive
Committee of the Board of Trustees handles the Board's responsibilities between
meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Administrative Services, the Fund's investment adviser, subject to direction by
the Trustees. The adviser continually conducts investment research and
supervision for the Fund and is responsible for the purchase and sale of
portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment advisory fee
equal to .20 of 1% of the Fund's average daily net assets. The adviser has
undertaken to reimburse the Fund up to the amount of the advisory fee for
operating expenses in excess of limitations established by certain states.
The adviser also may voluntarily choose to waive a portion of its fee or
reimburse other expenses of the Fund, but reserves the right to terminate
such waiver or reimbursement at any time at its sole discretion.
ADVISER'S BACKGROUND. Federated Administrative Services, a Delaware
business trust, organized on June 14, 1990, is a registered investment
adviser under the Investment Advisers Act of 1940. It is a subsidiary of
Federated Investors. All of the Class A (voting) shares of Federated
Investors are owned by a trust, the trustees of which are John F. Donahue,
Chairman and Trustee of Federated Investors, Mr. Donahue's wife, and Mr.
Donahue's son, J. Christopher Donahue, who is President and Trustee of
Federated Investors.
Federated Administrative Services and other subsidiaries of Federated
Investors serve as investment advisers to a number of investment companies
and private accounts. Certain other subsidiaries also provide
administrative services to a number of investment companies. With over $72
billion invested across more than 260 funds under management and/or
administration by its subsidiaries, as of December 31, 1994, Federated
Investors is one of the largest mutual fund investment managers in the
United States. With more than 1,750 employees, Federated continues to be
led by the management who founded the company in 1955. Federated funds are
presently at work in and through 4,000 financial institutions nationwide.
More than 100,000 investment professionals have selected Federated funds
for their clients.
Both the Trust and the adviser have adopted strict codes of ethics governing the
conduct of all employees who manage the Fund and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Fund's
shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Trustees, and could
result in severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for Institutional Shares
of the Fund. It is a Pennsylvania corporation organized on November 14, 1969,
and is the principal distributor for a number of investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors.
SHAREHOLDER SERVICES. The Fund has entered into a Shareholder Services Agreement
with Federated Shareholder Services, a subsidiary of Federated Investors, under
which the Fund may make payments up to .25 of 1% of the average daily net asset
value of Fund shares, computed at an annual rate, to obtain certain personal
services for shareholders and provide maintenance of shareholder accounts
("shareholder services"). From time to time and for such periods as deemed
appropriate, the amount stated above may be reduced voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services will
either perform shareholder services directly or will select financial
institutions to perform shareholder services. Financial institutions will
receive fees based upon shares owned by their clients or customers. The
schedules of such fees and the basis upon which such fees will be paid will be
determined from time to time by the Fund and Federated Shareholder Services.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate as specified
below:
<TABLE>
<CAPTION>
AVERAGE AGGREGATE
MAXIMUM FEE DAILY NET ASSETS
- --------------------- ------------------------------------
<S> <C>
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares. Average
aggregate daily net assets include those of all mutual funds advised by
affiliates of Federated Investors. Federated Administrative Services may choose
voluntarily to waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, MA, is custodian for the
securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Boston, MA, is transfer agent for the shares of, and dividend disbursing agent
for, the Fund. Federated Services Company is a subsidiary of Federated
Investors.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the Fund
are Arthur Andersen LLP, Pittsburgh, PA.
EXPENSES OF THE FUND AND INSTITUTIONAL SHARES
Holders of shares pay their allocable portion of Fund and Trust expenses.
The Trust expenses for which holders of shares pay their allocable portion
include, but are not limited to: the cost of organizing the Trust and continuing
its existence; registering the Trust with federal and state securities
authorities; Trustees' fees; auditors' fees; the cost of meetings of Trustees;
legal fees of the Trust; association membership dues; and such non-recurring and
extraordinary items as may arise.
The Fund expenses for which holders of shares pay their allocable portion
include, but are not limited to: registering the Fund and shares of the Fund;
investment advisory services; taxes and commissions; custodian fees; insurance
premiums; auditors' fees; and such non-recurring and extraordinary items as may
arise.
At present, no expenses are allocated to Institutional Shares as a class.
However, the Trustees reserve the right to allocate certain expenses to holders
of shares as it deems appropriate ("class expenses"). In any case, class
expenses would be limited to: transfer agent fees as identified by the transfer
agent as attributable to holders of shares; printing and postage expenses
related to preparing and distributing materials such as shareholder reports,
prospectuses and proxies to current shareholders; registration fees paid to the
Securities and Exchange Commission and registration fees paid to state
securities
commissions; expenses related to administrative personnel and services as
required to support holders of shares; legal fees relating solely to shares; and
Trustees' fees incurred as a result of issues relating solely to shares.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund attempts to stabilize the net asset value of shares at $1.00 by valuing
the portfolio securities using the amortized cost method. The net asset value
per share is determined by subtracting liabilities attributable to shares from
the value of Fund assets attributable to shares, and dividing the remainder by
the number of shares outstanding. The Fund cannot guarantee that its net asset
value will always remain at $1.00 per share.
The net asset value is determined at 1:00 p.m., 4:00 p.m. (Eastern time), and as
of the close of trading (normally 4:00 p.m., Eastern time) on the New York Stock
Exchange, Monday through Friday, except on New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares may
be purchased either by wire or mail. The Fund reserves the right to reject any
purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
BY WIRE. To purchase by Federal Reserve wire, call the Fund before 1:00 p.m.
(Eastern time) to place an order. The order is considered received immediately.
Payment by federal funds must be received before 3:00 p.m. (Eastern time) that
day. Federal funds should be wired as follows: Federated Services Company, c/o
State Street Bank and Trust Company, Boston, MA; Attention: EDGEWIRE; For Credit
to: Government Obligations Tax-Managed Fund--Institutional Shares; Fund Number
(this number can be found on the account statement or by contacting the Fund);
Group Number or Order Number; Nominee or Institution Name; and ABA Number
011000028.
BY MAIL. To purchase by mail, send a check made payable to Government
Obligations Tax-Managed Fund--Institutional Shares to: Federated Services
Company, Government Obligations Tax-Managed Fund, P.O. Box 8600, Boston, MA
02266-8600. Orders by mail are considered received when payment by check is
converted into federal funds. This is normally the next business day after the
check is received.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $25,000. Eligibility for investment in the
Fund is contingent upon an investor accumulating and maintaining a minimum
aggregate investment of $200,000,000 in Federated Funds within a twelve-month
period.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent charges a fee based on the level of subaccounting services
rendered. Financial institutions may charge or pass through subaccounting fees
as part of or in addition to normal trust or agency account fees. They may also
charge fees for other services provided which may be related to the ownership of
Fund shares. This prospectus should, therefore, be read together with any
agreement between the customer and the financial institution with regard to the
services provided, the fees charged for those services, and any restrictions and
limitations imposed. State securities laws may require certain financial
institutions such as depository institutions to register as dealers.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases and
redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional shares of the Fund unless cash
payments are requested by writing to the Fund. Shares purchased by wire before
3:00 p.m. (Eastern time) begin earning dividends that day. Shares purchased by
check begin earning dividends the day after the check is converted into federal
funds.
CAPITAL GAINS
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund will distribute in cash or additional shares any realized
net long-term capital gains at least once every 12 months.
REDEEMING SHARES
- --------------------------------------------------------------------------------
Shares are redeemed at their net asset value next determined after Federated
Services Company receives the redemption request. Redemptions will be made on
days on which the Fund computes its net asset value. Redemption requests must be
received in proper form and can be made as described below.
BY MAIL
Shares may be redeemed by sending a written request to: Government Obligations
Tax-Managed Fund, Federated Services Company, P.O. Box 8600, Boston, MA
02266-8600. The written request should state: Government Obligations Tax-Managed
Fund--Institutional Shares; shareholder's name; the account number; and the
share or dollar amount requested. Sign the request exactly as the shares are
registered. Shareholders should call the Fund for assistance in redeeming by
mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by insured mail with the written request to Federated Services
Company, 500 Victory Road--2nd Floor, North Quincy, MA 02171.
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Fund, or a redemption payable other than to
the shareholder of record must have their signatures guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and the transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of the
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Fund. Telephone instructions may be
recorded and if reasonable procedures are not followed by the Fund, it may be
liable for losses due to unauthorized or fraudulent telephone instructions. An
authorization form permitting the Fund to accept telephone requests must first
be completed. Authorization forms and information on this service are available
from Federated Securities Corp.
If the redemption request is received before 1:00 p.m. (Eastern time), the
proceeds will be wired the same day to the shareholder's account at a domestic
commercial bank which is a member of the Federal Reserve System, and those
shares redeemed will not be entitled to that day's dividend. A daily dividend
will be paid on shares redeemed if the redemption request is received after 1:00
p.m. (Eastern time). However, the proceeds are not wired until the following
business day.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail", should be considered. If at any time
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000 or the aggregate
investment in Federated Funds falls below the required minimum of $200,000,000
to be maintained from and after twelve months from account opening, due to
shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights, except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder approval will be
sought only for certain changes in the Trust's or the Fund's operation and for
the election of Trustees under certain circumstances. As of September 6, 1995,
Citizens Trust Co., Providence, RI, owned approximately 38,117,429 shares
(84.29%) of the voting securities of the Fund's Institutional Shares; and
Anderson & Co., Philadelphia, PA, owned approximately 76,759,107 shares (100%)
of the voting securities of the Fund's Institutional Service Shares and,
therefore, may, for certain purposes, be deemed to control the Fund and be able
to affect the outcome of certain matters presented for a vote of shareholders.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders for this purpose shall be called by the
Trustees upon the written request of shareholders owning at least 10% of the
outstanding shares of the Trust.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act
or obligation of the Trust. Therefore, financial loss resulting from liability
as a shareholder will occur only if the Trust itself cannot meet its obligations
to indemnify shareholders and pay judgments against them.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies whether dividends
and distributions are received in cash or as additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston, & Donnelly, counsel to the Trust, Fund
shares may be subject to personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania to the extent that the
portfolio securities in the Fund would be subject to such taxes if owned
directly by residents of those jurisdictions.
OTHER STATE AND LOCAL TAXES. To the extent permissible by federal and state law,
the Fund is structured to provide shareholders with income that is exempt or
excluded from taxation at the state and local level. Substantially all dividends
paid to shareholders residing in certain states will be exempt or excluded from
state income tax. Many states, by statute, judicial decision or administrative
action, have taken the position that dividends of a regulated investment company
such as the Fund that are attributable to interest on obligations of the U.S.
Treasury and certain U.S. government agencies and instrumentalities are the
functional equivalent of interest from such obligations and are, therefore,
exempt from state and local income taxes. Shareholders should be aware of the
application of their state and local tax laws to investments in the Fund.
Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
The Fund also offers another class of shares called Institutional Service
Shares. Institutional Service Shares are sold at net asset value primarily to
accounts for which financial institutions act in an agency or fiduciary capacity
and are subject to a minimum initial investment of $25,000.
All classes are subject to certain of the same expenses.
Institutional Service Shares are distributed with no 12b-1 fees, but are subject
to shareholder services fees.
Expense differences between classes may affect the performance of each class.
To obtain more information and a prospectus for any other class, investors may
call 1-800-235-4669.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time, the Fund advertises its yield, effective yield, and total
return for shares. The performance figures will be calculated separately for
each class of shares.
Yield represents the annualized rate of income earned on an investment over a
seven-day period. It is the annualized dividends earned during the period on an
investment shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but when annualized, the income earned by an
investment is assumed to be reinvested daily. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.
Advertisements and sales literature may also refer to total return. Total return
represents the change, over a specified period of time, in the value of an
investment in the shares after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
GOVERNMENT AGENCIES--100.2%
- ------------------------------------------------------------------------------------
$20,000,000 (a) Federal Farm Credit Bank Discount Note, 5.750%, 8/1/1995 $20,000,000
-----------------------------------------------------------------
59,400,000 (b) Student Loan Marketing Association, 5.790%, 8/1/1995 59,400,000
----------------------------------------------------------------- -----------
TOTAL GOVERNMENT AGENCIES 79,400,000
----------------------------------------------------------------- -----------
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $79,400,000
----------------------------------------------------------------- -----------
</TABLE>
(a) This issue shows the rate of discount at the time of purchase.
(b) Current rate and next reset date shown.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($79,235,107) at July 31, 1995.
(See Notes which are an integral part of the Financial Statements.)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $79,400,000
- --------------------------------------------------------------------------------
Cash 20,148
- --------------------------------------------------------------------------------
Income receivable 211,661
- --------------------------------------------------------------------------------
Deferred expenses 28,667
- -------------------------------------------------------------------------------- -----------
Total assets 79,660,476
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Income distribution payable $367,554
- ----------------------------------------------------------------------
Accrued expenses 57,815
- ---------------------------------------------------------------------- --------
Total liabilities 425,369
- -------------------------------------------------------------------------------- -----------
NET ASSETS for 79,235,107 shares outstanding $79,235,107
- -------------------------------------------------------------------------------- -----------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
Institutional Shares:
($3,070,142 / 3,070,142 shares outstanding) $1.00
- -------------------------------------------------------------------------------- -----------
Institutional Service Shares:
($76,164,965 / 76,164,965 shares outstanding) $1.00
- -------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
STATEMENT OF OPERATIONS
PERIOD ENDED JULY 31, 1995*
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------------------
Interest $734,661
- -------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------
Investment advisory fee $ 24,484
- -------------------------------------------------------------------------
Administrative personnel and services fee 26,329
- -------------------------------------------------------------------------
Custodian fees 4,500
- -------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 1,988
- -------------------------------------------------------------------------
Legal fees 248
- -------------------------------------------------------------------------
Portfolio accounting fees 12,750
- -------------------------------------------------------------------------
Shareholder services fee--Institutional Shares 952
- -------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 29,653
- -------------------------------------------------------------------------
Share registration costs 1,833
- -------------------------------------------------------------------------
Printing and postage 496
- -------------------------------------------------------------------------
Miscellaneous 390
- ------------------------------------------------------------------------- --------
Total expenses 103,623
- -------------------------------------------------------------------------
Deduct--
- ---------------------------------------------------------------
Waiver of investment advisory fee $24,484
- ---------------------------------------------------------------
Waiver of shareholder services fee -- Institutional Shares 952
- ---------------------------------------------------------------
Reimbursement of other operating expenses 23,511 48,947
- --------------------------------------------------------------- ------- --------
Net expenses 54,676
- ------------------------------------------------------------------------------------- --------
Net investment income $679,985
- ------------------------------------------------------------------------------------- --------
</TABLE>
*For the period from May 30, 1995 (date of initial public investment) to July
31, 1995
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
JULY 31, 1995*
--------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------------------
Net investment income $ 679,985
- ---------------------------------------------------------------------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------------------------------
Distributions from net investment income:
- ----------------------------------------------------------------------------
Institutional Shares (22,005)
- ----------------------------------------------------------------------------
Institutional Service Shares (657,980)
- ---------------------------------------------------------------------------- --------------
Change in net assets resulting from distributions to shareholders (679,985)
- ---------------------------------------------------------------------------- --------------
SHARE TRANSACTIONS--
- ----------------------------------------------------------------------------
Proceeds from sale of Shares 95,754,802
- ----------------------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment of
distributions declared 304,922
- ----------------------------------------------------------------------------
Cost of Shares redeemed (16,824,617)
- ---------------------------------------------------------------------------- --------------
Change in net assets resulting from share transactions 79,235,107
- ---------------------------------------------------------------------------- --------------
Change in net assets 79,235,107
- ----------------------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------------------
Beginning of period 0
- ---------------------------------------------------------------------------- --------------
End of period $ 79,235,107
- ---------------------------------------------------------------------------- --------------
</TABLE>
*For the period from May 30, 1995 (date of initial public investment) to July
31, 1995.
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Money Market Obligations 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 six diversified portfolios. The financial
statements included herein present only those of Government Obligations
Tax-Managed Fund (the "Fund"). The financial statements of the other portfolios
are presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held. The
Fund offers two classes of shares; Institutional Shares and Institutional
Service Shares.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
- --------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At July 31, 1995, capital paid-in aggregated $79,235,107.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
JULY 31, 1995*
--------------
<S> <C>
INSTITUTIONAL SHARES
- -----------------------------------------------------------------------------
Shares Sold 4,997,518
- -----------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 2
- -----------------------------------------------------------------------------
Shares redeemed (1,927,378)
- ----------------------------------------------------------------------------- -------------
Net change resulting from Institutional Shares transactions 3,070,142
- ----------------------------------------------------------------------------- -------------
</TABLE>
*For the period from June 2, 1995 (date of initial public investment) to July
31, 1995.
<TABLE>
<CAPTION>
PERIOD ENDED
JULY 31, 1995**
---------------
<S> <C>
INSTITUTIONAL SERVICE SHARES
- ----------------------------------------------------------------------------
Shares Sold 90,757,284
- ----------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 304,920
- ----------------------------------------------------------------------------
Shares redeemed (14,897,239)
- ---------------------------------------------------------------------------- --------------
Net change resulting from Institutional Service Shares transactions 76,164,965
- ---------------------------------------------------------------------------- --------------
Net change resulting from share transactions 79,235,107
- ---------------------------------------------------------------------------- --------------
</TABLE>
**For the period from May 30, 1995 (date of initial public investment) to July
31, 1995.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Administrative Services ("FAS"), the Fund's
investment adviser, (the "Adviser"), receives for its services an annual
investment advisory fee equal to .20 of 1% of the Fund's average daily net
assets. The Adviser may voluntarily choose to waive a portion of its fee and
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver and reimbursement at any time at its sole
discretion.
ADMINISTRATIVE FEE--FAS, under the Administrative Services Agreement, provides
the Fund with administrative personnel and services. The FAS fee is based on the
level of average aggregate daily net assets of all funds advised by subsidiaries
of Federated Investors for the period. The administrative fee
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
- --------------------------------------------------------------------------------
received during the period of the Administrative Services Agreement shall be at
least $125,000 per portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain shareholder accounts. FSS may
voluntarily choose to waive a portion of this fee. FSS can modify or terminate
this voluntary waiver at any time at its sole discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. The fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $26,061 were initially borne
by the Adviser. The Fund has agreed to reimburse the Adviser for the
organizational expenses during the five year period following May 7, 1995 (the
date the Fund first became effective). For the period ended July 31, 1995, the
Fund paid $290 pursuant to this agreement.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
MONEY MARKET OBLIGATIONS TRUST
(Government Obligations Tax-Managed Fund):
We have audited the accompanying statement of assets and liabilities of
Government Obligations Tax-Managed Fund (an investment portfolio of Money Market
Obligations Trust, a Massachusetts business trust), including the schedule of
portfolio investments, as of July 31, 1995, the related statement of operations,
the statement of changes in net assets, and the financial highlights for the
period from May 30, 1995 (date of initial public investment) to July 31, 1995.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of July 31, 1995, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Government Obligations Tax-Managed Fund (an investment portfolio of Money Market
Obligations Trust) as of July 31, 1995, the results of its operations, the
changes in its net assets, and the financial highlights for the period from May
30, 1995 (date of initial public investment) to July 31, 1995, in conformity
with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
September 8, 1995
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Government Obligations Tax-Managed Fund
Institutional Shares Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Investment Adviser
Federated Administrative Services Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8600
Trust Company Boston, Massachusetts 02266-8600
- ------------------------------------------------------------------------------------------------
Transfer Agent & Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, Massachusetts 02266-8600
- ------------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS
TAX-MANAGED FUND
INSTITUTIONAL SHARES
PROSPECTUS
A Diversified Portfolio of Money Market
Obligations Trust, an Open-End Management
Investment Company
Prospectus dated September 30, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 60934N856
G01140-01 (9/95)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
The Institutional Service Shares of Government Obligations Tax-Managed Fund (the
"Fund") offered by this prospectus represent interests in a diversified
portfolio of Money Market Obligations Trust (the "Trust"), an open-end
management investment company (a mutual fund). The Fund invests in short-term
U.S. government securities to achieve current income consistent with stability
of principal and liquidity. The Fund's investment strategy is intended to enable
the Fund to provide shareholders with dividends that are exempt from state and
local income taxation to the extent permissible by federal and state law. Unless
otherwise exempt, shareholders are required to pay federal income tax on any
dividends.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR 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 THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE FUND
ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN BE
NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Combined Statement of Additional Information dated
September 30, 1995, with the Securities and Exchange Commission. The information
contained in the Combined Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Combined Statement
of Additional Information, which is in paper form only, or a paper copy of this
prospectus, if you have received your prospectus electronically, free of charge
by calling 1-800-235-4669. To obtain other information, or make inquiries about
the Fund, contact the Fund at the address listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated September 30, 1995
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS--
INSTITUTIONAL SERVICE SHARES
2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Limitations 5
Regulatory Compliance 5
TRUST INFORMATION 5
- ------------------------------------------------------
Management of the Trust 5
Distribution of Shares 6
Administration of the Fund 7
Expenses of the Fund and
Institutional Service Shares 7
NET ASSET VALUE 8
- ------------------------------------------------------
INVESTING IN THE FUND 8
- ------------------------------------------------------
Share Purchases 8
Minimum Investment Required 9
Subaccounting Services 9
Certificates and Confirmations 9
Dividends 9
Capital Gains 9
REDEEMING SHARES 9
- ------------------------------------------------------
By Mail 10
Telephone Redemption 10
Accounts with Low Balances 11
SHAREHOLDER INFORMATION 11
- ------------------------------------------------------
Voting Rights 11
Massachusetts Partnership Law 11
TAX INFORMATION 12
- ------------------------------------------------------
Federal Income Tax 12
Pennsylvania Corporate and
Personal Property Taxes 12
OTHER CLASSES OF SHARES 12
- ------------------------------------------------------
PERFORMANCE INFORMATION 13
- ------------------------------------------------------
FINANCIAL STATEMENTS
14
- ------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS
21
- ------------------------------------------------------
ADDRESSES 22
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INSTITUTIONAL SERVICE SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)........................................ None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)........................................ None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable)...................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)........... None
Exchange Fee................................................................. None
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)(1)............................................. 0.00%
12b-1 Fee.................................................................... None
Total Other Expenses (after expense reimbursement)........................... 0.45%
Shareholder Services Fee................................................... 0.25%
Total Operating Expenses(2)............................................. 0.45%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of the
management fee. The adviser can terminate this voluntary waiver at any time at
its sole discretion. The maximum management fee is 0.20%.
(2) The total operating expenses would have been 0.85% absent the voluntary
waiver of the management fee and the voluntary reimbursement of certain other
operating expenses.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL SERVICE SHARES OF
THE FUND WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE
DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES, SEE "INVESTING IN THE FUND" AND
"TRUST INFORMATION." WIRE-TRANSFERRED REDEMPTIONS OF LESS THAN $5,000 MAY BE
SUBJECT TO ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and (2)
redemption at the end of each time period........ $5 $14 $25 $57
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
FINANCIAL HIGHLIGHTS-INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Reference is made to the Report of Independent Public Accountants on page 22.
<TABLE>
<CAPTION>
PERIOD ENDED
JULY 31, 1995(A)
----------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
- ---------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------
Net investment income 0.01
- ---------------------------------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------------------------------
Distributions from net investment income (0.01)
- --------------------------------------------------------------------------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00
- --------------------------------------------------------------------------- -----------
TOTAL RETURN (B) 0.95%
- ---------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------------------------
Expenses 0.45%(c)
- ---------------------------------------------------------------------------
Net investment income 5.55%(c)
- ---------------------------------------------------------------------------
Expense waiver/reimbursement (d) 0.40%(c)
- ---------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------
Net assets, end of period (000 omitted) $76,165
- ---------------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from May 30, 1995 (date of initial public
investment) to July 31, 1995.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated October 3, 1988. The Declaration of Trust permits the Trust to
offer separate series of shares representing interests in separate portfolios of
securities. The shares in any one portfolio may be offered in separate classes.
With respect to this Fund, as of the date of this prospectus, the Trustees have
established two classes of shares known as Institutional Service Shares and
Institutional Shares. This prospectus relates only to Institutional Service
Shares of the Fund, which are designed primarily for financial institutions as a
convenient means of accumulating an interest in a professionally managed,
diversified portfolio investing in short-term U.S. government securities. A
minimum initial investment of $25,000 is required.
Eligibility for investment in the Fund is contingent upon an investor
accumulating and maintaining a minimum aggregate investment of $200,000,000 in
Federated funds within a twelve-month period. For this purpose, an investor is
defined as a financial institution or its collective customers, including
affiliate financial institutions and their collective customers, or other
institutions that are determined to qualify by Federated Securities Corp., and
Federated funds are those mutual funds which are distributed by Federated
Securities Corp. or are advised by or administered by investment advisers or
administrators affiliated with Federated Securities Corp. ("Federated Funds").
An investor's minimum investment will be calculated by combining all accounts
the investor maintains with the Federated Funds, which includes the Fund.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is current income consistent with stability
of principal and liquidity. This investment objective cannot be changed without
shareholder approval. The Fund's investment strategy is intended to enable the
Fund to provide shareholders with dividends that are exempt from state and local
income taxation to the extent permissible by federal and state law. While there
is no assurance that the Fund will achieve its investment objective, it
endeavors to do so by following the investment policies described in this
prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing only in U.S. government
securities maturing in 13 months or less. The average maturity of the securities
in the Fund's portfolio, computed on a dollar-weighted basis, will be 90 days or
less. Unless indicated otherwise, the investment policies may be changed by the
Trustees without shareholder approval. Shareholders will be notified before any
material change in these policies becomes effective.
The Fund will limit its investments to investments which, if owned directly, pay
interest exempt from state personal income tax. Therefore, dividends paid by the
Fund may be exempt from state personal income tax.
ACCEPTABLE INVESTMENTS. The Fund invests in U.S. government securities. These
instruments are either issued or guaranteed by the U.S. government, its
agencies, or instrumentalities. These securities include, but are not limited
to:
- direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds; and
- notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as the: Farm Credit System, including the
National Bank for Cooperatives, Farm Credit Banks, and Banks for
Cooperatives; Farmers Home Administration; Federal Home Loan Banks;
Federal Home Loan Mortgage Corporation; Federal National Mortgage
Association; Government National Mortgage Association; and Student Loan
Marketing Association.
Some obligations issued or guaranteed by agencies or instrumentalities of the
U.S. government, such as Government National Mortgage Association participation
certificates, are backed by the full faith and credit of the U.S. Treasury. No
assurances can be given that the U.S. government will provide financial support
to other agencies or instrumentalities, since it is not obligated to do so.
These instrumentalities are supported by:
- the issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;
- discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or
- the credit of the agency or instrumentality.
AGENCY MASTER DEMAND NOTES. The Fund may enter into master demand notes
with various federal agencies and instrumentalities. Under a master demand
note, the Fund has the right to increase or decrease the amount of the note
on a daily basis within specified maximum and minimum amounts. Master
demand notes also normally provide for full or partial repayment upon seven
or more days notice by either the Fund or the borrower and bear interest at
a variable rate. The Fund relies on master demand notes, in part, to
provide daily liquidity. To the extent that the Fund cannot obtain
liquidity through master demand notes, it may be required to maintain a
larger cash position, invest more assets in securities with current
maturities or dispose of assets at a gain or loss to maintain sufficient
liquidity.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Fund to miss a price or yield considered to be advantageous. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices.
Accordingly, the Fund may pay more or less than the market value of the
securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the adviser deems it
appropriate to do so. In addition, the Fund may enter into transactions to sell
its purchase commitments to third parties at
current market values and simultaneously acquire other commitments to purchase
similar securities at later dates. The Fund may realize short-term profits or
losses upon the sale of such commitments.
INVESTMENT LIMITATIONS
The Fund will not borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a money market instrument for a percentage
of its cash value with an agreement to buy it back on a set date) or pledge
securities except, under certain circumstances, the Fund may borrow up to
one-third of the value of its total assets and pledge assets to secure such
borrowings.
The above investment limitation cannot be changed without shareholder approval.
The following limitation, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in this limitation becomes effective.
The Fund will not invest more than 10% of its net assets in illiquid securities.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Combined Statement of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940, as amended. In particular,
the Fund will comply with the various requirements of Rule 2a-7, which regulates
money market mutual funds. The Fund will determine the effective maturity of its
investments according to Rule 2a-7.
The Fund may change these operational policies to reflect changes in the laws
and regulations without the approval of its shareholders.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees are
responsible for managing the Fund's business affairs and for exercising all the
Trust's powers except those reserved for the shareholders. An Executive
Committee of the Board of Trustees handles the Board's responsibilities between
meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Administrative Services, the Fund's investment adviser, subject to direction by
the Trustees. The adviser continually conducts investment research and
supervision for the Fund and is responsible for the purchase and sale of
portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment advisory fee equal
to .20 of 1% of the Fund's average daily net assets. The adviser has
undertaken to reimburse the Fund up to the amount of the advisory fee for
operating expenses in excess of limitations established by certain states.
The adviser also may voluntarily choose to waive a portion of its fee or
reimburse other expenses of the Fund, but reserves the right to terminate
such waiver or reimbursement at any time at its sole discretion.
ADVISER'S BACKGROUND. Federated Administrative Services, a Delaware
business trust, organized on June 14, 1990, is a registered investment
adviser under the Investment Advisers Act of 1940. It is a subsidiary of
Federated Investors. All of the Class A (voting) shares of Federated
Investors are owned by a trust, the trustees of which are John F. Donahue,
Chairman and Trustee of Federated Investors, Mr. Donahue's wife, and Mr.
Donahue's son, J. Christopher Donahue, who is President and Trustee of
Federated Investors.
Federated Administrative Services and other subsidiaries of Federated
Investors serve as investment advisers to a number of investment companies
and private accounts. Certain other subsidiaries also provide
administrative services to a number of investment companies. With over
$72 billion invested across more than 260 funds under management and/or
administration by its subsidiaries, as of December 31, 1994, Federated
Investors is one of the largest mutual fund investment managers in the
United States. With more than 1,750 employees, Federated continues to be
led by the management who founded the company in 1955. Federated funds are
presently at work in and through 4,000 financial institutions nationwide.
More than 100,000 investment professionals have selected Federated funds
for their clients.
Both the Trust and the adviser have adopted strict codes of ethics governing the
conduct of all employees who manage the Fund and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Fund's
shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Trustees, and could
result in severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for Institutional
Service Shares of the Fund. It is a Pennsylvania corporation organized on
November 14, 1969, and is the principal distributor for a number of investment
companies. Federated Securities Corp. is a subsidiary of Federated Investors.
SHAREHOLDER SERVICES. The Fund has entered into a Shareholder Services Agreement
with Federated Shareholder Services, a subsidiary of Federated Investors, under
which the Fund may make payments up to .25 of 1% of the average daily net asset
value of Fund shares, computed at an annual rate, to obtain certain personal
services for shareholders and provide maintenance of shareholder accounts
("shareholder services"). From time to time and for such periods as deemed
appropriate, the amount stated above may be reduced voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services will
either perform shareholder services directly or will select financial
institutions to perform shareholder services. Financial institutions will
receive fees based upon shares owned by their clients or customers. The
schedules of such fees and the basis upon which such fees will be paid will be
determined from time to time by the Fund and Federated Shareholder Services.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate as specified
below:
<TABLE>
<CAPTION>
AVERAGE AGGREGATE
MAXIMUM FEE DAILY NET ASSETS
- --------------------- ------------------------------------
<S> <C>
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares. Average
aggregate daily net assets include those of all mutual funds advised by
affiliates of Federated Investors. Federated Administrative Services may choose
voluntarily to waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, MA, is custodian for the
securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Boston, MA, is transfer agent for the shares of, and dividend disbursing agent
for, the Fund. Federated Services Company is a subsidiary of Federated
Investors.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the Fund
are Arthur Andersen LLP, Pittsburgh, PA.
EXPENSES OF THE FUND AND INSTITUTIONAL SERVICE SHARES
Holders of shares pay their allocable portion of Fund and Trust expenses.
The Trust expenses for which holders of shares pay their allocable portion
include, but are not limited to: the cost of organizing the Trust and continuing
its existence; registering the Trust with federal and state securities
authorities; Trustees' fees; auditors' fees; the cost of meetings of Trustees;
legal fees of the Trust; association membership dues; and such non-recurring and
extraordinary items as may arise.
The Fund expenses for which holders of shares pay their allocable portion
include, but are not limited to: registering the Fund and shares of the Fund;
investment advisory services; taxes and commissions; custodian fees; insurance
premiums; auditors' fees; and such non-recurring and extraordinary items as may
arise.
At present, the only expenses which are allocated specifically to Institutional
Service Shares as a class are shareholder services fees. However, the Trustees
reserve the right to allocate certain other expenses to holders of shares as it
deems appropriate ("class expenses"). In any case, class expenses would be
limited to: transfer agent fees as identified by the transfer agent as
attributable to holders of shares; printing and postage expenses related to
preparing and distributing materials such as shareholder reports, prospectuses
and proxies to current shareholders; registration fees paid to the Securities
and
Exchange Commission and registration fees paid to state securities commissions;
expenses related to administrative personnel and services as required to support
holders of shares; legal fees relating solely to shares; and Trustees' fees
incurred as a result of issues relating solely to shares.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund attempts to stabilize the net asset value of shares at $1.00 by valuing
the portfolio securities using the amortized cost method. The net asset value
per share is determined by subtracting liabilities attributable to shares from
the value of Fund assets attributable to shares, and dividing the remainder by
the number of shares outstanding. The Fund cannot guarantee that its net asset
value will always remain at $1.00 per share.
The net asset value is determined at 1:00 p.m., 4:00 p.m. (Eastern time), and as
of the close of trading (normally 4:00 p.m., Eastern time) on the New York Stock
Exchange, Monday through Friday, except on New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares may
be purchased either by wire or mail. The Fund reserves the right to reject any
purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
BY WIRE. To purchase by Federal Reserve wire, call the Fund before 1:00 p.m.
(Eastern time) to place an order. The order is considered received immediately.
Payment by federal funds must be received before 3:00 p.m. (Eastern time) that
day. Federal funds should be wired as follows: Federated Services Company, c/o
State Street Bank and Trust Company, Boston, MA; Attention: EDGEWIRE; For Credit
to: Government Obligations Tax-Managed Fund -- Institutional Service Shares;
Fund Number (this number can be found on the account statement or by contacting
the Fund); Group Number or Order Number; Nominee or Institution Name; and ABA
Number 011000028.
BY MAIL. To purchase by mail, send a check made payable to Government
Obligations Tax-Managed Fund--Institutional Service Shares to: Federated
Services Company, Government Obligations Tax-Managed Fund, P.O. Box 8600,
Boston, MA 02266-8600. Orders by mail are considered received when payment by
check is converted into federal funds. This is normally the next business day
after the check is received.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $25,000. Eligibility for investment in the
Fund is contingent upon an investor accumulating and maintaining a minimum
aggregate investment of $200,000,000 in Federated Funds within a twelve-month
period.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent charges a fee based on the level of subaccounting services
rendered. Financial institutions may charge or pass through subaccounting fees
as part of or in addition to normal trust or agency account fees. They may also
charge fees for other services provided which may be related to the ownership of
Fund shares. This prospectus should, therefore, be read together with any
agreement between the customer and the financial institution with regard to the
services provided, the fees charged for those services, and any restrictions and
limitations imposed. State securities laws may require certain financial
institutions such as depository institutions to register as dealers.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases and
redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional shares of the Fund unless cash
payments are requested by writing to the Fund. Shares purchased by wire before
3:00 p.m. (Eastern time) begin earning dividends that day. Shares purchased by
check begin earning dividends the day after the check is converted into federal
funds.
CAPITAL GAINS
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund will distribute in cash or additional shares any realized
net long-term capital gains at least once every 12 months.
REDEEMING SHARES
- --------------------------------------------------------------------------------
Shares are redeemed at their net asset value next determined after Federated
Services Company receives the redemption request. Redemptions will be made on
days on which the Fund computes its net asset value. Redemption requests must be
received in proper form and can be made as described below.
BY MAIL
Shares may be redeemed by sending a written request to: Government Obligations
Tax-Managed Fund, Federated Services Company, P.O. Box 8600, Boston, MA
02266-8600. The written request should state: Government Obligations Tax-Managed
Fund -- Institutional Service Shares; shareholder's name; the account number;
and the share or dollar amount requested. Sign the request exactly as the shares
are registered. Shareholders should call the Fund for assistance in redeeming by
mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by insured mail with the written request to Federated Services
Company, 500 Victory Road-2nd Floor, North Quincy, MA 02171.
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Fund, or a redemption payable other than to
the shareholder of record must have their signatures guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and the transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of the
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Fund. Telephone instructions may be
recorded and if reasonable procedures are not followed by the Fund, it may be
liable for losses due to unauthorized or fraudulent telephone instructions. An
authorization form permitting the Fund to accept telephone requests must first
be completed. Authorization forms and information on this service are available
from Federated Securities Corp.
If the redemption request is received before 1:00 p.m. (Eastern time), the
proceeds will be wired the same day to the shareholder's account at a domestic
commercial bank which is a member of the Federal Reserve System, and those
shares redeemed will not be entitled to that day's dividend. A daily dividend
will be paid on shares redeemed if the redemption request is received after 1:00
p.m. (Eastern time). However, the proceeds are not wired until the following
business day.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail", should be considered. If at any time
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000 or the aggregate
investment in Federated Funds falls below the required minimum of $200,000,000
to be maintained from and after twelve months from account opening, due to
shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights, except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder approval will be
sought only for certain changes in the Trust's or the Fund's operation and for
the election of Trustees under certain circumstances. As of September 6, 1995,
Citizens Trust Co., Providence, RI, owned approximately 38,117,429 shares
(84.29%) of the voting securities of the Fund's Institutional Shares; and
Anderson & Co., Philadelphia, PA, owned approximately 76,759,107 shares (100%)
of the voting securities of the Fund's Institutional Service Shares and,
therefore, may for certain purposes, be deemed to control the Fund and be able
to affect the outcome of certain matters presented for a vote of shareholders.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders for this purpose shall be called by the
Trustees upon the written request of shareholders owning at least 10% of the
outstanding shares of the Trust.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act
or obligation of the Trust. Therefore, financial loss resulting from liability
as a shareholder will occur only if the Trust itself cannot meet its obligations
to indemnify shareholders and pay judgments against them.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies whether dividends
and distributions are received in cash or as additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston, & Donnelly, counsel to the Trust, Fund
shares may be subject to personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania to the extent that the
portfolio securities in the Fund would be subject to such taxes if owned
directly by residents of those jurisdictions.
OTHER STATE AND LOCAL TAXES. To the extent permissible by federal and state law,
the Fund is structured to provide shareholders with income that is exempt or
excluded from taxation at the state and local level. Substantially all dividends
paid to shareholders residing in certain states will be exempt or excluded from
state income tax. Many states, by statute, judicial decision or administrative
action, have taken the position that dividends of a regulated investment company
such as the Fund that are attributable to interest on obligations of the U.S.
Treasury and certain U.S. government agencies and instrumentalities are the
functional equivalent of interest from such obligations and are, therefore,
exempt from state and local income taxes. Shareholders should be aware of the
application of their state and local tax laws to investments in the Fund.
Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
The Fund also offers another class of shares called Institutional Shares.
Institutional Shares are sold at net asset value primarily to accounts for which
financial institutions act in an agency or fiduciary capacity and are subject to
a minimum initial investment of $25,000.
All classes are subject to certain of the same expenses.
Institutional Shares are distributed with no 12b-1 fees. Currently,
Institutional Shares are not accruing shareholder services fees.
Expense differences between classes may affect the performance of each class.
To obtain more information and a prospectus for any other class, investors may
call 1-800-235-4669.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time, the Fund advertises its yield, effective yield, and total
return for shares. The performance figures will be calculated separately for
each class of shares.
Yield represents the annualized rate of income earned on an investment over a
seven-day period. It is the annualized dividends earned during the period on an
investment shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but when annualized, the income earned by an
investment is assumed to be reinvested daily. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.
Advertisements and sales literature may also refer to total return. Total return
represents the change, over a specified period of time, in the value of an
investment in the shares after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- -------------------------------------------------------------- --------------
<C> <C> <S> <C>
GOVERNMENT AGENCIES--100.2%
- ---------------------------------------------------------------------------------
$20,000,000 (a) Federal Farm Credit Bank Discount Note, 5.750%, 8/1/1995 $ 20,000,000
--------------------------------------------------------------
59,400,000 (b) Student Loan Marketing Association, 5.790%, 8/1/1995 59,400,000
-------------------------------------------------------------- --------------
TOTAL GOVERNMENT AGENCIES 79,400,000
-------------------------------------------------------------- --------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 79,400,000
-------------------------------------------------------------- --------------
</TABLE>
(a) This issue shows the rate of discount at the time of purchase.
(b) Current rate and next reset date shown.
(c) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($79,235,107) at July 31, 1995.
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $79,400,000
- --------------------------------------------------------------------------------
Cash 20,148
- --------------------------------------------------------------------------------
Income receivable 211,661
- --------------------------------------------------------------------------------
Deferred expenses 28,667
- -------------------------------------------------------------------------------- -----------
Total assets 79,660,476
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Income distribution payable $367,554
- ----------------------------------------------------------------------
Accrued expenses 57,815
- ---------------------------------------------------------------------- --------
Total liabilities 425,369
- -------------------------------------------------------------------------------- -----------
NET ASSETS for 79,235,107 shares outstanding $79,235,107
- -------------------------------------------------------------------------------- -----------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
Institutional Shares:
($3,070,142 / 3,070,142 shares outstanding) $1.00
- -------------------------------------------------------------------------------- -----------
Institutional Service Shares:
($76,164,965 / 76,164,965 shares outstanding) $1.00
- -------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
STATEMENT OF OPERATIONS
PERIOD ENDED JULY 31, 1995*
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------------------
Interest $734,661
- -------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------
Investment advisory fee $ 24,484
- -------------------------------------------------------------------------
Administrative personnel and services fee 26,329
- -------------------------------------------------------------------------
Custodian fees 4,500
- -------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 1,988
- -------------------------------------------------------------------------
Legal fees 248
- -------------------------------------------------------------------------
Portfolio accounting fees 12,750
- -------------------------------------------------------------------------
Shareholder services fee--Institutional Shares 952
- -------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 29,653
- -------------------------------------------------------------------------
Share registration costs 1,833
- -------------------------------------------------------------------------
Printing and postage 496
- -------------------------------------------------------------------------
Miscellaneous 390
- ------------------------------------------------------------------------- --------
Total expenses 103,623
- -------------------------------------------------------------------------
Deduct--
- ---------------------------------------------------------------
Waiver of investment advisory fee $24,484
- ---------------------------------------------------------------
Waiver of shareholder services fee -- Institutional Shares 952
- ---------------------------------------------------------------
Reimbursement of other operating expenses 23,511 48,947
- --------------------------------------------------------------- ------- --------
Net expenses 54,676
- ------------------------------------------------------------------------------------- --------
Net investment income $679,985
- ------------------------------------------------------------------------------------- --------
</TABLE>
*For the period from May 30, 1995 (date of initial public investment) to July
31, 1995
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
JULY 31, 1995*
--------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------------------
Net investment income $ 679,985
- ---------------------------------------------------------------------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------------------------------
Distributions from net investment income:
- ----------------------------------------------------------------------------
Institutional Shares (22,005)
- ----------------------------------------------------------------------------
Institutional Service Shares (657,980)
- ---------------------------------------------------------------------------- --------------
Change in net assets resulting from distributions to shareholders (679,985)
- ---------------------------------------------------------------------------- --------------
SHARE TRANSACTIONS--
- ----------------------------------------------------------------------------
Proceeds from sale of Shares 95,754,802
- ----------------------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment of
distributions declared 304,922
- ----------------------------------------------------------------------------
Cost of Shares redeemed (16,824,617)
- ---------------------------------------------------------------------------- --------------
Change in net assets resulting from share transactions 79,235,107
- ---------------------------------------------------------------------------- --------------
Change in net assets 79,235,107
- ----------------------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------------------
Beginning of period 0
- ---------------------------------------------------------------------------- --------------
End of period $ 79,235,107
- ---------------------------------------------------------------------------- --------------
</TABLE>
*For the period from May 30, 1995 (date of initial public investment) to July
31, 1995.
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Money Market Obligations 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 six diversified portfolios. The financial
statements included herein present only those of Government Obligations
Tax-Managed Fund (the "Fund"). The financial statements of the other portfolios
are presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held. The
Fund offers two classes of shares; Institutional Shares and Institutional
Service Shares.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
- --------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At July 31, 1995, capital paid-in aggregated $79,235,107.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
JULY 31, 1995*
--------------
<S> <C>
INSTITUTIONAL SHARES
- -----------------------------------------------------------------------------
Shares Sold 4,997,518
- -----------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 2
- -----------------------------------------------------------------------------
Shares redeemed (1,927,378)
- ----------------------------------------------------------------------------- -------------
Net change resulting from Institutional Shares transactions 3,070,142
- ----------------------------------------------------------------------------- -------------
</TABLE>
*For the period from June 2, 1995 (date of initial public investment) to July
31, 1995.
<TABLE>
<CAPTION>
PERIOD ENDED
JULY 31, 1995**
---------------
<S> <C>
INSTITUTIONAL SERVICE SHARES
- ----------------------------------------------------------------------------
Shares Sold 90,757,284
- ----------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 304,920
- ----------------------------------------------------------------------------
Shares redeemed (14,897,239)
- ---------------------------------------------------------------------------- --------------
Net change resulting from Institutional Service Shares transactions 76,164,965
- ---------------------------------------------------------------------------- --------------
Net change resulting from share transactions 79,235,107
- ---------------------------------------------------------------------------- --------------
</TABLE>
**For the period from May 30, 1995 (date of initial public investment) to July
31, 1995.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Administrative Services ("FAS"), the Fund's
investment adviser, (the "Adviser"), receives for its services an annual
investment advisory fee equal to .20 of 1% of the Fund's average daily net
assets. The Adviser may voluntarily choose to waive a portion of its fee and
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver and reimbursement at any time at its sole
discretion.
ADMINISTRATIVE FEE--FAS, under the Administrative Services Agreement, provides
the Fund with administrative personnel and services. The FAS fee is based on the
level of average aggregate daily net assets of all funds advised by subsidiaries
of Federated Investors for the period. The administrative fee received during
the period of the Administrative Services Agreement shall be at least $125,000
per portfolio and $30,000 per each additional class of shares.
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain shareholder accounts. FSS may
voluntarily choose to waive a portion of this fee. FSS can modify or terminate
this voluntary waiver at any time at its sole discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. The fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $26,061 were initially borne
by the Adviser. The Fund has agreed to reimburse the Adviser for the
organizational expenses during the five year period following May 7, 1995 (the
date the Fund first became effective). For the period ended July 31, 1995, the
Fund paid $290 pursuant to this agreement.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
MONEY MARKET OBLIGATIONS TRUST
(Government Obligations Tax-Managed Fund):
We have audited the accompanying statement of assets and liabilities of
Government Obligations Tax-Managed Fund (an investment portfolio of Money Market
Obligations Trust, a Massachusetts business trust), including the schedule of
portfolio investments, as of July 31, 1995, the related statement of operations,
the statement of changes in net assets, and the financial highlights for the
period from May 30, 1995 (date of initial public investment) to July 31, 1995.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of July 31, 1995, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Government Obligations Tax-Managed Fund (an investment portfolio of Money Market
Obligations Trust) as of July 31, 1995, the results of its operations, the
changes in its net assets, and the financial highlights for the period from May
30, 1995 (date of initial public investment) to July 31, 1995, in conformity
with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
September 8, 1995
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Government Obligations Tax-Managed Fund
Institutional Service Shares Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Investment Adviser
Federated Administrative Services Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8600
Trust Company Boston, Massachusetts 02266-8600
- ------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, Massachusetts 02266-8600
- ------------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS
TAX-MANAGED FUND
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
A Diversified Portfolio of Money Market
Obligations Trust, an Open-End Management
Investment Company
Prospectus dated September 30, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 60934N849
G01140-02 (9/95)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST)
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
Combined Statement of Additional Information
This Combined Statement of Additional Information should be read
with the prospectuses of Government Obligations Tax-Managed Fund
(the "Fund"), a portfolio of Money Market Obligations Trust (the
"Trust") dated September 30, 1995. This Statement is not a
prospectus. To receive a copy of a prospectus, write or call the
Fund.
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Statement dated September 30, 1995
Federated Securities Corp.
Distributor
A subsidiary of Federated
Investors
INVESTMENT POLICIES 1
Acceptable Investments 1
When-Issued and Delayed
Delivery Transactions 1
Reverse Repurchase Agreements 1
INVESTMENT LIMITATIONS 1
BROKERAGE TRANSACTIONS 3
Money Market Obligations Trust
Mangement 3
Share Ownership 7
Trustees Compensation 8
Trustee Liability 8
INVESTMENT ADVISORY SERVICES 9
Investment Adviser 9
Advisory Fees 9
Fund Administration 9
SHAREHOLDER SERVICES AGREEMENT 9
DETERMINING NET ASSET VALUE 10
REDEMPTION IN KIND 10
THE FUND'S TAX STATUS 10
PERFORMANCE INFORMATION 11
Yield 11
Effective Yield 11
Total Return 11
Performance Comparisons 11
ABOUT FEDERATED INVESTORS 12
Mutual Fund Market 12
Institutional 12
Trust Organizations 12
Broker/Dealers and
Bank Broker/Dealer
Subsidiaries 12
INVESTMENT POLICIES
Unless indicated otherwise, the policies described below may be changed
by the Board of Trustees without shareholder approval. Shareholders will
be notified before any material change in these policies becomes
effective.
ACCEPTABLE INVESTMENTS
Some of the short-term U.S. government securities the Fund may purchase
carry variable interest rates. These securities have a rate of interest
subject to adjustment at least annually. This adjusted interest rate is
ordinarily tied to some objective standard, such as the 91-day U.S.
Treasury bill rate. Variable interest rates will reduce the changes in
the market value of such securities from their original purchase
prices. Accordingly, the potential for capital appreciation or capital
depreciation should not be greater than that of fixed interest rate U.S.
government securities having maturities equal to the interest rate
adjustment dates of the variable rate U.S. government securities. The
Fund may purchase variable rate U.S. government securities upon the
determination by the Trustees that the interest rate as adjusted will
cause the instrument to have a current market value that approximates
its par value on the adjustment date.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. No fees or other expenses,
other than normal transaction costs, are incurred. However, liquid
assets of the Fund sufficient to make payment for the securities to be
purchased are segregated on the Fund's records at the trade date. These
assets are marked to market daily and are maintained until the
transaction has been settled. The Fund does not intend to engage in when-
issued and delayed delivery transactions to an extent that would cause
the segregation of more than 20% of the total value of its assets.
REVERSE REPURCHASE AGREEMENTS
The Fund may also enter into reverse repurchase agreements. These
transactions are similar to borrowing cash. In a reverse repurchase
agreement, the Fund transfers possession of a portfolio instrument in
return for a percentage of the instrument's market value in cash and
agrees that on a stipulated date in the future the Fund will repurchase
the portfolio instrument by remitting the original consideration plus
interest at an agreed upon rate. The use of reverse repurchase
agreements may enable the Fund to avoid selling portfolio instruments
at a time when a sale may be deemed to be disadvantageous, but does not
ensure this result. When effecting reverse repurchase agreements, liquid
assets of the Fund, in a dollar amount sufficient to make payment for
the obligations to be purchased, are: segregated on the Fund's records
at the trade date; marked to market daily; and maintained until the
transaction is settled.
INVESTMENT LIMITATIONS
Selling Short and Buying on Margin
The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as are
necessary for clearance of transactions.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities except that the Fund may
borrow money directly or through reverse repurchase agreements in
amounts up to one-third of the value of its total assets,
including the amounts borrowed.
The Fund will not borrow money or engage in reverse repurchase
agreements for investment leverage, but rather as a temporary,
extraordinary, or emergency measure or to facilitate management of
the portfolio by enabling the Fund to meet redemption requests
when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any
securities while borrowings in excess of 5% of the value of its
total assets are outstanding. During the period any reverse
repurchase agreements are outstanding, the Fund will restrict the
purchase of portfolio securities to money market instruments
maturing on or before the expiration date of the reverse
repurchase agreements, but only to the extent necessary to assure
completion of the reverse repurchase agreements.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets
except as necessary to secure permitted borrowings.
Lending Cash or Securities
The Fund will not lend any of its assets, except that it may
purchase or hold portfolio securities permitted by its investment
objective, policies, and limitations, or Declaration of Trust.
Investing in Commodities
The Fund will not purchase or sell commodities, commodity
contracts, or commodity futures contracts.
Investing in Real Estate
The Fund will not purchase or sell real estate, including limited
partnership interests, although it may invest in securities of
issuers whose business involves the purchase or sale of real
estate or in securities which are secured by real estate or
interests in real estate.
Underwriting
The Fund will not underwrite any issue of securities, except as it
may be deemed to be an underwriter under the Securities Act of
1933 in connection with the sale of securities in accordance with
its investment objective, policies, and limitations.
Concentration of Investments
The Fund will not invest 25% or more of the value of its total
assets in any one industry. The U.S. government is not considered
to be an industry.
Diversification of Investments
With respect to securities comprising 75% of the value of its
total assets, the Fund will not purchase securities of any one
issuer (other than cash, cash items, or securities issued or
guaranteed by the government of the United States or its agencies
or instrumentalities and repurchase agreements collateralized by
such U.S. government securities) if as a result more than 5% of
the value of its total assets would be invested in the securities
of that issuer, or if it would own more than 10% of the
outstanding voting securities of that issuer.
The above limitations cannot be changed without shareholder approval.
The following investment limitations, however, may be changed by the
Trustees without shareholder approval. Shareholders will be notified
before any material change in these limitations becomes effective.
Investing in Restricted Securities
The Fund will not invest in securities subject to restrictions on
resale under federal securities law.
Investing in Illiquid Securities
The Fund will not invest more than 10% of the value of its net
assets in illiquid securities.
Investing in Securities of Other Investment Companies
The Fund will not purchase securities of other investment
companies, except as part of a merger, consolidation, or other
acquisition.
Investing in New Issuers
The Fund will not invest more than 5% of the value of its total
assets in securities of issuers which have records of less than
three years of continuous operations, including the operation of
any predecessor.
Investing for Control
The Fund will not invest in securities of a company for the
purpose of exercising control or management.
Investing in Issuers Whose Securities are Owned by Officers of the
Fund
The Fund will not purchase or retain the securities of any issuer
if the officers and Trustees of the Trust or its investment
adviser, owning individually more than .50 of 1% of the issuer's
securities, together own more than 5% of the issuer's securities.
Investing in Options
The Fund will not invest in puts, calls, straddles, spreads, or
any combination of them.
Investing in Minerals
The Fund will not purchase or sell interests in oil, gas, or other
mineral exploration or development programs or leases, although it
may purchase the securities of issuers which invest in or sponsor
such programs.
For purposes of the above limitations, the Fund considers certificates
of deposit and demand and time deposits issued by a U.S. branch of a
domestic bank or savings and loan having capital, surplus, and undivided
profits in excess of $100,000,000 at the time of investment to be "cash
items". Except with respect to borrowing money, if a percentage
limitation is adhered to at the time of investment, a later increase or
decrease in percentage resulting from any change in value or net assets
will not result in a violation of such limitation.
The Fund did not borrow money or pledge securities in excess of 5% of
the value of its net assets during the last fiscal year and has no
present intent to do so during the coming fiscal year.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the
order at a favorable price. In working with dealers, the adviser will
generally use those who are recognized dealers in specific portfolio
instruments, except when a better price and execution of the order can
be obtained elsewhere. The adviser makes decisions on portfolio
transactions and selects brokers and dealers subject to guidelines
established by the Board of Trustees. The adviser may select brokers and
dealers who offer brokerage and research services. These services may be
furnished directly to the Fund or to the adviser and may include:
advice as to the advisability of investing in securities; security
analysis and reports; economic studies; industry studies; receipt of
quotations for portfolio evaluations; and similar services. Research
services provided by brokers and dealers may be used by the adviser or
its affiliates in advising the Fund and other accounts. To the extent
that receipt of these services may supplant services for which the
adviser or its affiliates might otherwise have paid, it would tend to
reduce their expenses. The adviser and its affiliates exercise
reasonable business judgment in selecting brokers who offer brokerage
and research services to execute securities transactions. They determine
in good faith that commissions charged by such persons are reasonable in
relationship to the value of the brokerage and research services
provided. During the period from May 30, 1995 (date of initial public
investment) to July 31, 1995, the Fund paid no brokerage commissions.
Although investment decisions for the Fund are made independently from
those of the other accounts managed by the adviser, investments of the
type the Fund may make may also be made by those other accounts. When
the Fund and one or more other accounts managed by the adviser are
prepared to invest in, or desire to dispose of, the same security,
available investments or opportunities for sales will be allocated in a
manner believed by the adviser to be equitable to each. In some cases,
this procedure may adversely affect the price paid or received by the
Fund or the size of the position obtained or disposed of by the Fund. In
other cases, however, it is believed that coordination and the ability
to participate in volume transactions will be to the benefit of the
Fund.
MONEY MARKET OBLIGATIONS TRUST MANAGEMENT
Officers and Trustees are listed with their addresses, birthdates,
present positions with Money Market Obligations Trust, and principal
occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Rese
Research Corp. and Federated Global Research Corp.; Chairman, Passport
Research, Ltd.; Chief Executive Officer and Director, Trustee, or
Managing General Partner of the Funds. Mr. Donahue is the father of J.
Christopher Donahue, President and Trustee of the Trust.
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's
Hospital of Pittsburgh; Director, Trustee, or Managing General Partner
of the Funds; formerly, Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President,
John R. Wood and Associates, Inc., Realtors; President, Northgate
Village Development Corporation; Partner or Trustee in private real
estate ventures in Southwest Florida; Director, Trustee, or Managing
General Partner of the Funds; formerly, President, Naples Property
Management, Inc.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and
Director, Ryan Homes, Inc.
J. Christopher Donahue *
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
President and Trustee
President and Trustee, Federated Investors, Federated Advisers,
Federated Management, and Federated Research; President and Director,
Federated Research Corp. and Federated Global Research Corp.; President,
Passport Research, Ltd.; Trustee, Federated Administrative Services,
Federated Services Company, and Federated Shareholder Services;
President or Vice President of the Funds; Director, Trustee, or Managing
General Partner of some of the Funds. Mr. Donahue is the son of John F.
Donahue, Chairman and Trustee of the Trust.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine and Member, Board of Trustees, University of
Pittsburgh; Medical Director, University of Pittsburgh Medical Center -
Downtown; Member, Board of Directors, University of Pittsburgh Medical
Center; formerly, Hematologist, Oncologist, and Internist, Presbyterian
and Montefiore Hospitals; Director, Trustee, or Managing General Partner
of the Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty;
Director, Eat'N Park Restaurants, Inc., and Statewide Settlement Agency,
Inc.; Director, Trustee, or Managing General Partner of the Funds;
formerly, Counsel, Horizon Financial, F.A., Western Region.
Peter E. Madden
70 Westcliff Road
Westin, MA
Birthdate: March 16, 1942
Trustee
Consultant; State Representative, Commonwealth of Massachusetts;
Director, Trustee, or Managing General Partner of the Funds; formerly,
President, State Street Bank and Trust Company and State Street Boston
Corporation.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney-at-law; Partner, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner,
Mollica, Murray and Hogue; Director, Trustee or Managing General Partner
of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics and Management Consultant; Trustee,
Carnegie Endowment for International Peace, RAND Corporation, Online
Computer Library Center, Inc., and U.S. Space Foundation; Chairman,
Czecho Management Center; Director, Trustee, or Managing General Partner
of the Funds; President Emeritus, University of Pittsburgh; founding
Chairman, National Advisory Council for Environmental Policy and
Technology and Federal Emergency Management Advisory Board.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/marketing consultant; Conference Coordinator, Non-
profit entities; Director, Trustee, or Managing General Partner of the
Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of
some of the Funds; Director or Trustee of some of the Funds.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice
President, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., Federated Global Research Corp., and Passport
Research, Ltd.; Executive Vice President and Director, Federated
Securities Corp.; Trustee, Federated Services Company; Chairman,
Treasurer, and Trustee, Federated Administrative Services; Trustee or
Director of some of the Funds; Executive Vice President and Treasurer of
the Funds.
David M. Taylor
Federated Investors Tower
Pittsburgh, PA
Birthdate: January 13, 1947
Treasurer
Senior Vice President, Controller, and Trustee, Federated Investors;
Controller, Federated Advisers, Federated Management, Federated
Research, Federated Research Corp., and Passport Research, Ltd.; Vice
President, Federated Shareholder Services; Senior Vice President,
Federated Administrative Services; Treasurer of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Vice President, Secretary, General Counsel, and Trustee, Federated
Investors; Trustee, Federated Advisers, Federated Management, and
Federated Research; Director, Federated Research Corp. and Federated
Global Research Corp.; Trustee, Federated Services Company; Executive
Vice President, Secretary, and Trustee, Federated Administrative
Services; President and Trustee, Federated Shareholder Services;
Director, Federated Securities Corp.; Executive Vice President and
Secretary of the Funds.
* This Trustee is deemed to be an "interested person" as defined
in the Investment Company Act of 1940, as amended.
@ Member of the Executive Committee. The Executive Committee of
the Board of Trustees handles the responsibilities of the Board
of Trustees between meetings of the Board.
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; Automated Government Money Trust; Blanchard Funds;
Blanchard Precious Metals, Inc.; Cash Trust Series II; Cash Trust
Series, Inc.; DG Investor Series; Edward D. Jones & Co. Daily Passport
Cash Trust; Federated ARMs Fund; Federated Equity Funds; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated High Yield Trust; Federated Income Securities Trust; Federated
Income Trust; Federated Index Trust; Federated Institutional Trust;
Federated Master Trust; Federated Municipal Trust; Federated Short-Term
Municipal Trust; Federated Short-Term U.S. Government Trust; Federated
Stock Trust; Federated Tax-Free Trust; Federated Total Return Series,
Inc.; Federated U.S. Government Bond Fund; Federated U.S. Government
Securities Fund: 1-3 Years; Federated U.S, Government Securities Fund: 3-
5 Years; First Priority Funds; Fixed Income Securities, Inc.; Fortress
Adjustable Rate U.S. Government Fund, Inc.; Fortress Municipal Income
Fund, Inc.; Fortress Utility Fund, Inc.; Fund for U.S. Government
Securities, Inc.; Government Income Securities, Inc.; High Yield Cash
Trust;; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond
Fund, Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S.
Government Money Market Trust; Liberty Term Trust, Inc. - 1999; Liberty
Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust; Money
Market Management, Inc.; Money Market Obligations Trust; Money Market
Trust; Municipal Securities Income Trust; Newpoint Funds; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Star Funds; The Starburst Funds; The Starburst Funds II;
Stock and Bond Fund, Inc.; Sunburst Funds; Targeted Duration Trust; Tax-
Free Instruments Trust; Trust for Financial Institutions; Trust For
Government Cash Reserves; Trust for Short-Term U.S. Government
Securities; Trust for U.S. Treasury Obligations; The Virtus Funds; World
Investment Series, Inc.
SHARE OWNERSHIP
Officers and Trustees as a group own less than 1% of the Fund's
outstanding shares.
As of September 6, 1995, the following shareholders of record owned 5%
or more of the outstanding Institutional Shares of Fund: Citizens Trust
Co., Providence, RI, owned approximately 38,117,429 shares (84.29%); and
Santa Monica Bank, Santa Monica, CA, owned approximately 4,426,000
shares (9.79%).
As of September 6, 1995 the following shareholder of record owned 5% or
more of the outstanding Institutional Service Shares of the Fund:
Anderson & Co., Philadelphia, PA, owned approximately 76,759,107 shares
(100%).
Trustees COMPENSATION
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST*# FROM FUND COMPLEX +
John F. Donahue $0 $0 for the Trust and
Chairman and Trustee 68 other investment companies in the
Fund Complex
Thomas G. Bigley $3,078 $20,688 for the Trust and
Trustee 49 other investment companies in the
Fund Complex
John T. Conroy, Jr. $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
William J. Copeland $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
J. Christopher Donahue $0 $0 for the Trust and
President and Trustee 14 other investment companies in the
Fund Complex
James E. Dowd $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Lawrence D. Ellis, M.D. $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Edward L. Flaherty, Jr. $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Peter E. Madden $2,978 $90,563 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Gregor F. Meyer $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
John E. Murray, Jr., $863 $0 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Wesley W. Posvar $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Marjorie P. Smuts $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
*Information is furnished for the fiscal year ended July 31, 1995.
#The aggregate compensation is provided for the Trust which is comprised
of six portfolios.
+The information is provided for the last calendar year.
TRUSTEE LIABILITY
The Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of their
office.
INVESTMENT ADVISORY SERVICES
INVESTMENT ADVISER
The Fund's investment adviser is Federated Administrative Services. It
is a subsidiary of Federated Investors. All the voting securities of
Federated Investors are owned by a trust, the trustees of which are John
F. Donahue, his wife and his son, J. Christopher Donahue.
The adviser shall not be liable to the Trust, the Fund, or any
shareholder of the Fund for any losses that may be sustained in the
purchase, holding, or sale of any security or for anything done or
omitted by it, except acts or omissions involving willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties imposed
upon it by its contract with the Trust.
ADVISORY FEES
For its advisory services, Federated Administrative Services receives an
annual investment advisory fee as described in the prospectus. For the
period from May 30, 1995 (date of initial public investment) to July 31,
1995, the adviser earned $24,484, all of which was waived.
State Expense Limitations
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose
shares are registered for sale in those states. If the Fund's
normal operating expenses (including the investment advisory fee,
but not including brokerage commissions, interest, taxes, and
extraordinary expenses) exceed 2-1/2% per year of the first $30
million of average net assets, 2% per year of the next $70 million
of average net assets, and 1-1/2% per year of the remaining
average net assets, the adviser will reimburse the Fund for its
expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by
the amount of the excess, subject to an annual adjustment. If the
expense limitation is exceeded, the amount to be reimbursed by the
adviser will be limited, in any single fiscal year, by the amount
of the investment advisory fees.
This arrangement is not part of the advisory contract and may be amended
or rescinded in the future.
FUND ADMINISTRATION
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Fund for a fee as
described in the prospectus. For the period from May 30, 1995 (date of
initial public investment) to July 31, 1995, Federated Administrative
Services earned $26,329.
SHAREHOLDER SERVICES AGREEMENT
With respect to both the Institutional Shares and Institutional Service
Shares of the Fund, the Trust has adopted a Shareholder Services
Agreement. This arrangement permits the payment of fees to Federated
Shareholder Services and financial institutions to cause services to be
provided which are necessary for the maintenance of shareholder accounts
and to encourage personal services to shareholders by a representative
who has knowledge of the shareholder's particular circumstances and
goals. These activities and services may include, but are not limited
to: providing office space, equipment, telephone facilities, and various
clerical, supervisory, computer, and other personnel as necessary or
beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic
investments of client account cash balances; answering routine client
inquiries; and assisting clients in changing dividend options, account
designations, and addresses. By adopting the Shareholder Services
Agreement, the Board of Trustees expects that the Fund will benefit by:
(1) providing personal services to shareholders; (2) investing
shareholder assets with a minimum of delay and administrative detail;
(3) enhancing shareholder recordkeeping systems; and (4) responding
promptly to shareholders' requests and inquiries concerning their
accounts.
For the period from May 30, 1995 (date of initial public investment) to
July 31, 1995, the Fund's Institutional Service Shares paid shareholder
services fees in the amount of $29,653, all of which were paid to
financial institutions.
For the period from June 2, 1995 (date of initial public investment) to
July 31, 1995, the Fund's Institutional Shares paid shareholder services
fees in the amount of $952, all of which were waived.
Custodian and Portfolio Recordkeeper. State Street Bank and Trust
Company, Boston, MA, is custodian for the securities and cash of the
Fund. Federated Services Company, Pittsburgh, PA, provides certain
accounting and recordkeeping services with respect to the Fund's
portfolio investments.
Transfer Agent. As transfer agent, Federated Services Company maintains
all necessary shareholder records. For its services, the transfer agent
receives a fee based on the size, type and number of accounts and
transactions made by shareholders.
DETERMINING NET ASSET VALUE
The Trustees have decided that the best method for determining the value
of portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for
amortization of premium or accumulation of discount rather than at
current market value. Accordingly, neither the amount of daily income
nor the net asset value is affected by any unrealized appreciation or
depreciation of the portfolio. In periods of declining interest rates,
the indicated daily yield on shares of the Fund computed by dividing the
annualized daily income on the Fund's portfolio by the net asset value
computed as above may tend to be higher than a similar computation made
by using a method of valuation based upon market prices and estimates.
In periods of rising interest rates, the opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio
instruments depends on its compliance with certain conditions in Rule 2a-
7 (the "Rule") promulgated by the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended. Under the Rule,
the Trustees must establish procedures reasonably designed to stabilize
the net asset value per share, as computed for purposes of distribution
and redemption, at $1.00 per share, taking into account current market
conditions and the Fund's investment objective. The procedures include
monitoring the relationship between the amortized cost value per share
and the net asset value per share based upon available indications of
market value. The Trustees will decide what, if any, steps should be
taken if there is a difference of more than 0.5 of 1% between the two
values. The Trustees will take any steps they consider appropriate (such
as redemption in kind or shortening the average portfolio maturity) to
minimize any material dilution or other unfair results arising from
differences between the two methods of determining net asset value.
REDEMPTION IN KIND
The Fund is obligated to redeem shares solely in cash up to $250,000 or
1% of the Fund's net asset value, whichever is less, for any one
shareholder within a 90-day period. Any redemption beyond this amount
will also be in cash unless the Trustees determine that further payments
should be in kind. In such cases, the Fund will pay all or a portion of
the remainder of the redemption in portfolio instruments valued in the
same way as the Fund determines net asset value. The portfolio
instruments will be selected in a manner that the Trustees deem fair and
equitable. Redemption in kind is not as liquid as a cash redemption. If
redemption is made in kind, shareholders who sell these securities could
receive less than the redemption value and could incur certain
transaction costs.
THE FUND'S TAX STATUS
To qualify for the special tax treatment afforded to regulated
investment companies, the Fund must, among other requirements: derive
at least 90% of its gross income from dividends, interest, and gains
from the sale of securities; derive less than 30% of its gross income
from the sale of securities held less than three months; invest in
securities within certain statutory limits; and distribute to its
shareholders at least 90% of its net income earned during the year.
The foregoing general discussion of U.S. federal income tax consequences
is based on the Internal Revenue Code, as amended, and the regulations
issued thereunder as in effect on the date of this Combined Statement of
Additional Information. Future legislative or administrative changes or
court decisions may significantly change the conclusions expressed
herein, and any such changes or decisions may have retroactive effect
with respect to the transactions contemplated herein.
Rules of state and local taxation of ordinary income dividends and
capital gain dividends from regulated investment companies often differ
from the rules for U.S. federal income taxation described above. It is
anticipated that the ordinary income dividends paid by the Fund from net
investment income will be exempt from state and local personal and, in
some cases, corporate income taxes in many states. Shareholders are
urged to consult their tax advisers as to the consequences of these and
other state and local tax rules affecting their investment in the Fund.
PERFORMANCE INFORMATION
Performance depends upon such variables as: portfolio quality; average
portfolio maturity; type of instruments in which the portfolio is
invested; changes in interest rates; changes in expenses; and the
relative amount of cash flow. To the extent that financial institutions
and broker/dealers charge fees in connection with services provided in
conjunction with an investment in shares of the Fund, the performance
will be reduced for those shareholders paying those fees.
YIELD
The yield is calculated based upon the seven days ending on the day of
the calculation, called the "base period." This yield is computed by:
determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net
change excluding capital changes but including the value of any
additional shares purchased with dividends earned from the original one
share and all dividends declared on the original and any purchased
shares; dividing the net change in the account's value by the value of
the account at the beginning of the base period to determine the base
period return; and multiplying the base period return by 365/7.
For the seven-day period ended July 31, 1995, the yields for
Institutional Shares and Institutional Service Shares were 5.59% and
5.34%, respectively.
EFFECTIVE YIELD
The effective yield is calculated by compounding the unannualized base
period return by: adding 1 to the base period return; raising the sum to
the 365/7th power; and subtracting 1 from the result.
For the seven-day period ended July 31, 1995, the effective yields for
Institutional Shares and Institutional Service Shares were 5.74% and
5.48%, respectively.
TOTAL RETURN
Average annual total return is the average compounded rate of return for
a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value
is computed by multiplying the number of shares owned at the end of the
period by the net asset value per share at the end of the period. The
number of shares owned at the end of the period is based on the number
of shares purchased at the beginning of the period with $1,000, adjusted
over the period by any additional shares, assuming the monthly
reinvestment of all dividends and distributions.
Cumulative total return reflects the Fund's total performance over a
specific period of time. The cumulative total return for the Fund's
Institutional Service Shares and Institutional Shares for the period
from May 30, 1995 (date of initial public investment) through July 31,
1995, was .95% and .94%, respectively. This total return is
representative of only two months of activity since the date of initial
public investment.
PERFORMANCE COMPARISONS
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance,
investors should consider all relevant factors such as the composition
of any index used, prevailing market conditions, portfolio compositions
of other funds, and methods used to value portfolio securities and
compute offering price. The financial publications and/or indices which
the Fund uses in advertising may include:
OLIPPER ANALYTICAL SERVICES, INC., ranks funds in various fund
categories based on total return, which assumes the reinvestment of all
income dividends and capital gains distributions, if any.
oDONOGHUE'S MONEY FUND REPORT publishes annualized yields of money
market funds weekly. Donoghue's MONEY MARKET INSIGHT publication reports
monthly and 12-month-to-date investment results for the same money
funds.
oMONEY, a monthly magazine, regularly ranks money market funds in
various categories based on the latest available seven-day effective
yield.
oSALOMON 30-DAY CD INDEX compares rate levels of 30-day certificates of
deposit from the top ten prime representative banks.
oSALOMON 30-DAY TREASURY BILL INDEX is a weekly quote of the most
representative yields for selected securities, issued by the U.S.
Treasury, maturing in 30 days.
oDISCOUNT CORPORATION OF NEW YORK 30-DAY FEDERAL AGENCIES is a weekly
quote of the average daily offering price for selected federal agency
issues maturing in 30 days.
ABOUT FEDERATED INVESTORS
Federated is dedicated to meeting investor needs which is reflected in
its investment decision making structured, straightforward, and
consistent. This has resulted in a history of competitive performance
with a range of competitive investment products that have gained the
confidence of thousands of clients and their customers.
The company's disciplined security selection process is firmly rooted in
sound methodologies backed by fundamental and technical research.
Investment decisions are made and executed by teams of portfolio
managers, analysts, and traders dedicated to specific market sectors.
In the money market sector, Federated gained prominence in the mutual
fund industry in 1974 with the creation of the first institutional money
market fund. Simultaneously, the company pioneered the use of the
amortized cost method of accounting for valuing shares of money market
funds, a principal means used by money managers today to value money
market fund shares. Other innovations include the first institutional
tax-free money market fund. As of December 31, 1994, Federated managed
more than $31 billion in assets across approximately 43 money market
funds, including 17 government, 8 prime and 18 municipal with assets
approximating $17 billion, $7.4 billion and $6.6 billion, respectively.
J. Thomas Madden, Executive Vice President, oversees Federated's equity
and high yield corporate bond management while William D. Dawson,
Executive Vice President, oversees Federated's domestic fixed income
management. Henry A. Frantzen, Executive Vice President, oversees the
management of Federated's international portfolios.
MUTUAL FUND MARKET
Twenty-seven percent of American households are pursuing their financial
goals through mutual funds. These investors, as well as businesses and
institutions, have entrusted over $2 trillion to the more than 5,500
funds available.*
Federated Investors, through its subsidiaries, distributes mutual funds
for a variety of investment applications. Specific markets include:
INSTITUTIONAL
Federated meets the needs of more than 4,000 institutional clients
nationwide by managing and servicing separate accounts and mutual funds
for a variety of applications, including defined benefit and defined
contribution programs, cash management, and asset/liability management.
Institutional clients include corporations, pension funds, tax-exempt
entities, foundations/endowments, insurance companies, and investment
and financial advisors. The marketing effort to these institutional
clients is headed by John B. Fisher, President, Institutional Sales
Division.
TRUST ORGANIZATIONS
Other institutional clients include close relationships with more than
1,500 banks and trust organizations. Virtually all of the trust
divisions of the top 100 bank holding companies use Federated funds in
their clients' portfolios. The marketing effort to trust clients is
headed by Mark R. Gensheimer, Executive Vice President, Bank Marketing &
Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated mutual funds are available to consumers through major
brokerage firms nationwide including 200 New York Stock Exchange
firms supported by more wholesalers than any other mutual fund
distributor. The marketing effort to these firms is headed by James F.
Getz, President, Broker/Dealer Division.
*Source: Investment Company Institute
60934N856
60934N849
G01140-03 (9/95)
Automated Cash Management Trust
(A Portfolio of Money Market Obligations Trust)
Prospectus
The shares of Automated Cash Management Trust (the "Fund") offered by
this prospectus represent interests in a diversified portfolio of Money
Market Obligations Trust (the "Trust"), an open-end management
investment company (a mutual fund). The Fund invests in short-term money
market securities to provide stability of principal and current income
consistent with stability of principal.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF
any bank, ARE NOT ENDORSED OR 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 THESE SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL. THE FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET
VALUE OF $1.00 PER SHARE; THERE CAN BE NO ASSURANCE THAT THE FUND WILL
BE ABLE TO DO SO.
This prospectus contains the information you should read and know before
you invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Statement of Additional Information dated
September 30, 1995, with the Securities and Exchange Commission. The
information contained in the Statement of Additional Information is
incorporated by reference into this prospectus. You may request a copy
of the Statement of Additional Information, which is in paper form only,
or a paper copy of this prospectus, if you have received your prospectus
electronically, free of charge by calling 1-800-235-4669. To obtain
other information, or make inquiries about the Fund, contact the Fund at
the address listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated September 30, 1995
Table of Contents will be
generated when document is
complete.
SUMMARY OF FUND EXPENSES
FINANCIAL HIGHLIGHTS
GENERAL INFORMATION
The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated October 3, 1988. The Declaration of Trust
permits the Trust to offer separate series of shares representing
interests in separate portfolios of securities. The Fund is designed as
a convenient means of accumulating an interest in a professionally
managed, diversified portfolio investing in short-term money market
securities. A minimum initial investment of $25,000 within a 90-day
period is required
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
INVESTMENT OBJECTIVE
The investment objective of the Fund is stability of principal and
current income consistent with stability of principal. This investment
objective cannot be changed without shareholder approval. While there is
no assurance that the Fund will achieve its investment objective, it
endeavors to do so by following the investment policies described in
this prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing in a portfolio of
money market instruments maturing in 13 months or less. The average
maturity of money market instruments in the Fund's portfolio, computed
on a dollar-weighted basis, will be 90 days or less. Unless indicated
otherwise, the investment policies set forth below may not be changed by
the Trustees without shareholder approval. Shareholders will be notified
before any material change in these policies becomes effective.
Acceptable Investments. The Fund invests in high quality money market
instruments that are either rated in the highest short-term rating
category by one or more nationally recognized statistical rating
organizations ("NRSROs") or are of comparable quality to securities
having such ratings. Examples of these instruments include, but are not
limited to:
o instruments of foreign banks and savings and loans (such as
certificates of deposit, demand and time deposits, savings
shares, and bankers' acceptances) if they have capital,
surplus, and undivided profits of over $100,000,000, or if
the principal amount of the instrument is insured by the bank
Insurance Fund ("BIF") which is administered by the Federal
Deposit Insurance Corporation ("FDIC") or the Savings
Association Insurance Fund ("SAIF") which is administered by
the FDIC. These instruments may include Eurodollar
Certificates of Deposit ("ECDs"), Yankee Certificates of
Deposit ("Yankee CDs"), and Eurodollar Time Deposits
("ETDs");
o commercial paper rated A-1 by Standard and Poor's Ratings
Group, Prime -1 by Moody's Investors Service, Inc., or F-1 by
Fitch Investors Service, and unrated but of comparable
quality, including Canadian Commercial Paper ("CCPs") and
Europaper;
o marketable obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities; and
o repurchase agreements.
The Fund invests only in instruments denominated and payable in U.S.
dollars.
Ratings. An NRSRO's highest rating category is determined without
regard for sub-categories and gradations. For example, securities rated
A-1 or A-1+ by Standard & Poor's Ratings Group ("S&P"), Prime-1 by
Moody's Investors Service, Inc. ("Moody's"), or F-1 (+ or -) by Fitch
Investors Service, Inc. ("Fitch") are all considered rated in the
highest short-term rating category. The Fund will follow applicable
regulations in determining whether a security rated by more than one
NRSRO can be treated as being in the highest short-term rating category;
currently, such securities must be rated by two NRSROs in their highest
rating category. See "Regulatory Compliance."
Repurchase Agreements. Certain securities in which the Fund invests may
be purchased pursuant to repurchase agreements. Repurchase agreements
are arrangements in which banks, broker/dealers, and other recognized
financial institutions sell U.S. government securities or certificates
of deposit to the Fund and agree at the time of sale to repurchase them
at a mutually agreed upon time and price within one year from the date
of acquisition. The Fund or its custodian will take possession of the
securities subject to repurchase agreements and these securities will be
marked to market daily. To the extent that the original seller does not
repurchase the securities from the Fund, the Fund could receive less
than the repurchase price on any sale of such securities. In the event
that such a defaulting seller filed for bankruptcy or became insolvent,
disposition of such securities by the Fund might be delayed pending
court action. The Fund believes that under the regular procedures
normally in effect for custody of the Fund's portfolio securities
subject to repurchase agreements, a court of competent jurisdiction
would rule in favor of the Fund and allow retention or disposition of
such securities. The Fund will only enter into repurchase agreements
with banks and other recognized financial institutions such as
broker/dealers which are found by the Fund's investment adviser to be
creditworthy pursuant to guidelines established by the Trustees.
When-Issued and Delayed Delivery Transactions. The Fund may purchase
short-term U.S. government securities on a when-issued or delayed
delivery basis. These transactions are arrangements in which the Fund
purchases securities with payment and delivery scheduled for a future
time. The Fund engages in when-issued and delayed delivery transactions
only for the purpose of acquiring portfolio securities consistent with
the Fund's investment objective and policies, not for investment
leverage. In when-issues and delayed delivery transactions, the Fund
relies on the seller to complete the transaction. The seller's failure
to complete these transactions may cause the Fund to miss a price or
yield considered to be advantageous. Settlement dates may be a month or
more after entering into these transactions, and the market values of
the securities purchased may vary from the purchase prices. Accordingly,
the Fund may pay more or less than the market value of the securities on
the settlement date.
The Fund may dispose of a commitment prior to settlement if the adviser
deems it appropriate to do so. In addition, the Fund may enter into
transactions to sell its purchase commitments to third parties at
current market values and simultaneously acquire other commitments to
purchase similar securities at later dates. The Fund may realize short-
term profits or losses upon the sale of such commitments.
Restricted and Illiquid Securities. The Fund may invest in restricted
securities. Restricted securities are any securities in which the Fund
may otherwise invest pursuant to its investment objective and policies
but which are subject to restrictions on resale under federal securities
law. However, the Fund will limit investments in illiquid securities,
including restricted securities and repurchase agreements providing for
settlement in more than seven days after notice, to 10% of its net
assets. Certain instruments in which the Fund may invest, such as ETD's
and repurchase agreements with maturities of more than seven days, could
be considered illiquid.
The Fund may invest in commercial paper issued in reliance on the
exemption from registration afforded by Section 4(2) of the Securities
Act of 1933. Section 4(2) commercial paper is restricted as to
disposition under federal securities law, and is generally sold to
institutional investors, such as the Fund, who agree that they are
purchasing the paper for investment purposes and not with a view to
public distribution. Any resale by the purchaser must be in an exempt
transaction. Section 4(2) commercial paper is normally resold to other
institutional investors like the Fund through or with the assistance of
the issuer or investment dealers who make a market in Section 4(2)
commercial paper, thus providing liquidity. The Fund believes that
Section 4(2) commercial paper and possibly certain other restricted
securities which meet the criteria for liquidity established by the
Trustees of the Fund are quite liquid. As a matter of operating policy,
the Fund intends, therefore, to treat the restricted securities which
meet the criteria for liquidity established by the Trustees, including
Section 4(2) commercial paper, as determined by the Fund's investment
adviser, as liquid and not subject to the investment limitation
applicable to illiquid securities. In addition, because Section 4(2)
commercial paper is liquid, the Fund intends to not subject such paper
to the limitation applicable to restricted securities.
Other Investment Techniques
Credit Enhancement. Certain of the Fund's acceptable investments may
be credit enhanced by a guaranty, letter of credit, or insurance. The
Fund typically evaluates the credit quality and ratings of credit-
enhanced securities based upon the financial condition and ratings of
the party providing the credit enhancement (the "credit enhancer"),
rather than the issuer. Generally, the Fund will not treat credit-
enhanced securities as having been issued by the credit enhancer for
diversification purposes. However, under certain circumstances
applicable regulations may require the Fund to treat the securities as
having been issued by both the issuer and the credit enhancer. The
bankruptcy, receivership, or default of the credit enhancer will
adversely affect the quality and marketability of the underlying
security.
Demand Features. The Fund may acquire securities that are subject to
puts and standby commitments ("demand features") to purchase the
securities at their principal amount (usually with accrued interest)
within a fixed period (usually seven days) following a demand by the
Fund. The demand feature may be issued by the issuer of the underlying
securities, a dealer in the securities, or by another third party, and
may not be transferred separately from the underlying security. The Fund
uses these arrangements to provide the Fund with liquidity and not to
protect against changes in the market value of the underlying
securities. The bankruptcy, receivership, or default by the issuer of
the demand feature, or a default on the underlying security or other
event that terminates the demand feature before its exercise, will
adversely affect the liquidity of the underlying security. Demand
features that are exercisable even after a payment default on the
underlying security may be treated as a form of credit enhancement.
INVESTMENT RISKS
ECDs, ETDs, Yankee CDs, Canadian Commercial Paper, and Europaper are
subject to different risks than domestic obligations of domestic banks
or corporations. Examples of these risks include international economic
and political developments, foreign governmental restrictions that may
adversely affect the payment of principal or interest, foreign
withholding or other taxes on interest income, difficulties in obtaining
or enforcing a judgment against the issuing entity, and the possible
impact of interruptions in the flow of international currency
transactions. Risks may also exist for ECDs, ETDs, and Yankee CDs
because the banks issuing these instruments, or their domestic or
foreign branches, are not necessarily subject to the same regulatory
requirements that apply to domestic banks, such as reserve requirements,
loan limitations, examinations, accounting, auditing, recordkeeping, and
the public availability of information. These factors will be carefully
considered by the Fund's adviser in selecting investments for the Fund.
INVESTMENT LIMITATIONS
The Fund will not borrow money directly or through reverse repurchase
agreements (arrangements in which the Fund sells a money market
instrument for a percentage of its cash value with an agreement to buy
it back on a set date) or pledge securities except, under certain
circumstances, the Fund may borrow up to one-third of the value of its
total assets and pledge up to 10% of the value of its total assets to
secure such borrowings. This investment limitation cannot be changed
without shareholder approval.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in
this prospectus and its Statement of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of
and regulations under the Investment Company Act of 1940, as amended. In
particular, the Fund will comply with the various requirements of Rule
2a-7 which regulates money market mutual funds. For example, with
limited exceptions, Rule 2a-7 prohibits the investment of more than 5%
of the Fund's total assets in the securities of any one issuer, although
the Fund's investment limitation only requires such 5% diversification
with respect to 75% of its assets. The Fund will invest more than 5% of
its assets in any one issuer only under the circumstances permitted by
Rule 2a-7. The Fund will also determine the effective maturity of its
investments, as well as its ability to consider a security as having
received the requisite short-term ratings by NRSROs, according to Rule
2a-7. The Fund may change these operational policies to reflect changes
in the laws and regulations without the approval of its shareholders.
Trust INFORMATION
MANAGEMENT OF THE Trust
Board of Trustees. The Trust is managed by a Board of Trustees. The
Trustees are responsible for managing the Fund's business affairs and
for exercising all the Trust's powers except those reserved for the
shareholders. An Executive Committee of the Board of Trustees handles
the Board's responsibilities between meetings of the Board.
Investment Adviser. Investment decisions for the Fund are made by
Federated Management, the Fund's investment adviser, subject to
direction by the Trustees. The adviser continually conducts investment
research and supervision for the Fund and is responsible for the
purchase and sale of portfolio instruments.
Advisory Fees. The adviser receives an annual investment
advisory fee equal to .50 of 1% of the Fund's average daily
net assets. The adviser has undertaken to reimburse the Fund
up to the amount of the advisory fee for operating expenses
in excess of limitations established by certain states. The
adviser also may voluntarily choose to waive a portion of its
fee or reimburse other expenses of the Fund, but reserves the
right to terminate such waiver or reimbursement at any time
at its sole discretion.
Adviser's Background. Federated Management, a Delaware
business trust, organized on April 11, 1989 is a registered
investment adviser under the Investment Advisers Act of 1940.
It is a subsidiary of Federated Investors. All of the Class A
(voting) shares of Federated Investors are owned by a trust,
the trustees of which are John F. Donahue, Chairman and
Trustee of Federated Investors, Mr. Donahue's wife, and Mr.
Donahue's son, J. Christopher Donahue, who is President and
Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated
Investors serve as investment advisers to a number of
investment companies and private accounts. Certain other
subsidiaries also provide administrative services to a number
of investment companies. With over $72 billion invested
across more than 260 funds under management and/or
administration by its subsidiaries, as of December 31, 1994,
Federated Investors is one of the largest mutual fund
investment managers in the United States. With more than
1,750 employees, Federated continues to be led by the
management who founded the company in 1955. Federated funds
are presently at work in and through 4,000 financial
institutions nationwide. More than 100,000 investment
professionals have selected Federated funds for their
clients.
Both the Trust and the adviser have adopted strict codes of ethics
governing the conduct of all employees who manage the Fund and its
portfolio securities. These codes recognize that such persons owe a
fiduciary duty to the Fund's shareholders and must place the interests
of shareholders ahead of the employees' own interest. Among other
things, the codes: require preclearance and periodic reporting of
personal securities transactions; prohibit personal transactions in
securities being purchased or sold, or being considered for purchase or
sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than
sixty days. Violations of the codes are subject to review by the Board
of Trustees, and could result in severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for shares of
the Fund. It is a Pennsylvania corporation organized on November 14,
1969, and is the principal distributor for a number of investment
companies. Federated Securities Corp. is a subsidiary of Federated
Investors.
Shareholder Services Agreement. The Fund has entered into a Shareholder
Services Agreement with Federated Shareholder Services, a subsidiary of
Federated Investors, under which the Fund may make payments up to .25 of
1% of the average daily net asset value of Fund shares, computed at an
annual rate, to obtain certain personal services for shareholders and
the maintenance of shareholder accounts ("shareholder services"). From
time to time and for such periods as deemed appropriate, the amount
stated above may be reduced voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services
will either perform shareholder services directly or will select
financial institutions to perform shareholder services. Financial
institutions will receive fees based upon shares owned by their clients
or customers. The schedules of such fees and the basis upon which such
fees will be paid will be determined from time to time by the Fund and
Federated Shareholder Services.
Supplemental Payments To Financial Institutions. The distributor may pay
financial institutions such as banks, fiduciaries, custodians for public
funds, investment advisers, and broker/dealers to provide certain
services to shareholders. These services may include, but are not
limited to, distributing prospectuses and other information, providing
accounting assistance, and communicating or facilitating purchases and
redemptions of shares. Any fees paid for these services by the
distributor will be reimbursed by the adviser or its affiliates and not
the Fund.
State securities laws may require certain financial institutions such as
depository institutions to register as dealers.
ADMINISTRATION OF THE FUND
Administrative Services. Federated Administrative Services, a subsidiary
of Federated Investors, provides administrative personnel and services
(including certain legal and financial reporting services) necessary to
operate the Fund. Federated Administrative Services provides these at an
annual rate as specified below:
Maximum Fee Average Aggregate Daily Net Assets
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750
million
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Average aggregate daily net assets include those of all mutual funds
advised by affiliates of Federated Investors. Federated Administrative
Services may choose voluntarily to waive a portion of its fee.
Custodian. State Street Bank and Trust Company, Boston, MA, is
custodian for the securities and cash of the Fund.
Transfer Agent and Dividend Disbursing Agent. Federated Services
Company, Boston, MA, is transfer agent for the shares of, and dividend
disbursing agent for, the Fund. Federated Services Company is a
subsidiary of Federated Investors.
Independent Public Accountants. The independent public accountants for
the Fund are Arthur Andersen LLP, Pittsburgh, PA.
NET ASSET VALUE
The Fund attempts to stabilize the net asset value of its shares at
$1.00 by valuing the portfolio securities using the amortized cost
method. The net asset value per share is determined by subtracting total
liabilities from total assets and dividing the remainder by the number
of shares outstanding. The Fund cannot guarantee that its net asset
value will always remain at $1.00 per share.
The net asset value is determined at 12 noon, 3:00 p.m. (Eastern time),
and as of the close of trading (normally 4:00 p.m., Eastern time) on the
New York Stock Exchange, Monday through Friday, except on New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, and Christmas Day.
INVESTING IN THE FUND
SHARE PURCHASES
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York
Stock Exchange and the Federal Reserve Wire System are open for
business. Shares may be purchased either by wire or mail. The Fund
reserves the right to reject any purchase request.
To make a purchase, open an account by calling Federated Securities
Corp. Information needed to establish the account will be taken by
telephone.
By Wire. To purchase by Federal Reserve wire, call the Fund before 3:00
p.m. (Eastern time) to place an order. The order is considered received
immediately. Payment by federal funds must be received before 3:00 p.m.
(Eastern time) that day. Federal funds should be wired as follows:
Federated Services Company, c/o State Street Bank and Trust Company,
Boston, MA; Attention: EDGEWIRE; For Credit to: Automated Cash
Management Trust; Fund Number (this number can be found on the account
statement or by contacting the Fund); Group Number or Order Number;
Nominee or Institution Name; and ABA Number 011000028.
By Mail. To purchase by mail, send a check made payable to Automated
Cash Management Trust to: Federated Services Company, Automated Cash
Management Trust, P.O. Box 8600, Boston, MA 02266-8600. Orders by mail
are considered received when payment by check is converted into federal
funds. This is normally the next business day after the check is
received.
Automatic Investments. Investors may establish accounts with
their financial institutions to have cash accumulations
automatically invested in the Fund. The investments may be made on
predetermined dates or when the investor's account reaches a
certain level. Participating financial institutions are
responsible for prompt transmission of orders relating to the
program, and they may charge for their services. Investors should
read this prospectus along with the financial institution's
agreement or literature describing these services and fees.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $25,000. However, an account may be
opened with a smaller amount as long as the minimum is reached within 90
days. Minimum investments will be calculated by combining all accounts
maintained with the Fund. Financial institutions may impose different
minimum investment requirements on their customers.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts.
However, certain financial institutions may wish to use the transfer
agent's subaccounting system to minimize their internal recordkeeping
requirements. The transfer agent charges a fee based on the level of
subaccounting services rendered. Financial institutions may charge or
pass through subaccounting fees as part of or in addition to normal
trust or agency account fees. They may also charge fees for other
services provided which may be related to the ownership of Fund shares.
This prospectus should, therefore, be read together with any agreement
between the customer and the financial institution with regard to the
services provided, the fees charged for those services, and any
restrictions and limitations imposed.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a
share account for each shareholder. Share certificates are not issued
unless requested by contacting the Fund or Federated Services Company in
writing.
Monthly confirmations are sent to report transactions such as all
purchases and redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are
automatically reinvested on payment dates in additional shares of the
Fund unless cash payments are requested by writing to the Fund. Shares
purchased by wire before 3:00 p.m. (Eastern time) begin earning
dividends that day. Shares purchased by check begin earning dividends
the day after the check is converted into federal funds.
CAPITAL GAINS
The Fund does not expect to realize any capital gains or losses. If
capital gains or losses were to occur, they could result in an increase
or decrease in dividends. The Fund will distribute in cash or additional
shares any realized net long-term capital gains at least once every 12
months.
Retirement Plans
Shares of the Fund can be purchased as an investment for retirement
plans or for IRA accounts. For further details contact Federated
Securities Corp. and consult a tax adviser.
REDEEMING SHARES
Shares are redeemed at their net asset value next determined after
Federated Services Company receives the redemption request. Redemptions
will be made on days on which the Fund computes its net asset value.
Redemption requests must be received in proper form and can be made as
described below.
BY MAIL
Shares may be redeemed by sending a written request to: Automated Cash
Management Trust, Federated Services Company, P.O. Box 8600, Boston, MA
02266-8600. The written request should state: Automated Cash Management
Trust; shareholder's name; the account number; and the share or dollar
amount requested. Sign the request exactly as the shares are registered.
Shareholders should call the Fund for assistance in redeeming by mail.
If share certificates have been issued, they must be properly endorsed
and should be sent by registered or overnight insured mail with the
written request to Federated Services Company, 500 Victory Road-2nd
floor, North Quincy, MA 02171.
Shareholders requesting a redemption of any amount to be sent to an
address other than that on record with the Fund, or a redemption payable
other than to the shareholder of record must have their signatures
guaranteed by:
o a trust company or commercial bank whose deposits are insured by
the Bank Insurance Fund which is administered by the Federal
Deposit Insurance Corporation ("FDIC");
o a member of the New York, American, Boston, Midwest, or Pacific
Stock Exchanges;
o a savings bank or savings and loan association whose deposits are
insured by the Savings Association Insurance Fund, which is
administered by the FDIC; or
o any other "eligible guarantor institution," as defined in the
Securities Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and the transfer agent have adopted standards for accepting
signature guarantees from the above institutions. The Fund may elect in
the future to limit eligible signature guarantors to institutions that
are members of the signature guarantee program. The Fund and its
transfer agent reserve the right to amend these standards at any time
without notice.
Normally, a check for the proceeds is mailed within one business day,
but in no event more than seven days, after receipt of a proper written
redemption request. Dividends are paid up to and including the day that
a redemption request is processed.
By Writing a Check. At the shareholder's request, State Street Bank and
Trust Company or Federated Services Company will establish a checking
account for redeeming shares. For further information, contact Federated
Services Company.
With this checking account, shares may be redeemed by writing a check
for $100 or more. The redemption will be made at the net asset value on
the date that the check is presented to the Fund. A check may not be
written to close an account. A shareholder may obtain cash by
negotiating the check through the shareholder's local bank. Checks
should never be made payable or sent to State Street Bank and Trust
Company or Federated Services Company to redeem shares. Cancelled checks
are sent to the shareholder each month.
TELEPHONE REDEMPTION
Shares may be redeemed in minimum amounts of $1,000 by telephoning the
Fund. Telephone instructions may be recorded and if reasonable
procedures are not followed by the Fund, it may be liable for losses due
to unauthorized or fraudulent telephone instructions. An authorization
form permitting the Fund to accept telephone requests must first be
completed. Authorization forms and information on this service are
available from Federated Securities Corp.
If the redemption request is received before 3:00 p.m. (Eastern time),
the proceeds will be wired the same day to the shareholder's account at
a domestic commercial bank which is a member of the Federal Reserve
System, and those shares redeemed will not be entitled to that day's
dividend. A daily dividend will be paid on shares redeemed if the
redemption request is received after 3:00 p.m. (Eastern time). However,
the proceeds are not wired until the following business day. Under
limited circumstances, arrangements may be made with the distributor for
same-day payment of proceeds, without that day's dividend, for
redemption requests received before 3:00 p.m. (Eastern time).
In the event of drastic economic or market changes, a shareholder may
experience difficulty in redeeming by telephone. If such a case should
occur, another method of redemption, such as "By Mail", should be
considered. If at any time the Fund shall determine it necessary to
terminate or modify this method of redemption, shareholders would be
promptly notified.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund
may redeem shares in any account, except accounts maintained by
retirement plans, and pay the proceeds to the shareholder if the account
balance falls below a required minimum value of $25,000 due to
shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is
notified in writing and allowed 30 days to purchase additional shares to
meet the minimum requirement.
SHAREHOLDER INFORMATION
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee
elections and other matters submitted to shareholders for vote. All
shares of each portfolio in the Trust have equal voting rights, except
that in matters affecting only a particular portfolio, only shares of
that portfolio are entitled to vote. As a Massachusetts business trust,
the Trust is not required to hold annual shareholder meetings.
Shareholder approval will be sought only for certain changes in the
Trust's or the Fund's operation and for the election of Trustees under
certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting of the shareholders for this purpose shall be
called by the Trustees upon the written request of shareholders owning
at least 10% of the outstanding shares of the Trust.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable
as partners under Massachusetts law for obligations of the Trust. To
protect its shareholders, the Trust has filed legal documents with
Massachusetts that expressly disclaim the liability of its shareholders
for acts or obligations of the Trust. These documents require notice of
this disclaimer to be given in each agreement, obligation, or instrument
the Trust or its Trustees enter into or sign.
In the unlikely event a shareholder is held personally liable for the
Trust's obligations, the Trust is required by the Declaration of Trust
to use its property to protect or compensate the shareholder. On
request, the Trust will defend any claim made and pay any judgment
against a shareholder for any act or obligation of the Trust. Therefore,
financial loss resulting from liability as a shareholder will occur only
if the Trust itself cannot meet its obligations to indemnify
shareholders and pay judgments against them.
TAX INFORMATION
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet
requirements of the Internal Revenue Code applicable to regulated
investment companies and to receive the special tax treatment afforded
to such companies. The Fund will be treated as a single, separate entity
for federal income tax purposes so that income (including capital gains)
and losses realized by the Trust's other portfolios will not be combined
for tax purposes with those realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income
tax on any dividends and other distributions received. This applies
whether dividends and distributions are received in cash or as
additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston, & Donnelly, counsel to the Trust:
o the Fund is not subject to Pennsylvania corporate or personal
property taxes; and
o Fund shares may be subject to personal property taxes imposed by
counties, municipalities, and school districts in Pennsylvania to
the extent that the portfolio securities in the Fund would be
subject to such taxes if owned directly by residents of those
jurisdictions.
Other State and Local Taxes. Shareholders are urged to consult their
own tax advisers regarding the status of their accounts under state and
local tax laws.
PERFORMANCE INFORMATION
From time to time, the Fund advertises its yield and effective yield.
Yield represents the annualized rate of income earned on an investment
over a seven-day period. It is the annualized dividends earned during
the period on an investment shown as a percentage of the investment. The
effective yield is calculated similarly to the yield, but when
annualized, the income earned by an investment is assumed to be
reinvested daily. The effective yield will be slightly higher than the
yield because of the compounding effect of this assumed reinvestment.
Advertisements and sales literature may also refer to total return.
Total return represents the change, over a specified period of time, in
the value of an investment in the Fund after reinvesting all income
distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.
From time to time, advertisements for the Fund may refer to ratings,
rankings, and other information in certain financial publications and/or
compare the Fund's performance to certain indices.
ADDRESSES
Money Market Obligations Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, PA 15222-3779
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, PA 15222-3779
Custodian
State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, MA 02266-8600
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, PA 15222
Automated Cash Management Trust
PROSPECTUS
A Diversified Portfolio of Money Market
Obligations Trust, an Open-End Management
Investment Company
Prospectus dated September 30, 1995
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of Federated
Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip 052903101
G00554-01 (9/95)
AUTOMATED CASH MANAGEMENT TRUST
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST)
Statement of Additional Information
This Statement of Additional Information should be read with the
prospectus of Automated Cash Management Trust (the "Fund"), a
portfolio of Money Market Obligations Trust (the "Trust") dated
September 30, 1995. This Statement is not a prospectus. To receive
a copy of a prospectus, write or call the Fund.
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Statement dated September 30, 1995
Federated Securities Corp.
Distributor
A subsidiary of Federated
Investors
FUND HISTORY 1
INVESTMENT POLICIES 1
Acceptable Investments 1
Bank Instruments 1
U.S. Government Obligations 1
When-Issued and Delayed
Delivery Transactions 1
Repurchase Agreements 1
Reverse Repurchase Agreements 2
INVESTMENT LIMITATIONS 2
Brokerage Transactions 4
Money Market Obligations Trust
Mangement 4
Share Ownership 8
Trustees Compensation 9
Trustee Liability 9
INVESTMENT ADVISORY SERVICES 9
Investment Adviser 9
Advisory Fees 10
FUND ADMINISTRATION 10
SHAREHOLDER SERVICES AGREEMENT 10
DETERMINING NET ASSET VALUE 11
REDEMPTION IN KIND 11
THE FUND'S TAX STATUS 11
PERFORMANCE INFORMATION 11
Yield 11
Effective Yield 12
Total Return 12
Performance Comparisons 12
ABOUT FEDERATED INVESTORS 12
Mutual Fund Market 13
Institutional 13
Trust Organizations 13
Broker/Dealers and
Bank Broker/Dealer
Subsidiaries 13
Fund History
Effective July 30, 1994, Automated Cash Management Trust was reorganized
into an investment portfolio of Money Market Obligations Trust. The
Trust is registered under the Investment Company Act of 1940, as amended
as an open-end, management investment company. The Trust consists of six
diversified portfolios.
INVESTMENT POLICIES
Unless indicated otherwise, the policies described below may not be
changed by the Board of Trustees without shareholder approval.
Shareholders will be notified before any material change in these
policies becomes effective.
ACCEPTABLE INVESTMENTS
When determining whether a security presents minimal credit risks, the
investment adviser will consider the creditworthiness of: the issuer of
the security, the issuer of any demand feature applicable to the
security, or any guarantor of either the security or any demand feature.
BANK INSTRUMENTS
The instruments of banks and savings and loans whose deposits are
insured by the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF"), such as certificates of deposit, demand and
time deposits, savings shares, and bankers' acceptances, are not
necessarily guaranteed by those organizations. In addition to domestic
bank instruments, the Fund may invest in: Eurodollar Certificates of
Deposit issued by foreign branches of U.S. or foreign banks; Eurodollar
Time Deposits, which are U.S. dollar-denominated deposits in foreign
branches of U.S. or foreign banks; Canadian Time Deposits, which are
U.S. dollar-denominated deposits issued by branches of major Canadian
banks located in the United States; and Yankee Certificates of Deposit,
which are U.S. dollar-denominated certificates of deposit issued by U.S.
branches of foreign banks and held in the United States.
U.S. Government Obligations
The Fund invests in U.S. government securities. These instruments are
either issued or guaranteed by the U.S. government, its agencies, or
instrumentalities. These securities include, but are not limited to:
o direct obligations of the U.S. Treasury, such as U.S. Treasury
bills, notes, and bonds; and
o notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as the: Farm Credit System, including the
National Bank for Cooperatives, Farm Credit Banks, and Banks for
Cooperatives; Farmers Home Administration; Federal Home Loan
Banks; Federal Home Loan Mortgage Corporation; Federal National
Mortgage Association; Government National Mortgage Association;
and Student Loan Marketing Association.
Some obligations issued or guaranteed by agencies or instrumentalities
of the U.S. government, such as Government National Mortgage Association
participation certificates, are backed by the full faith and credit of
the U.S. Treasury. No assurances can be given that the U.S. government
will provide financial support to other agencies or instrumentalities,
since it is not obligated to do so. These instrumentalities are
supported by:
o the issuer's right to borrow an amount limited to a specific line
of credit from the U.S. Treasury;
o discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or
o the credit of the agency or instrumentality.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. No fees or other expenses,
other than normal transaction costs, are incurred. However, liquid
assets of the Fund sufficient to make payment for the securities to be
purchased are segregated on the Fund's records at the trade date. These
assets are marked to market daily and are maintained until the
transaction has been settled.
REPURCHASE AGREEMENTS
The Fund or its custodian will take possession of the securities subject
to repurchase agreements, and these securities will be marked to market
daily. In the event that a defaulting seller filed for bankruptcy or
became insolvent, disposition of such securities by the Fund might be
delayed pending court action. The Fund believes that under the regular
procedures normally in effect for custody of the Fund's portfolio
securities subject to repurchase agreements, a court of competent
jurisdiction would rule in favor of the Fund and allow retention or
disposition of such securities. The Fund will only enter into repurchase
agreements with banks and other recognized financial institutions, such
as broker/dealers, which are deemed by the Fund's adviser to be
creditworthy pursuant to guidelines established by the Trustees.
REVERSE REPURCHASE AGREEMENTS
The Fund may also enter into reverse repurchase agreements. These
transactions are similar to borrowing cash. In a reverse repurchase
agreement, the Fund transfers possession of a portfolio instrument in
return for a percentage of the instrument's market value in cash and
agrees that on a stipulated date in the future the Fund will repurchase
the portfolio instrument by remitting the original consideration plus
interest at an agreed upon rate. The use of reverse repurchase
agreements may enable the Fund to avoid selling portfolio instruments
at a time when a sale may be deemed to be disadvantageous, but does not
ensure this result. When effecting reverse repurchase agreements, liquid
assets of the Fund, in a dollar amount sufficient to make payment for
the obligations to be purchased, are: segregated on the Fund's records
at the trade date; marked to market daily; and maintained until the
transaction is settled.
INVESTMENT LIMITATIONS
Selling Short and Buying on Margin
The Fund will not sell any money market instruments short or
purchase any money market instruments on margin but may obtain
such short-term credits as may be necessary for clearance of
purchases and sales of money market instruments.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities except that the Fund may
borrow money directly or through reverse repurchase agreements in
amounts up to one-third of the value of its total assets,
including the amounts borrowed.
The Fund will not borrow money or engage in reverse repurchase
agreements for investment leverage, but rather as a temporary,
extraordinary, or emergency measure or to facilitate management of
the portfolio by enabling the Fund to meet redemption requests
when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any
securities while borrowings in excess of 5% of the value of its
total assets are outstanding.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets
except to secure permitted borrowings. In those cases, it may
mortgage, pledge or hypothecate assets having a market value not
exceeding the lesser of the dollar amounts borrowed or 10% of the
value of total assets at the time of the borrowing.
Lending Cash or Securities
The Fund will not lend any of its assets, except that it may
purchase or hold money market instruments, including repurchase
agreements, permitted by its investment objective and policies.
Investing in Commodities, Minerals, or Real Estate
The Fund will not invest in commodities, commodity contracts, oil,
gas, or other mineral programs or real estate, except that it may
purchase money market instruments issued by companies that invest
in or sponsor interests.
Underwriting
The Fund will not underwrite any issue of securities, except as it
may be deemed to be an underwriter under the Securities Act of
1933 in connection with the sale of restricted securities which
the Fund may purchase pursuant to its investment objective,
policies, and limitations.
Concentration of Investments
The Fund will not purchase money market instruments if, as a
result of such purchase, more than 25% of the value of its total
assets would be invested in one industry. However, investing in
bank instruments (such as time and demand deposits and
certificates of deposit), U.S. government obligations or
instruments secured by these money market instruments, such as
repurchase agreements, shall not be considered investments in any
one industry.
Acquiring Securities
The Fund will not acquire the voting securities of any issuer. It
will not invest in securities issued by any other investment
company, except as part of a merger, consolidation, or other
acquisition. It will not invest in securities of a company for the
purpose of exercising control or management.
Diversification of Investments
The Fund will not purchase securities issued by any
one issuer having a value of more than 5% of the value
of its total assets except cash or cash items,
repurchase agreements, and U.S. government
obligations.
Investing in Restricted Securities
The Fund will not invest in securities which are subject to
restrictions on resale under federal securities laws except that
the Fund may invest up to 10% of its net assets in high quality
securities subject to such restrictions. This limitation is not
applicable to commercial paper issued under Section 4(2) of the
Securities Act of 1933.
Investing in New Issuers
The Fund will not invest more than 5% of the value of its total
assets in money market instruments of unseasoned issuers,
including their predecessors, that have been in operation for less
than three years.
Investing in Options
The Fund will not invest in puts, calls, straddles, spreads, or
any combination of them.
Investing in Issuers Whose Securities are Owned by Officers and
Trustees
The Fund will not purchase or retain the securities of any issuer
if the officers and Trustees of the Trust or its investment
adviser, owning individually more than .50 of 1% of the issuer's
securities, together own more than 5% of the issuer's securities.
The above limitations cannot be changed without shareholder approval.
The following investment limitation, however, may be changed by the
Trustees without shareholder approval. Shareholders will be notified
before any material change in these limitations becomes effective.
Investing in Illiquid Securities
The Fund will not invest more than 10% of the value of its net
assets in illiquid securities.
For purposes of the above limitations, the Fund considers certificates
of deposit and demand and time deposits issued by a U.S. branch of a
domestic bank or savings and loan having capital, surplus, and undivided
profits in excess of $100,000,000 at the time of investment to be "cash
items". Except with respect to borrowing money, if a percentage
limitation is adhered to at the time of investment, a later increase or
decrease in percentage resulting from any change in value or net assets
will not result in a violation of such limitation.
Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in
percentage resulting from any change in value or net assets will not
result in a violation of such restriction.
The Fund did not borrow money or pledge securities in excess of 5% of
the value of its net assets during the last fiscal year and has no
present intent to do so during the coming fiscal year.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the
order at a favorable price. In working with dealers, the adviser will
generally use those who are recognized dealers in specific portfolio
instruments, except when a better price and execution of the order can
be obtained elsewhere. The adviser makes decisions on portfolio
transactions and selects brokers and dealers subject to guidelines
established by the Board of Trustees. The adviser may select brokers and
dealers who offer brokerage and research services. These services may be
furnished directly to the Fund or to the adviser and may include:
advice as to the advisability of investing in securities; security
analysis and reports; economic studies; industry studies; receipt of
quotations for portfolio evaluations; and similar services. Research
services provided by brokers and dealers may be used by the adviser or
its affiliates in advising the Fund and other accounts. To the extent
that receipt of these services may supplant services for which the
adviser or its affiliates might otherwise have paid, it would tend to
reduce their expenses. The adviser and its affiliates exercise
reasonable business judgment in selecting brokers who offer brokerage
and research services to execute securities transactions. They determine
in good faith that commissions charged by such persons are reasonable in
relationship to the value of the brokerage and research services
provided. During the fiscal years ended April 30, 1995, 1994 and 1993,
and for the period from April 30, 1995 to July 31, 1995, the Fund paid
no brokerage commissions.
Although investment decisions for the Fund are made independently from
those of the other accounts managed by the adviser, investments of the
type the Fund may make may also be made by those other accounts. When
the Fund and one or more other accounts managed by the adviser are
prepared to invest in, or desire to dispose of, the same security,
available investments or opportunities for sales will be allocated in a
manner believed by the adviser to be equitable to each. In some cases,
this procedure may adversely affect the price paid or received by the
Fund or the size of the position obtained or disposed of by the Fund. In
other cases, however, it is believed that coordination and the ability
to participate in volume transactions will be to the benefit of the
Fund.
MONEY MARKET OBLIGATIONS TRUST MANAGEMENT
Officers and Trustees are listed with their addresses, birthdates,
present positions with Money Market Obligations Trust, and principal
occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp. and Federated Global Research Corp.; Chairman, Passport
Research, Ltd.; Chief Executive Officer and Director, Trustee, or
Managing General Partner of the Funds. Mr. Donahue is the father of J.
Christopher Donahue, President and Trustee of the Trust.
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's
Hospital of Pittsburgh; Director, Trustee, or Managing General Partner
of the Funds; formerly, Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President,
John R. Wood and Associates, Inc., Realtors; President, Northgate
Village Development Corporation; Partner or Trustee in private real
estate ventures in Southwest Florida; Director, Trustee, or Managing
General Partner of the Funds; formerly, President, Naples Property
Management, Inc.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and
Director, Ryan Homes, Inc.
J. Christopher Donahue *
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
President and Trustee
President
President or Vice President of the Funds; Director, Trustee, or Managing
General Partner of some of the Funds. Mr. Donahue is the son of John F.
Donahue, Chairman and Trustee of the Trust.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine and Member, Board of Trustees, University of
Pittsburgh; Medical Director, University of Pittsburgh Medical Center -
Downtown; Member, Board of Directors, University of Pittsburgh Medical
Center; formerly, Hematologist, Oncologist, and Internist, Presbyterian
and Montefiore Hospitals; Director, Trustee, or Managing General Partner
of the Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty;
Director, Eat'N Park Restaurants, Inc., and Statewide Settlement Agency,
Inc.; Director, Trustee, or Managing General Partner of the Funds;
formerly, Counsel, Horizon Financial, F.A., Western Region.
Peter E. Madden
70 Westcliff Road
Westin, MA
Birthdate: March 16, 1942
Trustee
Consultant; State Representative, Commonwealth of Massachusetts;
Director, Trustee, or Managing General Partner of the Funds; formerly,
President, State Street Bank and Trust Company and State Street Boston
Corporation.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney-at-law; Partner, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner,
Mollica, Murray and Hogue; Director, Trustee or Managing General Partner
of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics and Management Consultant; Trustee,
Carnegie Endowment for International Peace, RAND Corporation, Online
Computer Library Center, Inc., and U.S. Space Foundation; Chairman,
Czecho Management Center; Director, Trustee, or Managing General Partner
of the Funds; President Emeritus, University of Pittsburgh; founding
Chairman, National Advisory Council for Environmental Policy and
Technology and Federal Emergency Management Advisory Board.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/marketing consultant; Conference Coordinator, Non-
profit entities; Director, Trustee, or Managing General Partner of the
Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of
some of the Funds; Director or Trustee of some of the Funds.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice
President, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., Federated Global Research Corp., and Passport
Research, Ltd.; Executive Vice President and Director, Federated
Securities Corp.; Trustee, Federated Services Company; Chairman,
Treasurer, and Trustee, Federated Administrative Services; Trustee or
Director of some of the Funds; Executive Vice President and Treasurer of
the Funds.
David M. Taylor
Federated Investors Tower
Pittsburgh, PA
Birthdate: January 13, 1947
Treasurer
Senior Vice President, Controller, and Trustee, Federated Investors;
Controller, Federated Advisers, Federated Management, Federated
Research, Federated Research Corp., and Passport Research, Ltd.; Vice
President, Federated Shareholder Services; Senior Vice President,
Federated Administrative Services; Treasurer of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Vice President, Secretary, General Counsel, and Trustee, Federated
Investors; Trustee, Federated Advisers, Federated Management, and
Federated Research; Director, Federated Research Corp. and Federated
Global Research Corp.; Trustee, Federated Services Company; Executive
Vice President, Secretary, and Trustee, Federated Administrative
Services; President and Trustee, Federated Shareholder Services;
Director, Federated Securities Corp.; Executive Vice President and
Secretary of the Funds.
* This Trustee is deemed to be an "interested person" as defined
in the Investment Company Act of 1940, as amended.
@ Member of the Executive Committee. The Executive Committee of
the Board of Trustees handles the responsibilities of the Board
of Trustees between meetings of the Board.
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; Automated Government Money Trust; Blanchard Funds;
Blanchard Precious Metals, Inc.; Cash Trust Series II; Cash Trust
Series, Inc.; DG Investor Series; Edward D. Jones & Co. Daily Passport
Cash Trust; Federated ARMs Fund; Federated Equity Funds; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated High Yield Trust; Federated Income Securities Trust; Federated
Income Trust; Federated Index Trust; Federated Institutional Trust;
Federated Master Trust; Federated Municipal Trust; Federated Short-Term
Municipal Trust; Federated Short-Term U.S. Government Trust; Federated
Stock Trust; Federated Tax-Free Trust; Federated Total Return Series,
Inc.; Federated U.S. Government Bond Fund; Federated U.S. Government
Securities Fund: 1-3 Years; Federated U.S, Government Securities Fund: 3-
5 Years; First Priority Funds; Fixed Income Securities, Inc.; Fortress
Adjustable Rate U.S. Government Fund, Inc.; Fortress Municipal Income
Fund, Inc.; Fortress Utility Fund, Inc.; Fund for U.S. Government
Securities, Inc.; Government Income Securities, Inc.; High Yield Cash
Trust;; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond
Fund, Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S.
Government Money Market Trust; Liberty Term Trust, Inc. - 1999; Liberty
Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust; Money
Market Management, Inc.; Money Market Obligations Trust; Money Market
Trust; Municipal Securities Income Trust; Newpoint Funds; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Star Funds; The Starburst Funds; The Starburst Funds II;
Stock and Bond Fund, Inc.; Sunburst Funds; Targeted Duration Trust; Tax-
Free Instruments Trust; Trust for Financial Institutions; Trust For
Government Cash Reserves; Trust for Short-Term U.S. Government
Securities; Trust for U.S. Treasury Obligations; The Virtus Funds; World
Investment Series, Inc.
SHARE OWNERSHIP
Officers and Trustees as a group own less than 1% of the Fund's
outstanding shares.
As of September 6, 1995, the following shareholders of record owned 5%
or more of the outstanding shares of the Fund: Stephens Inc., Little
Rock, AR, owned approximately 113.462,732 shares (9.50%); State Street
Bank and Trust, North Quincy, MA, owned approximately 67,578,920 shares
(5.66%); and BHC Securities Inc., Philadelphia, PA, owned approximately
60,303,018 shares (5.05%).
Trustees COMPENSATION
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST*# FROM FUND COMPLEX +
John F. Donahue $0 $0 for the Trust and
Chairman and Trustee 68 other investment companies in the
Fund Complex
Thomas G. Bigley $3,078 $20,688 for the Trust and
Trustee 49 other investment companies in the
Fund Complex
John T. Conroy, Jr. $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
William J. Copeland $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
J. Christopher Donahue $0 $0 for the Trust and
President and Trustee 14 other investment companies in the
Fund Complex
James E. Dowd $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Lawrence D. Ellis, M.D. $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Edward L. Flaherty, Jr. $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Peter E. Madden $2,978 $90,563 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Gregor F. Meyer $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
John E. Murray, Jr., $863 $0 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Wesley W. Posvar $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Marjorie P. Smuts $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
*Information is furnished for the fiscal year ended July 31, 1995.
#The aggregate compensation is provided for the Trust which is comprised
of six portfolios.
+The information is provided for the last calendar year.
TRUSTEE LIABILITY
The Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of their
office.
INVESTMENT ADVISORY SERVICES
INVESTMENT ADVISER
The Fund's investment adviser is Federated Management. It is a
subsidiary of Federated Investors. All the voting securities of
Federated Investors are owned by a trust, the trustees of which are John
F. Donahue, his wife and his son, J. Christopher Donahue.
The adviser shall not be liable to the Trust, the Fund, or any
shareholder of the Fund for any losses that may be sustained in the
purchase, holding, or sale of any security or for anything done or
omitted by it, except acts or omissions involving willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties imposed
upon it by its contract with the Trust.
ADVISORY FEES
For its advisory services, Federated Management receives an annual
investment advisory fee as described in the prospectus. For the fiscal
years ended April 30, 1995, 1994 and 1993, and for the period from April
30, 1995 to July 31, 1995, the adviser earned $5,173,695, $5,207,744,
$6,173,392 and $1,348,977, of which $3,374,156, $724,909, $488,070 and
$1,049,124 were waived.
State Expense Limitations
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose
shares are registered for sale in those states. If the Fund's
normal operating expenses (including the investment advisory fee,
but not including brokerage commissions, interest, taxes, and
extraordinary expenses) exceed 2-1/2% per year of the first $30
million of average net assets, 2% per year of the next $70 million
of average net assets, and 1-1/2% per year of the remaining
average net assets, the adviser will reimburse the Fund for its
expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by
the amount of the excess, subject to an annual adjustment. If the
expense limitation is exceeded, the amount to be reimbursed by the
adviser will be limited, in any single fiscal year, by the amount
of the investment advisory fees.
This arrangement is not part of the advisory contract and may be amended
or rescinded in the future.
FUND ADMINISTRATION
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Fund for a fee as
described in the prospectus. Prior to March 1, 1994, Federated
Administrative Services, Inc., also a subsidiary of Federated Investors,
served as the Fund's Administrator. (For purposes of this Statement of
Additional Information, Federated Administrative Services and Federated
Administrative Services, Inc., may hereinafter collectively be referred
to as, the "Administrators".) For the fiscal year ended April 30, 1995,
and for the period from April 30, 1995 to July 31, 1995, Federated
Administrative Services earned $783,297 and $204,235, respectively. For
the fiscal year ended April 30, 1994, the Administrators collectively
earned $721,387. For the fiscal year ended April 30, 1993, Federated
Administrative Services, Inc., earned $649,911. Dr. Henry J. Gailliot,
an officer of Federated Management, the adviser to the Fund, holds
approximately 20% of the outstanding common stock and serves as a
director of Commercial Data Services, Inc., a company which provides
computer processing services to Federated Administrative Services.
SHAREHOLDER SERVICES AGREEMENT
This arrangement permits the payment of fees to Federated Shareholder
Services and financial institutions to cause services to be provided
which are necessary for the maintenance of shareholder accounts and to
encourage personal services to shareholders by a representative who has
knowledge of the shareholder's particular circumstances and goals. These
activities and services may include, but are not limited to: providing
office space, equipment, telephone facilities, and various clerical,
supervisory, computer, and other personnel as necessary or beneficial to
establish and maintain shareholder accounts and records; processing
purchase and redemption transactions and automatic investments of client
account cash balances; answering routine client inquiries; and assisting
clients in changing dividend options, account designations, and
addresses. By adopting the Shareholder Services Agreement, the Board of
Trustees expects that the Fund will benefit by: (1) providing personal
services to shareholders; (2) investing shareholder assets with a
minimum of delay and administrative detail; (3) enhancing shareholder
recordkeeping systems; and (4) responding promptly to shareholders'
requests and inquiries concerning their accounts.
For the fiscal year ended April 30, 1995, and for the period from April
30, 1995 to July 31, 1995, the Fund paid shareholder services fees in
the amount of $2,483,374 and $674,489, respectively, all of which were
paid to financial institutions.
Custodian and Portfolio Recordkeeper. State Street Bank and Trust
Company, Boston, MA, is custodian for the securities and cash of the
Fund. Federated Services Company, Pittsburgh, PA, provides certain
accounting and recordkeeping services with respect to the Fund's
portfolio investments.
Transfer Agent. As transfer agent, Federated Services Company maintains
all necessary shareholder records. For its services, the transfer agent
receives a fee based on the size, type and number of accounts and
transactions made by shareholders.
DETERMINING NET ASSET VALUE
The Trustees have decided that the best method for determining the value
of portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for
amortization of premium or accumulation of discount rather than at
current market value. Accordingly, neither the amount of daily income
nor the net asset value is affected by any unrealized appreciation or
depreciation of the portfolio. In periods of declining interest rates,
the indicated daily yield on shares of the Fund computed by dividing the
annualized daily income on the Fund's portfolio by the net asset value
computed as above may tend to be higher than a similar computation made
by using a method of valuation based upon market prices and estimates.
In periods of rising interest rates, the opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio
instruments depends on its compliance with certain conditions in Rule 2a-
7 (the "Rule") promulgated by the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended. Under the Rule,
the Trustees must establish procedures reasonably designed to stabilize
the net asset value per share, as computed for purposes of distribution
and redemption, at $1.00 per share, taking into account current market
conditions and the Fund's investment objective. The procedures include
monitoring the relationship between the amortized cost value per share
and the net asset value per share based upon available indications of
market value. The Trustees will decide what, if any, steps should be
taken if there is a difference of more than 0.5 of 1% between the two
values. The Trustees will take any steps they consider appropriate (such
as redemption in kind or shortening the average portfolio maturity) to
minimize any material dilution or other unfair results arising from
differences between the two methods of determining net asset value.
REDEMPTION IN KIND
The Fund is obligated to redeem shares solely in cash up to $250,000 or
1% of the Fund's net asset value, whichever is less, for any one
shareholder within a 90-day period. Any redemption beyond this amount
will also be in cash unless the Trustees determine that further payments
should be in kind. In such cases, the Fund will pay all or a portion of
the remainder of the redemption in portfolio instruments valued in the
same way as the Fund determines net asset value. The portfolio
instruments will be selected in a manner that the Trustees deem fair and
equitable. Redemption in kind is not as liquid as a cash redemption. If
redemption is made in kind, shareholders who sell these securities could
receive less than the redemption value and could incur certain
transaction costs.
THE FUND'S TAX STATUS
To qualify for the special tax treatment afforded to regulated
investment companies, the Fund must, among other requirements: derive
at least 90% of its gross income from dividends, interest, and gains
from the sale of securities; derive less than 30% of its gross income
from the sale of securities held less than three months; invest in
securities within certain statutory limits; and distribute to its
shareholders at least 90% of its net income earned during the year.
PERFORMANCE INFORMATION
Performance depends upon such variables as: portfolio quality; average
portfolio maturity; type of instruments in which the portfolio is
invested; changes in interest rates; changes in expenses; and the
relative amount of cash flow. To the extent that financial institutions
and broker/dealers charge fees in connection with services provided in
conjunction with an investment in shares of the Fund, the performance
will be reduced for those shareholders paying those fees.
YIELD
The yield is calculated based upon the seven days ending on the day of
the calculation, called the "base period." This yield is computed by:
determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net
change excluding capital changes but including the value of any
additional shares purchased with dividends earned from the original one
share and all dividends declared on the original and any purchased
shares; dividing the net change in the account's value by the value of
the account at the beginning of the base period to determine the base
period return; and multiplying the base period return by 365/7.
The Fund's yield for the seven-day period ended July 31, 1995, was
5.42%.
EFFECTIVE YIELD
The effective yield is calculated by compounding the unannualized base
period return by: adding 1 to the base period return; raising the sum to
the 365/7th power; and subtracting 1 from the result.
The Fund's effective yield for the seven-day period ended July 31, 1995,
was 5.57%.
TOTAL RETURN
Average annual total return is the average compounded rate of return for
a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value
is computed by multiplying the number of shares owned at the end of the
period by the net asset value per share at the end of the period. The
number of shares owned at the end of the period is based on the number
of shares purchased at the beginning of the period with $1,000, adjusted
over the period by any additional shares, assuming the monthly
reinvestment of all dividends and distributions.
The Fund's average annual total returns for the one-, five- and ten-year
periods ended April 30, 1995, were 5.31%, 4.53%, and 5.99%,
respectively.
Cumulative total return reflects the Fund's total performance over a
specific period of time. The cumulative total return for the Fund for
the period from April 30, 1995 through July 31, 1995 was 1.42%. This
total return is representative of only three months of activity since
the Fund changed its fiscal year end.
PERFORMANCE COMPARISONS
Investors may use financial publications and/or indices to obtain a
more complete view of the Fund's performance. When comparing
performance, investors should consider all relevant factors such as
the composition of any index used, prevailing market conditions,
portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial
publications and/or indices which the Fund uses in advertising may
include:
OLIPPER ANALYTICAL SERVICES, INC., ranks funds in various fund
categories based on total return, which assumes the reinvestment of
all income dividends and capital gains distributions, if any.
oDONOGHUE'S MONEY FUND REPORT publishes annualized yields of money
market funds weekly. Donoghue's MONEY MARKET INSIGHT publication
reports monthly and 12-month-to-date investment results for the same
money funds.
oMONEY, a monthly magazine, regularly ranks money market funds in
various categories based on the latest available seven-day effective
yield.
oSALOMON 30-DAY CD INDEX compares rate levels of 30-day certificates
of deposit from the top ten prime representative banks.
ABOUT FEDERATED INVESTORS
Federated is dedicated to meeting investor needs which is reflected in
its investment decision making structured, straightforward, and
consistent. This has resulted in a history of competitive performance
with a range of competitive investment products that have gained the
confidence of thousands of clients and their customers.
The company's disciplined security selection process is firmly rooted in
sound methodologies backed by fundamental and technical research.
Investment decisions are made and executed by teams of portfolio
managers, analysts, and traders dedicated to specific market sectors.
In the money market sector, Federated gained prominence in the mutual
fund industry in 1974 with the creation of the first institutional money
market fund. Simultaneously, the company pioneered the use of the
amortized cost method of accounting for valuing shares of money market
funds, a principal means used by money managers today to value money
market fund shares. Other innovations include the first institutional
tax-free money market fund. As of December 31, 1994, Federated managed
more than $31 billion in assets across approximately 43 money market
funds, including 17 government, 8 prime and 18 municipal with assets
approximating $17 billion, $7.4 billion and $6.6 billion, respectively.
J. Thomas Madden, Executive Vice President, oversees Federated's equity
and high yield corporate bond management while William D. Dawson,
Executive Vice President, oversees Federated's domestic fixed income
management. Henry A. Frantzen, Executive Vice President, oversees the
management of Federated's international portfolios.
MUTUAL FUND MARKET
Twenty-seven percent of American households are pursuing their financial
goals through mutual funds. These investors, as well as businesses and
institutions, have entrusted over $2 trillion to the more than 5,500
funds available.*
Federated Investors, through its subsidiaries, distributes mutual funds
for a variety of investment applications. Specific markets include:
INSTITUTIONAL
Federated meets the needs of more than 4,000 institutional clients
nationwide by managing and servicing separate accounts and mutual funds
for a variety of applications, including defined benefit and defined
contribution programs, cash management, and asset/liability management.
Institutional clients include corporations, pension funds, tax-exempt
entities, foundations/endowments, insurance companies, and investment
and financial advisors. The marketing effort to these institutional
clients is headed by John B. Fisher, President, Institutional Sales
Division.
TRUST ORGANIZATIONS
Other institutional clients include close relationships with more than
1,500 banks and trust organizations. Virtually all of the trust
divisions of the top 100 bank holding companies use Federated funds in
their clients' portfolios. The marketing effort to trust clients is
headed by Mark R. Gensheimer, Executive Vice President, Bank Marketing &
Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated mutual funds are available to consumers through major
brokerage firms nationwide including 200 New York Stock Exchange firms
supported by more wholesalers than any other mutual fund distributor.
The marketing effort to these firms is headed by James F. Getz,
President, Broker/Dealer Division.
*Source: Investment Company Institute
60934N849
G01140-03 (9/95)
GOVERNMENT OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST )
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
Combined Statement of Additional Information
This Combined Statement of Additional Information should be read
with the prospectuses of Government Obligations Fund (the "Fund"),
a portfolio of Money Market Obligations Trust (the "Trust") dated
September 30, 1995. This Statement is not a prospectus. To receive
a copy of a prospectus, write or call the Fund.
Federated Investors Tower
Pittsburgh, PA 15222-3779
Statement dated September 30, 1995
Federated Securities Corp.
Distributor
A subsidiary of
Federated Investors
INVESTMENT POLICIES 1
Acceptable Investments 1
When-Issued and Delayed
Delivery Transactions 1
Repurchase Agreements 1
Reverse Repurchase Agreements 1
Lending of Portfolio Securities 1
INVESTMENT LIMITATIONS 2
BROKERAGE TRANSACTIONS 3
MONEY MARKET OBLIGATIONS TRUST
MANAGEMENT 4
Share Ownership 8
Trustees Compensation 8
Trustee Liability 9
INVESTMENT ADVISORY SERVICES 9
Investment Adviser 9
Advisory Fees 9
FUND ADMINISTRATION 10
SHAREHOLDER SERVICES AGREEMENT 10
DETERMINING NET ASSET VALUE 10
REDEMPTION IN KIND 11
THE FUND'S TAX STATUS 11
PERFORMANCE INFORMATION 11
Yield 11
Effective Yield 11
Total Return 11
Performance Comparisons 12
ABOUT FEDERATED INVESTORS 12
Mutual Fund Market 12
Institutional 12
Trust Organizations 13
Broker/Dealers and Bank
Broker/Dealer Subsidiaries 13
INVESTMENT POLICIES
Unless indicated otherwise, the policies described below may be changed
by the Board of Trustees without shareholder approval. Shareholders will
be notified before any material change in these policies becomes
effective.
ACCEPTABLE INVESTMENTS
Some of the short-term U.S. government securities the Fund may purchase
carry variable interest rates. These securities have a rate of interest
subject to adjustment at least annually. This adjusted interest rate is
ordinarily tied to some objective standard, such as the 91-day U.S.
Treasury bill rate. Variable interest rates will reduce the changes in
the market value of such securities from their original purchase prices.
Accordingly, the potential for capital appreciation or capital
depreciation should not be greater than that of fixed interest rate U.S.
government securities having maturities equal to the interest rate
adjustment dates of the variable rate U.S. government securities. The
Fund may purchase variable rate U.S. government securities upon the
determination by the Board of Trustees that the interest rate as
adjusted will cause the instrument to have a current market value that
approximates its par value on the adjustment date.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. No fees or other expenses,
other than normal transaction costs, are incurred. However, liquid
assets of the Fund sufficient to make payment for the securities to be
purchased are segregated on the Fund's records at the trade date. These
assets are marked to market daily and are maintained until the
transaction has been settled. The Fund does not intend to engage in when-
issued and delayed delivery transactions to an extent that would cause
the segregation of more than 20% of the total value of its assets.
REPURCHASE AGREEMENTS
The Fund or its custodian will take possession of the securities subject
to repurchase agreements, and these securities will be marked to market
daily. In the event that a defaulting seller filed for bankruptcy or
became insolvent, disposition of such securities by the Fund might be
delayed pending court action. The Fund believes that under the regular
procedures normally in effect for custody of the Fund's portfolio
securities subject to repurchase agreements, a court of competent
jurisdiction would rule in favor of the Fund and allow retention or
disposition of such securities. The Fund will only enter into repurchase
agreements with banks and other recognized financial institutions, such
as broker/dealers, which are deemed by the Fund's adviser to be
creditworthy pursuant to guidelines established by the Trustees.
REVERSE REPURCHASE AGREEMENTS
The Fund may also enter into reverse repurchase agreements. These
transactions are similar to borrowing cash. In a reverse repurchase
agreement, the Fund transfers possession of a portfolio instrument in
return for a percentage of the instrument's market value in cash and
agrees that on a stipulated date in the future the Fund will repurchase
the portfolio instrument by remitting the original consideration plus
interest at an agreed upon rate. The use of reverse repurchase
agreements may enable the Fund to avoid selling portfolio instruments at
a time when a sale may be deemed to be disadvantageous, but does not
ensure this result. When effecting reverse repurchase agreements, liquid
assets of the Fund, in a dollar amount sufficient to make payment for
the obligations to be purchased, are: segregated on the Fund's records
at the trade date; marked to market daily; and maintained until the
transaction is settled.
LENDING OF PORTFOLIO SECURITIES
The collateral received when the Fund lends portfolio securities must be
valued daily and, should the market value of the loaned securities
increase, the borrower must furnish additional collateral to the Fund.
During the time portfolio securities are on loan, the borrower pays the
Fund any dividends or interest paid on such securities. Loans are
subject to termination at the option of the Fund or the borrower. The
Fund may pay reasonable administrative and custodial fees in connection
with a loan and may pay a negotiated portion of the interest earned on
the cash or equivalent collateral to the borrower or placing broker.
INVESTMENT LIMITATIONS
Selling Short and Buying on Margin
The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as may be
necessary for clearance of transactions.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities except that the Fund may
borrow money directly or through reverse repurchase agreements in
amounts up to one-third of the value of its total assets, including
the amounts borrowed.
The Fund will not borrow money or engage in reverse repurchase
agreements for investment leverage, but rather as a temporary,
extraordinary, or emergency measure or to facilitate management of
the portfolio by enabling the Fund to meet redemption requests when
the liquidation of portfolio securities is deemed to be inconvenient
or disadvantageous. The Fund will not purchase any securities while
borrowings in excess of 5% of the value of its total assets are
outstanding. During the period any reverse repurchase agreements are
outstanding, the Fund will restrict the purchase of portfolio
securities to money market instruments maturing on or before the
expiration date of the reverse repurchase agreements, but only to the
extent necessary to assure completion of the reverse repurchase
agreements.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets except
to secure permitted borrowings. In those cases, it may pledge assets
having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of total assets of the Fund at the time
of the pledge.
Lending Cash or Securities
The Fund will not lend any of its assets, except portfolio
securities. This shall not prevent the Fund from purchasing or
holding bonds, debentures, notes, certificates of indebtedness or
other debt securities, entering into repurchase agreements or
engaging in other transactions where permitted by its investment
objective, policies, and limitations or Declaration of Trust.
Investing in Commodities
The Fund will not purchase or sell commodities, commodity contracts,
or commodity futures contracts.
Investing in Real Estate
The Fund will not purchase or sell real estate, including limited
partnership interests, although it may invest in securities of
issuers whose business involves the purchase or sale of real estate
or in securities which are secured by real estate or interests in
real estate.
Underwriting
The Fund will not underwrite any issue of securities, except as it
may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its
investment objective, policies, and limitations.
Concentration of Investments
The Fund will not invest 25% or more of the value of its total assets
in any one industry, except that the Fund may invest 25% or more of
the value of its total assets in cash, cash items, or securities
issued or guaranteed by the government of the United States or its
agencies, or instrumentalities and repurchase agreements
collateralized by such U.S. government securities.
Diversification of Investments
With respect to securities comprising 75% of the value of its total
assets, the Fund will not purchase securities of any one issuer
(other than cash, cash items, or securities issued or guaranteed by
the government of the United States or its agencies or
instrumentalities and repurchase agreements collateralized by such
U.S. government securities) if as a result more than 5% of the value
of its total assets would be invested in the securities of that
issuer, or if it would own more than 10% of the outstanding voting
securities of that issuer.
The above limitations cannot be changed without shareholder approval.
The following investment limitations, however, may be changed by the
Trustees without shareholder approval. Shareholders will be notified
before any material change in these limitations becomes effective.
Investing in Restricted Securities
The Fund will not invest in securities subject to restrictions on
resale under federal securities law.
Investing in Illiquid Securities
The Fund will not invest more than 10% of the value of its net assets
in illiquid securities.
Investing in Securities of Other Investment Companies
The Fund will not purchase securities of other investment companies,
except as part of a merger, consolidation, or other acquisition.
Investing in New Issuers
The Fund will not invest more than 5% of the value of its total
assets in securities of issuers which have records of less than three
years of continuous operations, including the operation of any
predecessor.
Investing for Control
The Fund will not invest in securities of a company for the purpose
of exercising control or management.
Investing in Issuers Whose Securities are Owned by Officers of the Trust
The Fund will not purchase or retain the securities of any issuer if
the Officers and Trustees of the Trust or the Fund's investment
adviser owning individually more than .50 of 1% of the issuer's
securities together own more than 5% of the issuer's securities.
Investing in Options
The Fund will not invest in puts, calls, straddles, spreads, or any
combination of them.
Investing in Minerals
The Fund will not purchase or sell interests in oil, gas, or other
mineral exploration or development programs or leases, although it
may purchase the securities of issuers which invest in or sponsor
such programs.
For purposes of the above limitations, the Fund considers certificates
of deposit and demand and time deposits issued by a U.S. branch of a
domestic bank or savings and loan having capital, surplus, and undivided
profits in excess of $100,000,000 at the time of investment to be "cash
items." Except with respect to borrowing money, if a percentage
limitation is adhered to at the time of investment, a later increase or
decrease in percentage resulting from any change in value or net assets
will not result in a violation of such limitation.
The Fund did not borrow money or pledge securities in excess of 5% of
the value of its net assets during the last fiscal year and has no
present intent to do so during the coming fiscal year.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the
order at a favorable price. In working with dealers, the adviser will
generally use those who are recognized dealers in specific portfolio
instruments, except when a better price and execution of the order can
be obtained elsewhere. The adviser makes decisions on portfolio
transactions and selects brokers and dealers subject to guidelines
established by the Board of Trustees. The adviser may select brokers and
dealers who offer brokerage and research services. These services may be
furnished directly to the Fund or to the adviser and may include: advice
as to the advisability of investing in securities; security analysis and
reports; economic studies; industry studies; receipt of quotations for
portfolio evaluations; and similar services. Research services provided
by brokers and dealers may be used by the adviser or its affiliates in
advising the Fund and other accounts. To the extent that receipt of
these services may supplant services for which the adviser or its
affiliates might otherwise have paid, it would tend to reduce their
expenses. The adviser and its affiliates exercise reasonable business
judgment in selecting brokers who offer brokerage and research services
to execute securities transactions. They determine in good faith that
commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided. During the
fiscal years ended July 31, 1995, 1994, and 1993 the Fund paid no
brokerage commissions.
Although investment decisions for the Fund are made independently from
those of the other accounts managed by the adviser, investments of the
type the Fund may make may also be made by those other accounts. When
the Fund and one or more other accounts managed by the adviser are
prepared to invest in, or desire to dispose of, the same security,
available investments or opportunities for sales will be allocated in a
manner believed by the adviser to be equitable to each. In some cases,
this procedure may adversely affect the price paid or received by the
Fund or the size of the position obtained or disposed of by the Fund. In
other cases, however, it is believed that coordination and the ability
to participate in volume transactions will be to the benefit of the
Fund.
MONEY MARKET OBLIGATIONS TRUST MANAGEMENT
Officers and Trustees are listed with their addresses, birthdates,
present positions with Money Market Obligations Trust, and principal
occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp. and Federated Global Research Corp.; Chairman, Passport
Research, Ltd.; Chief Executive Officer and Director, Trustee, or
Managing General Partner of the Funds. Mr. Donahue is the father of J.
Christopher Donahue, President and Trustee of the Trust.
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's
Hospital of Pittsburgh; Director, Trustee, or Managing General Partner
of the Funds; formerly, Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President,
John R. Wood and Associates, Inc., Realtors; President, Northgate
Village Development Corporation; Partner or Trustee in private real
estate ventures in Southwest Florida; Director, Trustee, or Managing
General Partner of the Funds; formerly, President, Naples Property
Management, Inc.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and
Director, Ryan Homes, Inc.
J. Christopher Donahue *
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
President and Trustee
President and Trustee, Federated Investors, Federated Advisers,
Federated Management, and Federated Research; President and Director,
Federated Research Corp. and Federated Global Research Corp.; President,
Passport Research, Ltd.; Trustee, Federated Administrative Services,
Federated Services Company, and Federated Shareholder Services;
President or Vice President of the Funds; Director, Trustee, or Managing
General Partner of some of the Funds. Mr. Donahue is the son of John F.
Donahue, Chairman and Trustee of the Trust.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine and Member, Board of Trustees, University of
Pittsburgh; Medical Director, University of Pittsburgh Medical Center -
Downtown; Member, Board of Directors, University of Pittsburgh Medical
Center; formerly, Hematologist, Oncologist, and Internist, Presbyterian
and Montefiore Hospitals; Director, Trustee, or Managing General Partner
of the Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty;
Director, Eat'N Park Restaurants, Inc., and Statewide Settlement Agency,
Inc.; Director, Trustee, or Managing General Partner of the Funds;
formerly, Counsel, Horizon Financial, F.A., Western Region.
Peter E. Madden
70 Westcliff Road
Westin, MA
Birthdate: March 16, 1942
Trustee
Consultant; State Representative, Commonwealth of Massachusetts;
Director, Trustee, or Managing General Partner of the Funds; formerly,
President, State Street Bank and Trust Company and State Street Boston
Corporation.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney-at-law; Partner, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner,
Mollica, Murray and Hogue; Director, Trustee or Managing General Partner
of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics and Management Consultant; Trustee,
Carnegie Endowment for International Peace, RAND Corporation, Online
Computer Library Center, Inc., and U.S. Space Foundation; Chairman,
Czecho Management Center; Director, Trustee, or Managing General Partner
of the Funds; President Emeritus, University of Pittsburgh; founding
Chairman, National Advisory Council for Environmental Policy and
Technology and Federal Emergency Management Advisory Board.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/marketing consultant; Conference Coordinator, Non-
profit entities; Director, Trustee, or Managing General Partner of the
Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of
some of the Funds; Director or Trustee of some of the Funds.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice
President, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., Federated Global Research Corp., and Passport
Research, Ltd.; Executive Vice President and Director, Federated
Securities Corp.; Trustee, Federated Services Company; Chairman,
Treasurer, and Trustee, Federated Administrative Services; Trustee or
Director of some of the Funds; Executive Vice President and Treasurer of
the Funds.
David M. Taylor
Federated Investors Tower
Pittsburgh, PA
Birthdate: January 13, 1947
Treasurer
Senior Vice President, Controller, and Trustee, Federated Investors;
Controller, Federated Advisers, Federated Management, Federated
Research, Federated Research Corp., and Passport Research, Ltd.; Vice
President, Federated Shareholder Services; Senior Vice President,
Federated Administrative Services; Treasurer of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Federat
Federated Research; Director, Federated Research Corp. and Federated
Global Research Corp.; Trustee, Federated Services Company; Executive
Vice President, Secretary, and Trustee, Federated Administrative
Services; President and Trustee, Federated Shareholder Services;
Director, Federated Securities Corp.; Executive Vice President and
Secretary of the Funds.
* This Trustee is deemed to be an "interested person" as defined
in the Investment Company Act of 1940, as amended.
@ Member of the Executive Committee. The Executive Committee of
the Board of Trustees handles the responsibilities of the Board
of Trustees between meetings of the Board.
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; Automated Government Money Trust; Blanchard Funds;
Blanchard Precious Metals, Inc.; Cash Trust Series II; Cash Trust
Series, Inc.; DG Investor Series; Edward D. Jones & Co. Daily Passport
Cash Trust; Federated ARMs Fund; Federated Equity Funds; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated High Yield Trust; Federated Income Securities Trust; Federated
Income Trust; Federated Index Trust; Federated Institutional Trust;
Federated Master Trust; Federated Municipal Trust; Federated Short-Term
Municipal Trust; Federated Short-Term U.S. Government Trust; Federated
Stock Trust; Federated Tax-Free Trust; Federated Total Return Series,
Inc.; Federated U.S. Government Bond Fund; Federated U.S. Government
Securities Fund: 1-3 Years; Federated U.S, Government Securities Fund: 3-
5 Years; First Priority Funds; Fixed Income Securities, Inc.; Fortress
Adjustable Rate U.S. Government Fund, Inc.; Fortress Municipal Income
Fund, Inc.; Fortress Utility Fund, Inc.; Fund for U.S. Government
Securities, Inc.; Government Income Securities, Inc.; High Yield Cash
Trust;; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond
Fund, Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S.
Government Money Market Trust; Liberty Term Trust, Inc. - 1999; Liberty
Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust; Money
Market Management, Inc.; Money Market Obligations Trust; Money Market
Trust; Municipal Securities Income Trust; Newpoint Funds; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Star Funds; The Starburst Funds; The Starburst Funds II;
Stock and Bond Fund, Inc.; Sunburst Funds; Targeted Duration Trust; Tax-
Free Instruments Trust; Trust for Financial Institutions; Trust For
Government Cash Reserves; Trust for Short-Term U.S. Government
Securities; Trust for U.S. Treasury Obligations; The Virtus Funds; World
Investment Series, Inc.
SHARE OWNERSHIP
Officers and Trustees as a group own less than 1% of the Fund's
outstanding shares.
As of September 6, 1995, the following shareholders of record owned 5%
or more of the outstanding Institutional Shares of the Fund: Var & Co.,
St. Paul, MN, owned approximately 145,337,049 shares (7.68%); Palm Beach
County, West Palm Beach, FL, owned approximately 134,986,805 shares
(7.13%); First NH Investment Services, Concord, NH, owned approximately
127,181,075 shares (6.72%); Mertru and Company, Muncie, IN, owned
approximately 102,435,426 shares (5.41%); and COM II, Jersey City, NJ,
owned approximately 99,374,772 shares (5.25%).
As of September 6, 1995, the following shareholders of record owned 5%
or more of the outstanding Institutional Service Shares of the Fund:
Putnam Trust Company, Greenwich, CT, owned approximately 118,529,400
shares (34.82%); Basaba & Co., Bangor, ME, owned approximately
21,199,729 shares (6.23%); and Shakopee Mdewakanton Sioux, Prior Lake,
MN, owned approximately 18,175,931 shares (5.34%).
TRUSTEES COMPENSATION
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST*# FROM FUND COMPLEX +
John F. Donahue $0 $0 for the Trust and
Chairman and Trustee 68 other investment companies in the
Fund Complex
Thomas G. Bigley $3,078 $20,688 for the Trust and
Trustee 49 other investment companies in the
Fund Complex
John T. Conroy, Jr. $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
William J. Copeland $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
J. Christopher Donahue $0 $0 for the Trust and
President and Trustee 14 other investment companies in the
Fund Complex
James E. Dowd $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Lawrence D. Ellis, M.D. $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Edward L. Flaherty, Jr. $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Peter E. Madden $2,978 $90,563 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Gregor F. Meyer $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
John E. Murray, Jr., $863 $0 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Wesley W. Posvar $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Marjorie P. Smuts $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
*Information is furnished for the fiscal year ended July 31, 1995.
#The aggregate compensation is provided for the Trust which is comprised
of six portfolios.
+The information is provided for the last calendar year.
TRUSTEE LIABILITY
The Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of their
office.
INVESTMENT ADVISORY SERVICES
INVESTMENT ADVISER
The Fund's investment adviser is Federated Management. It is a
subsidiary of Federated Investors. All the voting securities of
Federated Investors are owned by a trust, the trustees of which are John
F. Donahue, his wife and his son, J. Christopher Donahue.
The adviser shall not be liable to the Trust, the Fund, or any
shareholder of the Fund for any losses that may be sustained in the
purchase, holding, or sale of any security or for anything done or
omitted by it, except acts or omissions involving willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties imposed
upon it by its contract with the Trust.
ADVISORY FEES
For its advisory services, Federated Management receives an annual
investment advisory fee as described in the prospectus. For the fiscal
years ended July 31, 1995, 1994 and 1993, the adviser earned $2,842,786,
$1,348,444, and $1,343,686, respectively, of which $2,063,842, $990,717,
and $768,184, respectively, were waived.
State Expense Limitations
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose
shares are registered for sale in those states. If the Fund's
normal operating expenses (including the investment advisory fee,
but not including brokerage commissions, interest, taxes, and
extraordinary expenses) exceed 2-1/2% per year of the first $30
million of average net assets, 2% per year of the next $70 million
of average net assets, and 1-1/2% per year of the remaining
average net assets, the adviser will reimburse the Fund for its
expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by
the amount of the excess, subject to an annual adjustment. If the
expense limitation is exceeded, the amount to be reimbursed by the
adviser will be limited, in any single fiscal year, by the amount
of the investment advisory fees.
This arrangement is not part of the advisory contract and may be
amended or rescinded in the future.
FUND ADMINISTRATION
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Fund for a fee as
described in the prospectus. Prior to March 1, 1994, Federated
Administrative Services, Inc., also a subsidiary of Federated Investors,
served as the Fund's Administrator. (For purposes of this Statement of
Additional Information, Federated Administrative Services and Federated
Administrative Services, Inc. may hereinafter collectively be referred
to as the "Administrators".) For the fiscal year ended July 31, 1995,
Federated Administrative Services earned $1,075,995. For the fiscal year
ended July 31, 1994, the Administrators collectively earned $483,421.
For the fiscal year ended July 31, 1993, Federated Administrative
Services, Inc., earned $377,706. Dr. Henry J. Gailliot, an officer of
Federated Management, the adviser to the Fund, holds approximately 20%
of the outstanding common stock and serves as a director of Commercial
Data Services, Inc., a company which provides computer processing
services to Federated Administrative Services.
SHAREHOLDER SERVICES AGREEMENT
This arrangement permits the payment of fees to Federated Shareholder
Services and financial institutions to cause services to be provided
which are necessary for the maintenance of shareholder accounts and to
encourage personal services to shareholders by a representative who has
knowledge of the shareholder's particular circumstances and goals. These
activities and services may include, but are not limited to: providing
office space, equipment, telephone facilities, and various clerical,
supervisory, computer, and other personnel as necessary or beneficial to
establish and maintain shareholder accounts and records; processing
purchase and redemption transactions and automatic investments of client
account cash balances; answering routine client inquiries; and assisting
clients in changing dividend options, account designations, and
addresses. By adopting the Shareholder Services Agreement, the Board of
Trustees expects that the Fund will benefit by: (1) providing personal
services to shareholders; (2) investing shareholder assets with a
minimum of delay and administrative detail; (3) enhancing shareholder
recordkeeping systems; and (4) responding promptly to shareholders'
requests and inquiries concerning their accounts. For the fiscal period
ending July 31, 1995, the Fund paid shareholder service fees in the
amount of $369,663 pursuant to the Shareholder Services Plan on behalf
of Institutional Service Shares, all of which was paid to financial
institutions.
Custodian and Portfolio Recordkeeper. State Street Bank and Trust
Company, Boston, MA, is custodian for the securities and cash of the
Fund. Federated Services Company also provides certain accounting and
recordkeeping services with respect to the Fund's portfolio investments.
Transfer Agent. As transfer agent, Federated Services Company maintains
all necessary shareholder records. For its services, the transfer agent
receives a fee based on the size, type and number of accounts and
transactions made by shareholders.
DETERMINING NET ASSET VALUE
The Trustees have decided that the best method for determining the value
of portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for
amortization of premium or accumulation of discount rather than at
current market value. Accordingly, neither the amount of daily income
nor the net asset value is affected by any unrealized appreciation or
depreciation of the portfolio. In periods of declining interest rates,
the indicated daily yield on shares of the Fund computed by dividing the
annualized daily income on the Fund's portfolio by the net asset value
computed as above may tend to be higher than a similar computation made
by using a method of valuation based upon market prices and estimates.
In periods of rising interest rates, the opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio
instruments depends on its compliance with certain conditions in Rule 2a-
7 (the "Rule") promulgated by the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended. Under the Rule,
the Trustees must establish procedures reasonably designed to stabilize
the net asset value per share, as computed for purposes of distribution
and redemption, at $1.00 per share, taking into account current market
conditions and the Fund's investment objective. The procedures include
monitoring the relationship between the amortized cost value per share
and the net asset value per share based upon available indications of
market value. The Trustees will decide what, if any, steps should be
taken if there is a difference of more than 0.5 of 1% between the two
values. The Trustees will take any steps they consider appropriate (such
as redemption in kind or shortening the average portfolio maturity) to
minimize any material dilution or other unfair results arising from
differences between the two methods of determining net asset value.
REDEMPTION IN KIND
The Fund is obligated to redeem shares solely in cash up to $250,000 or
1% of the Fund's net asset value, whichever is less, for any one
shareholder within a 90-day period. Any redemption beyond this amount
will also be in cash unless the Trustees determine that further payments
should be in kind. In such cases, the Fund will pay all or a portion of
the remainder of the redemption in portfolio instruments valued in the
same way as the Fund determines net asset value. The portfolio
instruments will be selected in a manner that the Trustees deem fair and
equitable. Redemption in kind is not as liquid as a cash redemption. If
redemption is made in kind, shareholders who sell these securities could
receive less than the redemption value and could incur certain
transaction costs.
THE FUND'S TAX STATUS
To qualify for the special tax treatment afforded to regulated
investment companies, the Fund must, among other requirements: derive at
least 90% of its gross income from dividends, interest, and gains from
the sale of securities; derive less than 30% of its gross income from
the sale of securities held less than three months; invest in securities
within certain statutory limits; and distribute to its shareholders at
least 90% of its net income earned during the year.
PERFORMANCE INFORMATION
Performance depends upon such variables as: portfolio quality; average
portfolio maturity; type of instruments in which the portfolio is
invested; changes in interest rates; changes in expenses; and the
relative amount of cash flow. To the extent that financial institutions
and broker/dealers charge fees in connection with services provided in
conjunction with an investment in shares of the Fund, the performance
will be reduced for those shareholders paying those fees.
YIELD
The yield is calculated based upon the seven days ending on the day of
the calculation, called the "base period." This yield is computed by:
determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net
change excluding capital changes but including the value of any
additional shares purchased with dividends earned from the original one
share and all dividends declared on the original and any purchased
shares; dividing the net change in the account's value by the value of
the account at the beginning of the base period to determine the base
period return; and multiplying the base period return by 365/7.
For the seven-day period ended July 31, 1995, the yield for
Institutional Shares was 5.72%. For the seven-day period ended July 31,
1995, the yield for Institutional Service Shares was 5.47%.
EFFECTIVE YIELD
The effective yield is calculated by compounding the unannualized base
period return by: adding 1 to the base period return; raising the sum to
the 365/7th power; and subtracting 1 from the result.
For the seven-day period ended July 31, 1995, the effective yield for
Institutional Shares was 5.88%. For the seven-day period ended July 31,
1995, the effective yield for Institutional Service Shares was 5.62%.
TOTAL RETURN
Average annual total return is the average compounded rate of return for
a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value
is computed by multiplying the number of shares owned at the end of the
period by the net asset value per share at the end of the period. The
number of shares owned at the end of the period is based on the number
of shares purchased at the beginning of the period with $1,000, adjusted
over the period by any additional shares, assuming the monthly
reinvestment of all dividends and distributions.
For the one-year period ended July 31, 1995, the average annual total
return was 5.31% for Institutional Service Shares.
Prior to the creation of separate classes of shares, for the one-year
and five-year periods ended July 31,1995 and for the period from March
30, 1990 (start of performance) to July 31, 1995, the average annual
total returns were 5.57%, 4.81%, and 5.04%, respectively, for
Institutional Shares.
PERFORMANCE COMPARISONS
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance,
investors should consider all relevant factors such as the composition
of any index used, prevailing market conditions, portfolio compositions
of other funds, and methods used to value portfolio securities and
compute offering price. The financial publications and/or indices which
the Fund uses in advertising may include:
O LIPPER ANALYTICAL SERVICES, INC., ranks funds in various fund
categories based on total return, which assumes the reinvestment
of all income dividends and capital gains distributions, if any.
o DONOGHUE'S MONEY FUND REPORT publishes annualized yields of money
market funds weekly. Donoghue's MONEY MARKET INSIGHT publication
reports monthly and 12-month-to-date investment results for the
same money funds.
o MONEY, a monthly magazine, regularly ranks money market funds in
various categories based on the latest available seven-day
effective yield.
o SALOMON 30-DAY CD INDEX compares rate levels of 30-day
certificates of deposit from the top ten prime representative
banks.
o SALOMON 30-DAY TREASURY BILL INDEX is a weekly quote of the most
representative yields for selected securities, issued by the U.S.
Treasury, maturing in 30 days.
o DISCOUNT CORPORATION OF NEW YORK 30-DAY FEDERAL AGENCIES is a
weekly quote of the average daily offering price for selected
federal agency issues maturing in 30 days.
ABOUT FEDERATED INVESTORS
Federated is dedicated to meeting investor needs which is reflected in
its investment decision making structured, straightforward, and
consistent. This has resulted in a history of competitive performance
with a range of competitive investment products that have gained the
confidence of thousands of clients and their customers.
The company's disciplined security selection process is firmly rooted in
sound methodologies backed by fundamental and technical research.
Investment decisions are made and executed by teams of portfolio
managers, analysts, and traders dedicated to specific market sectors.
In the money market sector, Federated gained prominence in the mutual
fund industry in 1974 with the creation of the first institutional money
market fund. Simultaneously, the company pioneered the use of the
amortized cost method of accounting for valuing shares of money market
funds, a principal means used by money managers today to value money
market fund shares. Other innovations include the first institutional
tax-free money market fund. As of December 31, 1994, Federated managed
more than $31 billion in assets across approximately 43 money market
funds, including 17 government, 8 prime and 18 municipal with assets
approximating $17 billion, $7.4 billion and $6.6 billion, respectively.
J. Thomas Madden, Executive Vice President, oversees Federated's equity
and high yield corporate bond management while William D. Dawson,
Executive Vice President, oversees Federated's domestic fixed income
management. Henry A. Frantzen, Executive Vice President, oversees the
management of Federated's international portfolios.
MUTUAL FUND MARKET
Twenty-seven percent of American households are pursuing their financial
goals through mutual funds. These investors, as well as businesses and
institutions, have entrusted over $2 trillion to the more than 5,500
funds available.*
Federated Investors, through its subsidiaries, distributes mutual funds
for a variety of investment applications. Specific markets include:
INSTITUTIONAL
Federated meets the needs of more than 4,000 institutional clients
nationwide by managing and servicing separate accounts and mutual funds
for a variety of applications, including defined benefit and defined
contribution programs, cash management, and asset/liability management.
Institutional clients include corporations, pension funds, tax-exempt
entities, foundations/endowments, insurance companies, and investment
and financial advisors. The marketing effort to these institutional
clients is headed by John B. Fisher, President, Institutional Sales
Division.
TRUST ORGANIZATIONS
Other institutional clients include close relationships with more than
1,500 banks and trust organizations. Virtually all of the trust
divisions of the top 100 bank holding companies use Federated funds in
their clients' portfolios. The marketing effort to trust clients is
headed by Mark R. Gensheimer, Executive Vice President, Bank Marketing &
Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated mutual funds are available to consumers through major
brokerage firms nationwide including 200 New York Stock Exchange
firms supported by more wholesalers than any other mutual fund
distributor. The marketing effort to these firms is headed by James F.
Getz, President, Broker/Dealer Division.
*Source: Investment Company Institute
Cusip 60934N104
Cusip 60934N807
9110204B (9/95)
PRIME OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST )
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
Combined Statement of Additional Information
This Combined Statement of Additional Information should be read
with the prospectuses of Prime Obligations Fund (the "Fund"), a
portfolio of Money Market Obligations Trust (the "Trust") dated
September 30, 1995. This Statement is not a prospectus. To receive
a copy of a prospectus, write or call the Fund.
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Statement dated September 30, 1995
Federated Securities Corp.
Distributor
A subsidiary of
Federated Investors
INVESTMENT POLICIES 1
Bank Instruments 1
When-Issued and Delayed
Delivery Transactions 1
Repurchase Agreements 1
Reverse Repurchase Agreements 1
U.S. Government Securities 1
Lending of Portfolio Securities 2
INVESTMENT LIMITATIONS 2
BROKERAGE TRANSACTIONS 3
MONEY MARKET OBLIGATIONS TRUST
MANAGEMENT 4
Share Ownership 8
Trustees Compensation 8
Trustee Liability 9
INVESTMENT ADVISORY SERVICES 9
Investment Adviser 9
Advisory Fees 9
FUND ADMINISTRATION 10
SHAREHOLDER SERVICES AGREEMENT 10
DETERMINING NET ASSET VALUE 10
REDEMPTION IN KIND 11
THE FUND'S TAX STATUS 11
PERFORMANCE INFORMATION 11
Yield 11
Effective Yield 11
Total Return 11
Performance Comparisons 12
ABOUT FEDERATED INVESTORS 12
Mutual Fund Market 12
Institutional 12
Trust Organizations 13
Broker/Dealers and
Bank Broker/Dealer
Subsidiaries 13
INVESTMENT POLICIES
Unless indicated otherwise, the policies described below may be changed
by the Board of Trustees without shareholder approval. Shareholders will
be notified before any material change in these policies becomes
effective.
BANK INSTRUMENTS
The instruments of banks and savings and loans whose deposits are
insured by the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF"), such as certificates of deposit, demand and
time deposits, savings shares, and bankers' acceptances, are not
necessarily guaranteed by those organizations. In addition to domestic
bank instruments, the Fund may invest in: Eurodollar Certificates of
Deposit issued by foreign branches of U.S. or foreign banks; Eurodollar
Time Deposits, which are U.S. dollar-denominated deposits in foreign
branches of U.S. or foreign banks; Canadian Time Deposits, which are
U.S. dollar-denominated deposits issued by branches of major Canadian
banks located in the United States; and Yankee Certificates of Deposit,
which are U.S. dollar-denominated certificates of deposit issued by U.S.
branches of foreign banks and held in the United States.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. No fees or other expenses,
other than normal transaction costs, are incurred. However, liquid
assets of the Fund sufficient to make payment for the securities to be
purchased are segregated on the Fund's records at the trade date. These
assets are marked to market daily and are maintained until the
transaction has been settled. The Fund does not intend to engage in when-
issued and delayed delivery transactions to an extent that would cause
the segregation of more than 20% of the total value of its assets.
REPURCHASE AGREEMENTS
The Fund or its custodian will take possession of the securities subject
to repurchase agreements, and these securities will be marked to market
daily. In the event that a defaulting seller filed for bankruptcy or
became insolvent, disposition of such securities by the Fund might be
delayed pending court action. The Fund believes that under the regular
procedures normally in effect for custody of the Fund's portfolio
securities subject to repurchase agreements, a court of competent
jurisdiction would rule in favor of the Fund and allow retention or
disposition of such securities. The Fund will only enter into repurchase
agreements with banks and other recognized financial institutions, such
as broker/dealers, which are deemed by the Fund's adviser to be
creditworthy pursuant to guidelines established by the Trustees.
REVERSE REPURCHASE AGREEMENTS
The Fund may also enter into reverse repurchase agreements. These
transactions are similar to borrowing cash. In a reverse repurchase
agreement, the Fund transfers possession of a portfolio instrument in
return for a percentage of the instrument's market value in cash and
agrees that on a stipulated date in the future the Fund will repurchase
the portfolio instrument by remitting the original consideration plus
interest at an agreed upon rate. The use of reverse repurchase
agreements may enable the Fund to avoid selling portfolio instruments at
a time when a sale may be deemed to be disadvantageous, but does not
ensure this result. When effecting reverse repurchase agreements, liquid
assets of the Fund, in a dollar amount sufficient to make payment for
the obligations to be purchased, are: segregated on the Fund's records
at the trade date; marked to market daily; and maintained until the
transaction is settled.
U.S. GOVERNMENT SECURITIES
The types of U.S. government securities in which the Fund may invest
generally include direct obligations of the U.S. Treasury (such as U.S.
Treasury bills, notes, and bonds) and obligations issued or guaranteed
by U.S. government agencies or instrumentalities. These securities are
backed by:
o the full faith and credit of the U.S. Treasury;
o the issuer's right to borrow from the U.S. Treasury;
o the discretionary authority of the U.S. government to purchase
certain obligations of agencies or instrumentalities; or
o the credit of the agency or instrumentality issuing the
obligations.
LENDING OF PORTFOLIO SECURITIES
The collateral received when the Fund lends portfolio securities must be
valued daily and, should the market value of the loaned securities
increase, the borrower must furnish additional collateral to the Fund.
During the time portfolio securities are on loan, the borrower pays the
Fund any dividends or interest paid on such securities. Loans are
subject to termination at the option of the Fund or the borrower. The
Fund may pay reasonable administrative and custodial fees in connection
with a loan and may pay a negotiated portion of the interest earned on
the cash or equivalent collateral to the borrower or placing broker.
INVESTMENT LIMITATIONS
Selling Short and Buying on Margin
The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as may be
necessary for clearance of transactions.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities except that the Fund may
borrow money directly or through reverse repurchase agreements in
amounts up to one-third of the value of its total assets, including
the amounts borrowed.
The Fund will not borrow money or engage in reverse repurchase
agreements for investment leverage, but rather as a temporary,
extraordinary, or emergency measure or to facilitate management of
the portfolio by enabling the Fund to meet redemption requests when
the liquidation of portfolio securities is deemed to be inconvenient
or disadvantageous. The Fund will not purchase any securities while
borrowings in excess of 5% of the value of its total assets are
outstanding. During the period any reverse repurchase agreements are
outstanding, the Fund will restrict the purchase of portfolio
securities to money market instruments maturing on or before the
expiration date of the reverse repurchase agreements, but only to the
extent necessary to assure completion of the reverse repurchase
agreements.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets except
to secure permitted borrowings. In those cases, it may pledge assets
having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of total assets of the Fund at the time
of the pledge.
Lending Cash or Securities
The Fund will not lend any of its assets, except portfolio
securities. This shall not prevent the Fund from purchasing or
holding bonds, debentures, notes, certificates of indebtedness or
other debt securities, entering into repurchase agreements, or
engaging in other transactions where permitted by its investment
objective, policies, and limitations or Declaration of Trust.
Investing in Commodities and Real Estate
The Fund will not purchase or sell commodities, commodity contracts,
or commodity futures contracts. The Fund will not purchase or sell
real estate, although it may invest in securities of issuers whose
business involves the purchase or sale of real estate or in
securities which are secured by real estate or interests in real
estate.
Underwriting
The Fund will not underwrite any issue of securities, except as it
may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its
investment objective, policies, and limitations.
Concentration of Investments
The Fund will not invest 25% or more of the value of its total assets
in any one industry, except that the Fund will generally invest 25%
or more of the value of its total assets in the commercial paper
issued by finance companies. The Fund may invest 25% or more of the
value of its total assets in cash or cash items, securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities
or instruments secured by these money market instruments, such as
repurchase agreements.
Diversification of Investments
With respect to 75% of the value of its total assets, the Fund will
not purchase securities issued by any one issuer (other than cash,
cash items, or securities issued or guaranteed by the government of
the United States or its agencies or instrumentalities and repurchase
agreements collateralized by such securities) if as a result more
than 5% of the value of its total assets would be invested in the
securities of that issuer.
Investing in Restricted Securities
The Fund will not invest more than 10% of the value of its net assets
in securities which are subject to legal or contractual restrictions
on resale, except for commercial paper issued under Section 4 (2) of
the Securities Act of 1933.
The above limitations cannot be changed without shareholder approval.
The following investment limitations, however, may be changed by the
Trustees without shareholder approval. Shareholders will be notified
before any material change in these limitations becomes effective.
Investing in Illiquid Securities
The Fund will not invest more than 10% of the value of its net assets
in illiquid securities.
Investing in Securities of Other Investment Companies
The Fund will not purchase securities of other investment companies,
except as part of a merger, consolidation, or other acquisition.
Investing in New Issuers
The Fund will not invest more than 5% of the value of its total
assets in securities of issuers which have records of less than three
years of continuous operations, including the operation of any
predecessor.
Investing for Control
The Fund will not invest in securities of a company for the purpose
of exercising control or management.
Investing in Issuers Whose Securities are Owned by Officers of the Trust
The Fund will not purchase or retain the securities of any issuer if
the Officers and Trustees of the Trust or the Fund's investment
adviser owning individually more than .50 of 1% of the issuer's
securities together own more than 5% of the issuer's securities.
Investing in Options
The Fund will not invest in puts, calls, straddles, spreads, or any
combination of them.
Investing in Minerals
The Fund will not purchase or sell interests in oil, gas, or other
mineral exploration or development programs or leases, although it
may purchase the securities of issuers which invest in or sponsor
such programs.
For purposes of the above limitations, the Fund considers certificates
of deposit and demand and time deposits issued by a U.S. branch of a
domestic bank or savings and loan having capital, surplus, and undivided
profits in excess of $100,000,000 at the time of investment to be "cash
items." Except with respect to borrowing money, if a percentage
limitation is adhered to at the time of investment, a later increase or
decrease in percentage resulting from any change in value or net assets
will not result in a violation of such limitation.
The Fund did not borrow money or pledge securities in excess of 5% of
the value of its net assets during the last fiscal year and has no
present intent to do so during the coming fiscal year.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the
order at a favorable price. In working with dealers, the adviser will
generally use those who are recognized dealers in specific portfolio
instruments, except when a better price and execution of the order can
be obtained elsewhere. The adviser makes decisions on portfolio
transactions and selects brokers and dealers subject to guidelines
established by the Board of Trustees. The adviser may select brokers and
dealers who offer brokerage and research services. These services may be
furnished directly to the Fund or to the adviser and may include: advice
as to the advisability of investing in securities; security analysis and
reports; economic studies; industry studies; receipt of quotations for
portfolio evaluations; and similar services. Research services provided
by brokers and dealers may be used by the adviser or its affiliates in
advising the Fund and other accounts. To the extent that receipt of
these services may supplant services for which the adviser or its
affiliates might otherwise have paid, it would tend to reduce their
expenses. The adviser and its affiliates exercise reasonable business
judgment in selecting brokers who offer brokerage and research services
to execute securities transactions. They determine in good faith that
commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided. During the
fiscal years ended July 31, 1995, 1994, and 1993 the Fund paid no
brokerage commissions.
Although investment decisions for the Fund are made independently from
those of the other accounts managed by the adviser, investments of the
type the Fund may make may also be made by those other accounts. When
the Fund and one or more other accounts managed by the adviser are
prepared to invest in, or desire to dispose of, the same security,
available investments or opportunities for sales will be allocated in a
manner believed by the adviser to be equitable to each. In some cases,
this procedure may adversely affect the price paid or received by the
Fund or the size of the position obtained or disposed of by the Fund. In
other cases, however, it is believed that coordination and the ability
to participate in volume transactions will be to the benefit of the
Fund.
MONEY MARKET OBLIGATIONS TRUST MANAGEMENT
Officers and Trustees are listed with their addresses, birthdates,
present positions with Money Market Obligations Trust, and principal
occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp. and Federated Global Research Corp.; Chairman, Passport
Research, Ltd.; Chief Executive Officer and Director, Trustee, or
Managing General Partner of the Funds. Mr. Donahue is the father of J.
Christopher Donahue, President and Trustee of the Trust.
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's
Hospital of Pittsburgh; Director, Trustee, or Managing General Partner
of the Funds; formerly, Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President,
John R. Wood and Associates, Inc., Realtors; President, Northgate
Village Development Corporation; Partner or Trustee in private real
estate ventures in Southwest Florida; Director, Trustee, or Managing
General Partner of the Funds; formerly, President, Naples Property
Management, Inc.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and
Director, Ryan Homes, Inc.
J. Christopher Donahue *
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
President and Trustee
President and Trustee, Federated Investors, Federated Advisers,
Federated Management, and Federated Research; President and Director,
Federated Research Corp. and Federated Global Research Corp.; President,
Passport Research, Ltd.; Trustee, Federated Administrative Services,
Federated Services Company, and Federated Shareholder Services;
President or Vice President of the Funds; Director, Trustee, or Managing
General Partner of some of the Funds. Mr. Donahue is the son of John F.
Donahue, Chairman and Trustee of the Trust.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine and Member, Board of Trustees, University of
Pittsburgh; Medical Director, University of Pittsburgh Medical Center -
Downtown; Member, Board of Directors, University of Pittsburgh Medical
Center; formerly, Hematologist, Oncologist, and Internist, Presbyterian
and Montefiore Hospitals; Director, Trustee, or Managing General Partner
of the Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty;
Director, Eat'N Park Restaurants, Inc., and Statewide Settlement Agency,
Inc.; Director, Trustee, or Managing General Partner of the Funds;
formerly, Counsel, Horizon Financial, F.A., Western Region.
Peter E. Madden
70 Westcliff Road
Westin, MA
Birthdate: March 16, 1942
Trustee
Consultant; State Representative, Commonwealth of Massachusetts;
Director, Trustee, or Managing General Partner of the Funds; formerly,
President, State Street Bank and Trust Company and State Street Boston
Corporation.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney-at-law; Partner, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
o
of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics and Management Consultant; Trustee,
Carnegie Endowment for International Peace, RAND Corporation, Online
Computer Library Center, Inc., and U.S. Space Foundation; Chairman,
Czecho Management Center; Director, Trustee, or Managing General Partner
of the Funds; President Emeritus, University of Pittsburgh; founding
Chairman, National Advisory Council for Environmental Policy and
Technology and Federal Emergency Management Advisory Board.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/marketing consultant; Conference Coordinator, Non-
profit entities; Director, Trustee, or Managing General Partner of the
Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of
some of the Funds; Director or Trustee of some of the Funds.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice
President, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., Federated Global Research Corp., and Passport
Research, Ltd.; Executive Vice President and Director, Federated
Securities Corp.; Trustee, Federated Services Company; Chairman,
Treasurer, and Trustee, Federated Administrative Services; Trustee or
Director of some of the Funds; Executive Vice President and Treasurer of
the Funds.
David M. Taylor
Federated Investors Tower
Pittsburgh, PA
Birthdate: January 13, 1947
Treasurer
Senior Vice President, Controller, and Trustee, Federated Investors;
Controller, Federated Advisers, Federated Management, Federated
Research, Federated Research Corp., and Passport Research, Ltd.; Vice
President, Federated Shareholder Services; Senior Vice President,
Federated Administrative Services; Treasurer of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Vice President, Secretary, General Counsel, and Trustee, Federated
Investors; Trustee, Federated Advisers, Federated Management, and
Federated Research; Director, Federated Research Corp. and Federated
Global Research Corp.; Trustee, Federated Services Company; Executive
Vice President, Secretary, and Trustee, Federated Administrative
Services; President and Trustee, Federated Shareholder Services;
Director, Federated Securities Corp.; Executive Vice President and
Secretary of the Funds.
* This Trustee is deemed to be an "interested person" as defined
in the Investment Company Act of 1940, as amended.
@ Member of the Executive Committee. The Executive Committee of
the Board of Trustees handles the responsibilities of the Board
of Trustees between meetings of the Board.
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; Automated Government Money Trust; Blanchard Funds;
Blanchard Precious Metals, Inc.; Cash Trust Series II; Cash Trust
Series, Inc.; DG Investor Series; Edward D. Jones & Co. Daily Passport
Cash Trust; Federated ARMs Fund; Federated Equity Funds; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated High Yield Trust; Federated Income Securities Trust; Federated
Income Trust; Federated Index Trust; Federated Institutional Trust;
Federated Master Trust; Federated Municipal Trust; Federated Short-Term
Municipal Trust; Federated Short-Term U.S. Government Trust; Federated
Stock Trust; Federated Tax-Free Trust; Federated Total Return Series,
Inc.; Federated U.S. Government Bond Fund; Federated U.S. Government
Securities Fund: 1-3 Years; Federated U.S, Government Securities Fund: 3-
5 Years; First Priority Funds; Fixed Income Securities, Inc.; Fortress
Adjustable Rate U.S. Government Fund, Inc.; Fortress Municipal Income
Fund, Inc.; Fortress Utility Fund, Inc.; Fund for U.S. Government
Securities, Inc.; Government Income Securities, Inc.; High Yield Cash
Trust;; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond
Fund, Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S.
Government Money Market Trust; Liberty Term Trust, Inc. - 1999; Liberty
Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust; Money
Market Management, Inc.; Money Market Obligations Trust; Money Market
Trust; Municipal Securities Income Trust; Newpoint Funds; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Star Funds; The Starburst Funds; The Starburst Funds II;
Stock and Bond Fund, Inc.; Sunburst Funds; Targeted Duration Trust; Tax-
Free Instruments Trust; Trust for Financial Institutions; Trust For
Government Cash Reserves; Trust for Short-Term U.S. Government
Securities; Trust for U.S. Treasury Obligations; The Virtus Funds; World
Investment Series, Inc.
SHARE OWNERSHIP
Officers and Trustees as a group own less than 1% of the Fund's
outstanding shares.
As of September 6, 1995, the following shareholders of record owned 5%
or more of the outstanding Institutional Shares of the Fund: Anderson &
Co., Philadelphia, PA, owned approximately 23,680,952 shares (5.77%);
and Peoples Bank, Bridgeport, CT, owned approximately 149,257,858 shares
(36.35%).
As of September 6, 1995, the following shareholders of record owned 5%
or more of the outstanding Institutional Service Shares of the Fund:
Society National Bank, Cleveland, OH, owned approximately 174,935,737
shares (6.34%); and Var & Co., St. Paul, MN, owned approximately
252,541,288 shares (9.15%).
TRUSTEES COMPENSATION
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST*# FROM FUND COMPLEX +
John F. Donahue $0 $0 for the Trust and
Chairman and Trustee 68 other investment companies in the
Fund Complex
Thomas G. Bigley $0 $20,688 for the Trust and
Trustee 49 other investment companies in the
Fund Complex
John T. Conroy, Jr. $6,147 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
William J. Copeland $6,147 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
J. Christopher Donahue $0 $0 for the Trust and
President and Trustee 14 other investment companies in the
Fund Complex
James E. Dowd $6,147 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Lawrence D. Ellis, M.D. $5,449 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Edward L. Flaherty, Jr. $6,147 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Peter E. Madden $5,449 $90,563 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Gregor F. Meyer $5,449 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
John E. Murray, Jr., $0 $0 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Wesley W. Posvar $5,449 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Marjorie P. Smuts $5,449 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
*Information is furnished for the fiscal year ended July 31, 1994.
#The aggregate compensation is provided for the Trust which is comprised
of six portfolios.
+The information is provided for the last calendar year.
TRUSTEE LIABILITY
The Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of their
office.
INVESTMENT ADVISORY SERVICES
INVESTMENT ADVISER
The Fund's investment adviser is Federated Management. It is a
subsidiary of Federated Investors. All the voting securities of
Federated Investors are owned by a trust, the trustees of which are John
F. Donahue, his wife and his son, J. Christopher Donahue.
The adviser shall not be liable to the Trust, the Fund, or any
shareholder of the Fund for any losses that may be sustained in the
purchase, holding, or sale of any security or for anything done or
omitted by it, except acts or omissions involving willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties imposed
upon it by its contract with the Trust.
ADVISORY FEES
For its advisory services, Federated Management receives an annual
investment advisory fee as described in the prospectus. For the fiscal
years ended July 31, 1995, 1994 and 1993, the adviser earned $4,370,903,
$2,368,688, and $2,033,502, respectively, of which $2,828,160,
$1,615,921, and $955,268, respectively, were waived.
State Expense Limitations
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose
shares are registered for sale in those states. If the Fund's
normal operating expenses (including the investment advisory fee,
but not including brokerage commissions, interest, taxes, and
extraordinary expenses) exceed 2-1/2% per year of the first $30
million of average net assets, 2% per year of the next $70 million
of average net assets, and 1-1/2% per year of the remaining
average net assets, the adviser will reimburse the Fund for its
expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by
the amount of the excess, subject to an annual adjustment. If the
expense limitation is exceeded, the amount to be reimbursed by the
adviser will be limited, in any single fiscal year, by the amount
of the investment advisory fees.
This arrangement is not part of the advisory contract and may be
amended or rescinded in the future.
FUND ADMINISTRATION
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Fund for a fee as
described in the prospectus. Prior to March 1, 1994, Federated
Administrative Services, Inc., also a subsidiary of Federated Investors,
served as the Fund's Administrator. (For purposes of this Statement of
Additional Information, Federated Administrative Services and Federated
Administrative Services, Inc. may hereinafter collectively be referred
to as the "Administrators".) For the fiscal year ended July 31, 1995,
Federated Administrative Services earned $1,654,387. For the fiscal year
ended July 31, 1994, the Administrators collectively earned $762,145.
For the fiscal year ended July 31, 1993, Federated Administrative
Services, Inc., earned $455,288. Dr. Henry J. Gailliot, an officer of
Federated Management, the adviser to the Fund, holds approximately 20%
of the outstanding common stock and serves as a director of Commercial
Data Services, Inc., a company which provides computer processing
services to Federated Administrative Services.
SHAREHOLDER SERVICES AGREEMENT
This arrangement permits the payment of fees to Federated Shareholder
Services and financial institutions to cause services to be provided
which are necessary for the maintenance of shareholder accounts and to
encourage personal services to shareholders by a representative who has
knowledge of the shareholder's particular circumstances and goals. These
activities and services may include, but are not limited to: providing
office space, equipment, telephone facilities, and various clerical,
supervisory, computer, and other personnel as necessary or beneficial to
establish and maintain shareholder accounts and records; processing
purchase and redemption transactions and automatic investments of client
account cash balances; answering routine client inquiries; and assisting
clients in changing dividend options, account designations, and
addresses. By adopting the Shareholder Services Agreement, the Board of
Trustees expects that the Fund will benefit by: (1) providing personal
services to shareholders; (2) investing shareholder assets with a
minimum of delay and administrative detail; (3) enhancing shareholder
recordkeeping systems; and (4) responding promptly to shareholders'
requests and inquiries concerning their accounts. For the fiscal period
ending July 31, 1995, the Fund paid shareholder service fees in the
amount of $554,723 pursuant to the Shareholder Services Plan on behalf
of Institutional Service Shares, all of which was paid to financial
institutions.
Custodian and Portfolio Recordkeeper. State Street Bank and Trust
Company, Boston, MA, is custodian for the securities and cash of the
Fund. Federated Services Company also provides certain accounting and
recordkeeping services with respect to the Fund's portfolio investments.
Transfer Agent. As transfer agent, Federated Services Company maintains
all necessary shareholder records. For its services, the transfer agent
receives a fee based on the size, type and number of accounts and
transactions made by shareholders.
DETERMINING NET ASSET VALUE
The Trustees have decided that the best method for determining the value
of portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for
amortization of premium or accumulation of discount rather than at
current market value. Accordingly, neither the amount of daily income
nor the net asset value is affected by any unrealized appreciation or
depreciation of the portfolio. In periods of declining interest rates,
the indicated daily yield on shares of the Fund computed by dividing the
annualized daily income on the Fund's portfolio by the net asset value
computed as above may tend to be higher than a similar computation made
by using a method of valuation based upon market prices and estimates.
In periods of rising interest rates, the opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio
instruments depends on its compliance with certain conditions in Rule 2a-
7 (the "Rule") promulgated by the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended. Under the Rule,
the Trustees must establish procedures reasonably designed to stabilize
the net asset value per share, as computed for purposes of distribution
and redemption, at $1.00 per share, taking into account current market
conditions and the Fund's investment objective. The procedures include
monitoring the relationship between the amortized cost value per share
and the net asset value per share based upon available indications of
market value. The Trustees will decide what, if any, steps should be
taken if there is a difference of more than 0.5 of 1% between the two
values. The Trustees will take any steps they consider appropriate (such
as redemption in kind or shortening the average portfolio maturity) to
minimize any material dilution or other unfair results arising from
differences between the two methods of determining net asset value.
REDEMPTION IN KIND
The Fund is obligated to redeem shares solely in cash up to $250,000 or
1% of the Fund's net asset value, whichever is less, for any one
shareholder within a 90-day period. Any redemption beyond this amount
will also be in cash unless the Trustees determine that further payments
should be in kind. In such cases, the Fund will pay all or a portion of
the remainder of the redemption in portfolio instruments valued in the
same way as the Fund determines net asset value. The portfolio
instruments will be selected in a manner that the Trustees deem fair and
equitable. Redemption in kind is not as liquid as a cash redemption. If
redemption is made in kind, shareholders who sell these securities could
receive less than the redemption value and could incur certain
transaction costs.
THE FUND'S TAX STATUS
To qualify for the special tax treatment afforded to regulated
investment companies, the Fund must, among other requirements: derive at
least 90% of its gross income from dividends, interest, and gains from
the sale of securities; derive less than 30% of its gross income from
the sale of securities held less than three months; invest in securities
within certain statutory limits; and distribute to its shareholders at
least 90% of its net income earned during the year.
PERFORMANCE INFORMATION
Performance depends upon such variables as: portfolio quality; average
portfolio maturity; type of instruments in which the portfolio is
invested; changes in interest rates; changes in expenses; and the
relative amount of cash flow. To the extent that financial institutions
and broker/dealers charge fees in connection with services provided in
conjunction with an investment in shares of the Fund, the performance
will be reduced for those shareholders paying those fees.
YIELD
The yield is calculated based upon the seven days ending on the day of
the calculation, called the "base period." This yield is computed by:
determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net
change excluding capital changes but including the value of any
additional shares purchased with dividends earned from the original one
share and all dividends declared on the original and any purchased
shares; dividing the net change in the account's value by the value of
the account at the beginning of the base period to determine the base
period return; and multiplying the base period return by 365/7.
For the seven-day period ended July 31, 1995, the yield for
Institutional Shares was 5.76%. For the seven-day period ended July 31,
1995, the yield for Institutional Service Shares was 5.51%.
EFFECTIVE YIELD
The effective yield is calculated by compounding the unannualized base
period return by: adding 1 to the base period return; raising the sum to
the 365/7th power; and subtracting 1 from the result.
For the seven-day period ended July 31, 1995, the effective yield for
Institutional Shares was 5.92%. For the seven-day period ended July 31,
1995, the effective yield for Institutional Service Shares was 5.66%.
TOTAL RETURN
Average annual total return is the average compounded rate of return for
a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value
is computed by multiplying the number of shares owned at the end of the
period by the net asset value per share at the end of the period. The
number of shares owned at the end of the period is based on the number
of shares purchased at the beginning of the period with $1,000, adjusted
over the period by any additional shares, assuming the monthly
reinvestment of all dividends and distributions.
For the one-year period ended July 31, 1995 and for the period from July
5, 1994 (date of initial public offering) through July 31, 1995, the
average annual total returns were 5.38% and 5.31%, respectively, for
Institutional Service Shares.
Prior to the creation of separate classes of shares, for the one-year
and five-year periods ended July 31,1995 and for the period from May 26,
1990 (start of performance) to July 31, 1995, the average annual total
returns were 5.65%, 4.87%, and 5.10%, respectively, for Institutional
Shares.
PERFORMANCE COMPARISONS
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance,
investors should consider all relevant factors such as the composition
of any index used, prevailing market conditions, portfolio compositions
of other funds, and methods used to value portfolio securities and
compute offering price. The financial publications and/or indices which
the Fund uses in advertising may include:
O LIPPER ANALYTICAL SERVICES, INC., ranks funds in various fund
categories based on total return, which assumes the reinvestment
of all income dividends and capital gains distributions, if any.
o DONOGHUE'S MONEY FUND REPORT publishes annualized yields of money
market funds weekly. Donoghue's MONEY MARKET INSIGHT publication
reports monthly and 12-month-to-date investment results for the
same money funds.
o MONEY, a monthly magazine, regularly ranks money market funds in
various categories based on the latest available seven-day
effective yield.
o BANK RATE MONITORC NATIONAL INDEX, Miami Beach, Florida, published
weekly, is an average of the interest rates of personal money
market deposit accounts at ten of the largest banks and thrifts in
each of the five largest Standard Metropolitan Statistical Areas.
If more than one rate is offered, the lowest rate is used. Account
minimums and compounding methods may vary.
ABOUT FEDERATED INVESTORS
Federated is dedicated to meeting investor needs which is reflected in
its investment decision making structured, straightforward, and
consistent. This has resulted in a history of competitive performance
with a range of competitive investment products that have gained the
confidence of thousands of clients and their customers.
The company's disciplined security selection process is firmly rooted in
sound methodologies backed by fundamental and technical research.
Investment decisions are made and executed by teams of portfolio
managers, analysts, and traders dedicated to specific market sectors.
In the money market sector, Federated gained prominence in the mutual
fund industry in 1974 with the creation of the first institutional money
market fund. Simultaneously, the company pioneered the use of the
amortized cost method of accounting for valuing shares of money market
funds, a principal means used by money managers today to value money
market fund shares. Other innovations include the first institutional
tax-free money market fund. As of December 31, 1994, Federated managed
more than $31 billion in assets across approximately 43 money market
funds, including 17 government, 8 prime and 18 municipal with assets
approximating $17 billion, $7.4 billion and $6.6 billion, respectively.
J. Thomas Madden, Executive Vice President, oversees Federated's equity
and high yield corporate bond management while William D. Dawson,
Executive Vice President, oversees Federated's domestic fixed income
management. Henry A. Frantzen, Executive Vice President, oversees the
management of Federated's international portfolios.
MUTUAL FUND MARKET
Twenty-seven percent of American households are pursuing their financial
goals through mutual funds. These investors, as well as businesses and
institutions, have entrusted over $2 trillion to the more than 5,500
funds available.*
Federated Investors, through its subsidiaries, distributes mutual funds
for a variety of investment applications. Specific markets include:
INSTITUTIONAL
Federated meets the needs of more than 4,000 institutional clients
nationwide by managing and servicing separate accounts and mutual funds
for a variety of applications, including defined benefit and defined
contribution programs, cash management, and asset/liability management.
Institutional clients include corporations, pension funds, tax-exempt
entities, foundations/endowments, insurance companies, and investment
and financial advisors. The marketing effort to these institutional
clients is headed by John B. Fisher, President, Institutional Sales
Division.
TRUST ORGANIZATIONS
Other institutional clients include close relationships with more than
1,500 banks and trust organizations. Virtually all of the trust
divisions of the top 100 bank holding companies use Federated funds in
their clients' portfolios. The marketing effort to trust clients is
headed by Mark R. Gensheimer, Executive Vice President, Bank Marketing &
Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated mutual funds are available to consumers through major
brokerage firms nationwide including 200 New York Stock Exchange
firms supported by more wholesalers than any other mutual fund
distributor. The marketing effort to these firms is headed by James F.
Getz, President, Broker/Dealer Division.
*Source: Investment Company Institute
Cusip 60934N708
Cusip 60934N203
9110205B (9/95)
TREASURY OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST )
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
Combined Statement of Additional Information
This Combined Statement of Additional Information should be read
with the prospectuses of Treasury Obligations Fund (the "Fund"), a
portfolio of Money Market Obligations Trust (the "Trust") dated
September 30, 1995. This Statement is not a prospectus. To receive
a copy of a prospectus, write or call the Fund.
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Statement dated September 30, 1995
Federated Securities Corp.
Distributor
A subsidiary of
Federated Investors
INVESTMENT POLICIES 1
When-Issued and Delayed
Delivery Transactions 1
Repurchase Agreements 1
Lending of Portfolio Securities 1
INVESTMENT LIMITATIONS 1
BROKERAGE TRANSACTIONS 3
MONEY MARKET OBLIGATIONS TRUST
MANAGEMENT 3
Share Ownership 7
Trustees Compensation 7
Trustee Liability 8
INVESTMENT ADVISORY SERVICES 8
Investment Adviser 8
Advisory Fees 8
FUND ADMINISTRATION 9
SHAREHOLDER SERVICES AGREEMENT 9
DETERMINING NET ASSET VALUE 9
REDEMPTION IN KIND 10
THE FUND'S TAX STATUS 10
PERFORMANCE INFORMATION 10
Yield 10
Effective Yield 10
Total Return 10
Performance Comparisons 11
ABOUT FEDERATED INVESTORS 11
Mutual Fund Market 11
Institutional 12
Trust Organizations 12
Broker/Dealers and
Bank Broker/Dealer
Subsidiaries 12
INVESTMENT POLICIES
Unless indicated otherwise, the policies described below may be changed
by the Board of Trustees without shareholder approval. Shareholders will
be notified before any material change in these policies becomes
effective.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. No fees or other expenses,
other than normal transaction costs, are incurred. However, liquid
assets of the Fund sufficient to make payment for the securities to be
purchased are segregated on the Fund's records at the trade date. These
assets are marked to market daily and are maintained until the
transaction has been settled. The Fund does not intend to engage in when-
issued and delayed delivery transactions to an extent that would cause
the segregation of more than 20% of the total value of its assets.
REPURCHASE AGREEMENTS
The Fund or its custodian will take possession of the securities subject
to repurchase agreements, and these securities will be marked to market
daily. In the event that a defaulting seller filed for bankruptcy or
became insolvent, disposition of such securities by the Fund might be
delayed pending court action. The Fund believes that under the regular
procedures normally in effect for custody of the Fund's portfolio
securities subject to repurchase agreements, a court of competent
jurisdiction would rule in favor of the Fund and allow retention or
disposition of such securities. The Fund will only enter into repurchase
agreements with banks and other recognized financial institutions, such
as broker/dealers, which are deemed by the Fund's adviser to be
creditworthy pursuant to guidelines established by the Trustees.
LENDING OF PORTFOLIO SECURITIES
The collateral received when the Fund lends portfolio securities must be
valued daily and, should the market value of the loaned securities
increase, the borrower must furnish additional collateral to the Fund.
During the time portfolio securities are on loan, the borrower pays the
Fund any dividends or interest paid on such securities. Loans are
subject to termination at the option of the Fund or the borrower. The
Fund may pay reasonable administrative and custodial fees in connection
with a loan and may pay a negotiated portion of the interest earned on
the cash or equivalent collateral to the borrower or placing broker.
INVESTMENT LIMITATIONS
Selling Short and Buying on Margin
The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as are
necessary for clearance of transactions.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities except that the Fund may
borrow money in amounts up to one-third of the value of its total
assets, including the amounts borrowed.
The Fund will not borrow money for investment leverage, but rather as
a temporary, extraordinary, or emergency measure or to facilitate
management of the portfolio by enabling the Fund to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any
securities while borrowings in excess of 5% of the value of its total
assets are outstanding.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets except
as necessary to secure permitted borrowings. In those cases, it may
pledge assets having a market value not exceeding the lesser of the
dollar amounts borrowed or 15% of the value of total assets of the
Fund at the time of the pledge.
Lending Cash or Securities
The Fund will not lend any of its assets, except portfolio
securities. This shall not prevent the Fund from purchasing or
holding bonds, debentures, notes, certificates of indebtedness or
other debt securities, entering into repurchase agreements, or
engaging in other transactions where permitted by its investment
objective, policies and limitations or Declaration of Trust.
Investing in Commodities
The Fund will not purchase or sell commodities, commodity contracts,
or commodity futures contracts.
Investing in Real Estate
The Fund will not purchase or sell real estate, including limited
partnership interests.
Underwriting
The Fund will not underwrite any issue of securities, except as it
may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its
investment objective, policies, and limitations.
Concentration of Investments
The Fund will not invest 25% or more of the value of its total assets
in any one industry, except that the Fund may invest 25% or more of
the value of its total assets in cash, cash items, or securities
issued or guaranteed by the government of the United States or its
agencies, or instrumentalities and repurchase agreement
collateralized by such U.S. government securities.
Diversification of Investments
With respect to securities comprising 75% of the value of its total
assets, the Fund will not purchase securities of any one issuer
(other than cash, cash items, or securities issued or guaranteed by
the government of the United States or its agencies or
instrumentalities and repurchase agreements collateralized by such
U.S. government securities) if as a result more than 5% of the value
of its total assets would be invested in the securities of that
issuer, or if it would own more than 10% of the outstanding voting
securities of that issuer.
The above limitations cannot be changed without shareholder approval.
The following investment limitations, however, may be changed by
Trustees without shareholder approval. Shareholders will be notified
before any material change in these limitations becomes effective.
Investing in Illiquid Securities
The Fund will not invest more than 10% of the value of its net assets
in illiquid securities.
Investing in Securities of Other Investment Companies
The Fund will not purchase securities of other investment companies,
except as part of a merger, consolidation, or other acquisition.
Investing in New Issuers
The Fund will not invest more than 5% of the value of its total
assets in securities of issuers which have records of less than three
years of continuous operations, including the operation of any
predecessor.
Investing for Control
The Fund will not invest in securities of a company for the purpose
of exercising control or management.
Investing in Issuers Whose Securities are Owned by Officers of the Trust
The Fund will not purchase or retain the securities of any issuer if
the Officers and Trustees of the Trust or the Fund's investment
adviser owning individually more than .50 of 1% of the issuer's
securities together own more than 5% of the issuer's securities.
Investing in Options
The Fund will not invest in puts, calls, straddles, spreads, or any
combination of them.
Investing in Minerals
The Fund will not purchase or sell interests in oil, gas, or other
mineral exploration or development programs or leases, although it
may purchase the securities of issuers which invest in or sponsor
such programs.
For purposes of the above limitations, the Fund considers certificates
of deposit and demand and time deposits issued by a U.S. branch of a
domestic bank or savings and loan having capital, surplus, and undivided
profits in excess of $100,000,000 at the time of investment to be "cash
items." Except with respect to borrowing money, if a percentage
limitation is adhered to at the time of investment, a later increase or
decrease in percentage resulting from any change in value or net assets
will not result in a violation of such limitation.
The Fund did not borrow money or pledge securities in excess of 5% of
the value of its net assets during the last fiscal period and has not
present intent to do so during the coming fiscal year.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the
order at a favorable price. In working with dealers, the adviser will
generally use those who are recognized dealers in specific portfolio
instruments, except when a better price and execution of the order can
be obtained elsewhere. The adviser makes decisions on portfolio
transactions and selects brokers and dealers subject to guidelines
established by the Board of Trustees. The adviser may select brokers and
dealers who offer brokerage and research services. These services may be
furnished directly to the Fund or to the adviser and may include: advice
as to the advisability of investing in securities; security analysis and
reports; economic studies; industry studies; receipt of quotations for
portfolio evaluations; and similar services. Research services provided
by brokers and dealers may be used by the adviser or its affiliates in
advising the Fund and other accounts. To the extent that receipt of
these services may supplant services for which the adviser or its
affiliates might otherwise have paid, it would tend to reduce their
expenses. The adviser and its affiliates exercise reasonable business
judgment in selecting brokers who offer brokerage and research services
to execute securities transactions. They determine in good faith that
commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided. During the
fiscal years ended July 31, 1995, 1994, and 1993, the Fund paid no
brokerage commissions.
Although investment decisions for the Fund are made independently from
those of the other accounts managed by the adviser, investments of the
type the Fund may make may also be made by those other accounts. When
the Fund and one or more other accounts managed by the adviser are
prepared to invest in, or desire to dispose of, the same security,
available investments or opportunities for sales will be allocated in a
manner believed by the adviser to be equitable to each. In some cases,
this procedure may adversely affect the price paid or received by the
Fund or the size of the position obtained or disposed of by the Fund. In
other cases, however, it is believed that coordination and the ability
to participate in volume transactions will be to the benefit of the
Fund.
MONEY MARKET OBLIGATIONS TRUST MANAGEMENT
Officers and Trustees are listed with their addresses, birthdates,
present positions with Money Market Obligations Trust, and principal
occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp. and Federated Global Research Corp.; Chairman, Passport
Research, Ltd.; Chief Executive Officer and Director, Trustee, or
Managing General Partner of the Funds. Mr. Donahue is the father of J.
Christopher Donahue, President and Trustee of the Trust.
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's
Hospital of Pittsburgh; Director, Trustee, or Managing General Partner
of the Funds; formerly, Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President,
John R. Wood and Associates, Inc., Realtors; President, Northgate
Village Development Corporation; Partner or Trustee in private real
estate ventures in Southwest Florida; Director, Trustee, or Managing
General Partner of the Funds; formerly, President, Naples Property
Management, Inc.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and
Director, Ryan Homes, Inc.
J. Christopher Donahue *
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
President and Trustee
President and Trustee, Federated Investors, Federated Advisers,
Federated Management, and Federated Research; President and Director,
Federated Research Corp. and Federated Global Research Corp.; President,
Passport Research, Ltd.; Trustee, Federated Administrative Services,
Federated Services Company, and Federated Shareholder Services;
President or Vice President of the Funds; Director, Trustee, or Managing
General Partner of some of the Funds. Mr. Donahue is the son of John F.
Donahue, Chairman and Trustee of the Trust.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine and Member, Board of Trustees, University of
Pittsburgh; Medical Director, University of Pittsburgh Medical Center -
Downtown; Member, Board of Directors, University of Pittsburgh Medical
Center; formerly, Hematologist, Oncologist, and Internist, Presbyterian
and Montefiore Hospitals; Director, Trustee, or Managing General Partner
of the Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty;
Director, Eat'N Park Restaurants, Inc., and Statewide Settlement Agency,
Inc.; Director, Trustee, or Managing General Partner of the Funds;
formerly, Counsel, Horizon Financial, F.A., Western Region.
Peter E. Madden
70 Westcliff Road
Westin, MA
Birthdate: March 16, 1942
Trustee
Consultant; State Representative, Commonwealth of Massachusetts;
Director, Trustee, or Managing General Partner of the Funds; formerly,
President, State Street Bank and Trust Company and State Street Boston
Corporation.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney-at-law; Partner, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner,
Mollica, Murray and Hogue; Director, Trustee or Managing General Partner
of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics and Management Consultant; Trustee,
Carnegie Endowment for International Peace, RAND Corporation, Online
Computer Library Center, Inc., and U.S. Space Foundation; Chairman,
Czecho Management Center; Director, Trustee, or Managing General Partner
of the Funds; President Emeritus, University of Pittsburgh; founding
Chairman, National Advisory Council for Environmental Policy and
Technology and Federal Emergency Management Advisory Board.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/marketing consultant; Conference Coordinator, Non-
profit entities; Director, Trustee, or Managing General Partner of the
Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of
some of the Funds; Director or Trustee of some of the Funds.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice
President, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., Federated Global Research Corp., and Passport
Research, Ltd.; Executive Vice President and Director, Federated
Securities Corp.; Trustee, Federated Services Company; Chairman,
Treasurer, and Trustee, Federated Administrative Services; Trustee or
Director of some of the Funds; Executive Vice President and Treasurer of
the Funds.
David M. Taylor
Federated Investors Tower
Pittsburgh, PA
Birthdate: January 13, 1947
Treasurer
Federat
Federated Administrative Services; Treasurer of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Vice President, Secretary, General Counsel, and Trustee, Federated
Investors; Trustee, Federated Advisers, Federated Management, and
Federated Research; Director, Federated Research Corp. and Federated
Global Research Corp.; Trustee, Federated Services Company; Executive
Vice President, Secretary, and Trustee, Federated Administrative
Services; President and Trustee, Federated Shareholder Services;
Director, Federated Securities Corp.; Executive Vice President and
Secretary of the Funds.
* This Trustee is deemed to be an "interested person" as defined
in the Investment Company Act of 1940, as amended.
@ Member of the Executive Committee. The Executive Committee of
the Board of Trustees handles the responsibilities of the Board
of Trustees between meetings of the Board.
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; Automated Government Money Trust; Blanchard Funds;
Blanchard Precious Metals, Inc.; Cash Trust Series II; Cash Trust
Series, Inc.; DG Investor Series; Edward D. Jones & Co. Daily Passport
Cash Trust; Federated ARMs Fund; Federated Equity Funds; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated High Yield Trust; Federated Income Securities Trust; Federated
Income Trust; Federated Index Trust; Federated Institutional Trust;
Federated Master Trust; Federated Municipal Trust; Federated Short-Term
Municipal Trust; Federated Short-Term U.S. Government Trust; Federated
Stock Trust; Federated Tax-Free Trust; Federated Total Return Series,
Inc.; Federated U.S. Government Bond Fund; Federated U.S. Government
Securities Fund: 1-3 Years; Federated U.S, Government Securities Fund: 3-
5 Years; First Priority Funds; Fixed Income Securities, Inc.; Fortress
Adjustable Rate U.S. Government Fund, Inc.; Fortress Municipal Income
Fund, Inc.; Fortress Utility Fund, Inc.; Fund for U.S. Government
Securities, Inc.; Government Income Securities, Inc.; High Yield Cash
Trust;; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond
Fund, Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S.
Government Money Market Trust; Liberty Term Trust, Inc. - 1999; Liberty
Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust; Money
Market Management, Inc.; Money Market Obligations Trust; Money Market
Trust; Municipal Securities Income Trust; Newpoint Funds; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Star Funds; The Starburst Funds; The Starburst Funds II;
Stock and Bond Fund, Inc.; Sunburst Funds; Targeted Duration Trust; Tax-
Free Instruments Trust; Trust for Financial Institutions; Trust For
Government Cash Reserves; Trust for Short-Term U.S. Government
Securities; Trust for U.S. Treasury Obligations; The Virtus Funds; World
Investment Series, Inc.
SHARE OWNERSHIP
Officers and Trustees as a group own less than 1% of the Fund's
outstanding shares.
As of September 6, 1995, the following shareholders of record owned 5%
or more of the outstanding Institutional Shares of the Fund: Var & Co.,
St. Paul, MN, owned approximately 409,599,847 shares (11.60%); Society
National Bank, Cleveland, OH, owned approximately 305,195,188 shares
(8.64%); Shawmut Bank, NA, owned approximately 506,545,170 shares
(14,34%); Firstier Bank, NA, Omaha, NE, owned approximately 194,212,536
shares (5.50%); and Boatmen's Trust Company, St. Louis, MO, owned
approximately 190,419,642 shares (5.39%).
As of September 6, 1995, the following shareholders of record owned 5%
or more of the outstanding Institutional Service Shares of the Fund: M&I
Custody of Nevada Inc., Las Vegas, NV, owned approximately 62,410,210
shares (7.41%); Meba & Co., Concord, NH, owned approximately 65,085,985
shares (7.72%); Muchmore & Co., Summit, NJ, owned approximately
68,919,973 shares (8.18%); Bank IV-Kansas, Wichita, KS, owned
approximately 93,457,671 shares (11.09%); AYE Plus, New Orleans, LA,
owned approximately 51,122,750 shares (6.07%); Dai-Ichi Kangyo Bank of
CA, Los Angeles, CA, owned approximately 62,126,974 shares (7.37%); and
Integrated Process Equipment Corp. Phoenix, AZ, owned approximately
56,707,643 shares (6.73%).
TRUSTEES COMPENSATION
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST*# FROM FUND COMPLEX +
John F. Donahue $0 $0 for the Trust and
Chairman and Trustee 68 other investment companies in the
Fund Complex
Thomas G. Bigley $3,078 $20,688 for the Trust and
Trustee 49 other investment companies in the
Fund Complex
John T. Conroy, Jr. $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
William J. Copeland $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
J. Christopher Donahue $0 $0 for the Trust and
President and Trustee 14 other investment companies in the
Fund Complex
James E. Dowd $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Lawrence D. Ellis, M.D. $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Edward L. Flaherty, Jr. $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Peter E. Madden $2,978 $90,563 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Gregor F. Meyer $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
John E. Murray, Jr., $863 $0 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Wesley W. Posvar $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Marjorie P. Smuts $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
*Information is furnished for the fiscal year ended July 31, 1995.
#The aggregate compensation is provided for the Trust which is comprised
of six portfolios.
+The information is provided for the last calendar year.
TRUSTEE LIABILITY
The Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of their
office.
INVESTMENT ADVISORY SERVICES
INVESTMENT ADVISER
The Fund's investment adviser is Federated Management. It is a
subsidiary of Federated Investors. All the voting securities of
Federated Investors are owned by a trust, the trustees of which are John
F. Donahue, his wife and his son, J. Christopher Donahue.
The adviser shall not be liable to the Trust, the Fund, or any
shareholder of the Fund for any losses that may be sustained in the
purchase, holding, or sale of any security or for anything done or
omitted by it, except acts or omissions involving willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties imposed
upon it by its contract with the Trust.
ADVISORY FEES
For its advisory services, Federated Management receives an annual
investment advisory fee as described in the prospectus. For the fiscal
years ended July 31, 1995, 1994 and 1993, the adviser earned $6,522,177,
$4,939,384, and $4,583,447, respectively, of which $3,742,710,
$2,435,439, and $1,647,164, respectively, were waived.
State Expense Limitations
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose
shares are registered for sale in those states. If the Fund's
normal operating expenses (including the investment advisory fee,
but not including brokerage commissions, interest, taxes, and
extraordinary expenses) exceed 2-1/2% per year of the first $30
million of average net assets, 2% per year of the next $70 million
of average net assets, and 1-1/2% per year of the remaining
average net assets, the adviser will reimburse the Fund for its
expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by
the amount of the excess, subject to an annual adjustment. If the
expense limitation is exceeded, the amount to be reimbursed by the
adviser will be limited, in any single fiscal year, by the amount
of the investment advisory fees.
This arrangement is not part of the advisory contract and may be
amended or rescinded in the future.
FUND ADMINISTRATION
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Fund for a fee as
described in the prospectus. Prior to March 1, 1994, Federated
Administrative Services, Inc., also a subsidiary of Federated Investors,
served as the Fund's Administrator. (For purposes of this Statement of
Additional Information, Federated Administrative Services and Federated
Administrative Services, Inc. may hereinafter collectively be referred
to as the "Administrators".) For the fiscal year ended July 31, 1995,
Federated Administrative Services earned $2,468,644. For the fiscal year
ended July 31, 1994, the Administrators collectively earned $1,380,769.
For the fiscal year ended July 31, 1993, Federated Administrative
Services, Inc., earned $770,936. Dr. Henry J. Gailliot, an officer of
Federated Management, the adviser to the Fund, holds approximately 20%
of the outstanding common stock and serves as a director of Commercial
Data Services, Inc., a company which provides computer processing
services to Federated Administrative Services.
SHAREHOLDER SERVICES AGREEMENT
This arrangement permits the payment of fees to Federated Shareholder
Services and financial institutions to cause services to be provided
which are necessary for the maintenance of shareholder accounts and to
encourage personal services to shareholders by a representative who has
knowledge of the shareholder's particular circumstances and goals. These
activities and services may include, but are not limited to: providing
office space, equipment, telephone facilities, and various clerical,
supervisory, computer, and other personnel as necessary or beneficial to
establish and maintain shareholder accounts and records; processing
purchase and redemption transactions and automatic investments of client
account cash balances; answering routine client inquiries; and assisting
clients in changing dividend options, account designations, and
addresses. By adopting the Shareholder Services Agreement, the Board of
Trustees expects that the Fund will benefit by: (1) providing personal
services to shareholders; (2) investing shareholder assets with a
minimum of delay and administrative detail; (3) enhancing shareholder
recordkeeping systems; and (4) responding promptly to shareholders'
requests and inquiries concerning their accounts. For the fiscal period
ending July 31, 1995, the Fund paid shareholder service fees in the
amount of $418,181 pursuant to the Shareholder Services Plan on behalf
of the Institutional Service Shares, all of which was paid to financial
institutions.
Custodian and Portfolio Recordkeeper. State Street Bank and Trust
Company, Boston, MA, is custodian for the securities and cash of the
Fund. Federated Services Company also provides certain accounting and
recordkeeping services with respect to the Fund's portfolio investments.
Transfer Agent. As transfer agent, Federated Services Company maintains
all necessary shareholder records. For its services, the transfer agent
receives a fee based on the size, type and number of accounts and
transactions made by shareholders.
DETERMINING NET ASSET VALUE
The Trustees have decided that the best method for determining the value
of portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for
amortization of premium or accumulation of discount rather than at
current market value. Accordingly, neither the amount of daily income
nor the net asset value is affected by any unrealized appreciation or
depreciation of the portfolio. In periods of declining interest rates,
the indicated daily yield on shares of the Fund computed by dividing the
annualized daily income on the Fund's portfolio by the net asset value
computed as above may tend to be higher than a similar computation made
by using a method of valuation based upon market prices and estimates.
In periods of rising interest rates, the opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio
instruments depends on its compliance with certain conditions in Rule 2a-
7 (the "Rule") promulgated by the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended. Under the Rule,
the Trustees must establish procedures reasonably designed to stabilize
the net asset value per share, as computed for purposes of distribution
and redemption, at $1.00 per share, taking into account current market
conditions and the Fund's investment objective. The procedures include
monitoring the relationship between the amortized cost value per share
and the net asset value per share based upon available indications of
market value. The Trustees will decide what, if any, steps should be
taken if there is a difference of more than 0.5 of 1% between the two
values. The Trustees will take any steps they consider appropriate (such
as redemption in kind or shortening the average portfolio maturity) to
minimize any material dilution or other unfair results arising from
differences between the two methods of determining net asset value.
REDEMPTION IN KIND
The Fund is obligated to redeem shares solely in cash up to $250,000 or
1% of the Fund's net asset value, whichever is less, for any one
shareholder within a 90-day period. Any redemption beyond this amount
will also be in cash unless the Trustees determine that further payments
should be in kind. In such cases, the Fund will pay all or a portion of
the remainder of the redemption in portfolio instruments valued in the
same way as the Fund determines net asset value. The portfolio
instruments will be selected in a manner that the Trustees deem fair and
equitable. Redemption in kind is not as liquid as a cash redemption. If
redemption is made in kind, shareholders who sell these securities could
receive less than the redemption value and could incur certain
transaction costs.
THE FUND'S TAX STATUS
To qualify for the special tax treatment afforded to regulated
investment companies, the Fund must, among other requirements: derive at
least 90% of its gross income from dividends, interest, and gains from
the sale of securities; derive less than 30% of its gross income from
the sale of securities held less than three months; invest in securities
within certain statutory limits; and distribute to its shareholders at
least 90% of its net income earned during the year.
PERFORMANCE INFORMATION
Performance depends upon such variables as: portfolio quality; average
portfolio maturity; type of instruments in which the portfolio is
invested; changes in interest rates; changes in expenses; and the
relative amount of cash flow. To the extent that financial institutions
and broker/dealers charge fees in connection with services provided in
conjunction with an investment in shares of the Fund, the performance
will be reduced for those shareholders paying those fees.
YIELD
The yield is calculated based upon the seven days ending on the day of
the calculation, called the "base period." This yield is computed by:
determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net
change excluding capital changes but including the value of any
additional shares purchased with dividends earned from the original one
share and all dividends declared on the original and any purchased
shares; dividing the net change in the account's value by the value of
the account at the beginning of the base period to determine the base
period return; and multiplying the base period return by 365/7.
For the seven-day period ended July 31, 1995, the yield for
Institutional Shares was 5.69%. For the seven-day period ended July 31,
1995, the yield for Institutional Service Shares was 5.44%.
EFFECTIVE YIELD
The effective yield is calculated by compounding the unannualized base
period return by: adding 1 to the base period return; raising the sum to
the 365/7th power; and subtracting 1 from the result.
For the seven-day period ended July 31, 1995, the effective yield for
Institutional Shares was 5.85%. For the seven-day period ended July 31,
1995, the effective yield for Institutional Service Shares was 5.59%.
TOTAL RETURN
Average annual total return is the average compounded rate of return for
a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value
is computed by multiplying the number of shares owned at the end of the
period by the net asset value per share at the end of the period. The
number of shares owned at the end of the period is based on the number
of shares purchased at the beginning of the period with $1,000, adjusted
over the period by any additional shares, assuming the monthly
reinvestment of all dividends and distributions.
For the one-year period ended July 31, 1995 and for the period from July
5, 1994 (date of initial public offering) through July 31, 1995, the
average annual total returns were 5.23% and 5.15%, respectively, for
Institutional Service Shares.
Prior to the creation of separate classes of shares, for the one-year
and five-year periods ended July 31,1995 and for the period from
December 12, 1989 (start of performance) to July 31, 1995, the average
annual total returns were 5.50%, 4.73%, and 5.11%, respectively, for
Institutional Shares.
PERFORMANCE COMPARISONS
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance,
investors should consider all relevant factors such as the composition
of any index used, prevailing market conditions, portfolio compositions
of other funds, and methods used to value portfolio securities and
compute offering price. The financial publications and/or indices which
the Fund uses in advertising may include:
O LIPPER ANALYTICAL SERVICES, INC., ranks funds in various fund
categories based on total return, which assumes the reinvestment
of all income dividends and capital gains distributions, if any.
o DONOGHUE'S MONEY FUND REPORT publishes annualized yields of money
market funds weekly. Donoghue's MONEY MARKET INSIGHT publication
reports monthly and 12-month-to-date investment results for the
same money funds.
o MONEY, a monthly magazine, regularly ranks money market funds in
various categories based on the latest available seven-day
effective yield.
o SALOMON 30-DAY CD INDEX compares rate levels of 30-day
certificates of deposit from the top ten prime representative
banks.
o SALOMON 30-DAY TREASURY BILL INDEX is a weekly quote of the most
representative yields for selected securities, issued by the U.S.
Treasury, maturing in 30 days.
o DISCOUNT CORPORATION OF NEW YORK 30-DAY FEDERAL AGENCIES is a
weekly quote of the average daily offering price for selected
federal agency issues maturing in 30 days.
ABOUT FEDERATED INVESTORS
Federated is dedicated to meeting investor needs which is reflected in
its investment decision making structured, straightforward, and
consistent. This has resulted in a history of competitive performance
with a range of competitive investment products that have gained the
confidence of thousands of clients and their customers.
The company's disciplined security selection process is firmly rooted in
sound methodologies backed by fundamental and technical research.
Investment decisions are made and executed by teams of portfolio
managers, analysts, and traders dedicated to specific market sectors.
In the money market sector, Federated gained prominence in the mutual
fund industry in 1974 with the creation of the first institutional money
market fund. Simultaneously, the company pioneered the use of the
amortized cost method of accounting for valuing shares of money market
funds, a principal means used by money managers today to value money
market fund shares. Other innovations include the first institutional
tax-free money market fund. As of December 31, 1994, Federated managed
more than $31 billion in assets across approximately 43 money market
funds, including 17 government, 8 prime and 18 municipal with assets
approximating $17 billion, $7.4 billion and $6.6 billion, respectively.
J. Thomas Madden, Executive Vice President, oversees Federated's equity
and high yield corporate bond management while William D. Dawson,
Executive Vice President, oversees Federated's domestic fixed income
management. Henry A. Frantzen, Executive Vice President, oversees the
management of Federated's international portfolios.
MUTUAL FUND MARKET
Twenty-seven percent of American households are pursuing their financial
goals through mutual funds. These investors, as well as businesses and
institutions, have entrusted over $2 trillion to the more than 5,500
funds available.*
Federated Investors, through its subsidiaries, distributes mutual funds
for a variety of investment applications. Specific markets include:
INSTITUTIONAL
Federated meets the needs of more than 4,000 institutional clients
nationwide by managing and servicing separate accounts and mutual funds
for a variety of applications, including defined benefit and defined
contribution programs, cash management, and asset/liability management.
Institutional clients include corporations, pension funds, tax-exempt
entities, foundations/endowments, insurance companies, and investment
and financial advisors. The marketing effort to these institutional
clients is headed by John B. Fisher, President, Institutional Sales
Division.
TRUST ORGANIZATIONS
Other institutional clients include close relationships with more than
1,500 banks and trust organizations. Virtually all of the trust
divisions of the top 100 bank holding companies use Federated funds in
their clients' portfolios. The marketing effort to trust clients is
headed by Mark R. Gensheimer, Executive Vice President, Bank Marketing &
Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated mutual funds are available to consumers through major
brokerage firms nationwide including 200 New York Stock Exchange
firms supported by more wholesalers than any other mutual fund
distributor. The marketing effort to these firms is headed by James F.
Getz, President, Broker/Dealer Division.
*Source: Investment Company Institute
Cusip 60934N500
Cusip 60934N872
9110208B (9/95)
TAX-FREE OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST)
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
Combined Statement of Additional Information
This Combined Statement of Additional Information should be read
with the prospectuses of Tax-Free Obligations Fund (the "Fund"), a
portfolio of Money Market Obligations Trust (the "Trust") dated
September 30, 1995. This Statement is not a prospectus. To receive
a copy of a prospectus, write or call the Fund.
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Statement dated September 30, 1995
Federated Securities Corp.
Distributor
A subsidiary of
Federated Investors
INVESTMENT POLICIES 1
Acceptable Investments 1
Participation Interests 1
Municipal Leases 1
When-Issued and Delayed
Delivery Transactions 1
Repurchase Agreements 1
INVESTMENT LIMITATIONS 2
BROKERAGE TRANSACTIONS 4
MONEY MARKET OBLIGATIONS TRUST
MANAGEMENT 4
Share Ownership 8
Trustees Compensation 8
Trustee Liability 9
INVESTMENT ADVISORY SERVICES 9
Investment Adviser 9
Advisory Fees 9
FUND ADMINISTRATION 10
SHAREHOLDER SERVICES AGREEMENT 10
DETERMINING NET ASSET VALUE 10
REDEMPTION IN KIND 11
THE FUND'S TAX STATUS 11
PERFORMANCE INFORMATION 11
Yield 11
Effective Yield 11
Tax-Equivalent Yield 11
Total Return 12
Performance Comparisons 12
ABOUT FEDERATED INVESTORS 13
Mutual Fund Market 13
Institutional 13
Trust Organizations 14
Broker/Dealers and
Bank Broker/Dealer
Subsidiaries 14
INVESTMENT POLICIES
Unless indicated otherwise, the policies described below may be changed
by the Board of Trustees without shareholder approval. Shareholders will
be notified before any material change in these policies becomes
effective.
ACCEPTABLE INVESTMENTS
When determining whether a municipal security presents minimal credit
risks, the investment adviser will consider the creditworthiness of: the
issuer of a municipal security, the issuer of a demand feature if the
Fund has the unconditional right to demand payment for the municipal
security, or any guarantor of payment by either of those issuers.
PARTICIPATION INTERESTS
The financial institutions from which the Fund purchases participation
interests frequently provide or secure from another financial
institution irrevocable letters of credit or guarantees and give the
Fund the right to demand payment of the principal amounts of the
participation interests plus accrued interest on short notice (usually
within seven days). The municipal securities subject to the
participation interests are not limited to the Fund's maximum maturity
requirements so long as the participation interests include the right to
demand payment from the issuers of those interests. By purchasing these
participation interests, the Fund is buying a security meeting the
maturity and quality requirements of the Fund and also is receiving the
tax-free benefits of the underlying securities.
MUNICIPAL LEASES
The Fund may purchase municipal securities in the form of participation
interests that represent an undivided proportional interest in lease
payments by a governmental or nonprofit entity. The lease payments and
other rights under the lease provide for and secure payments on the
certificates. Lease obligations may be limited by municipal charter or
the nature of the appropriation for the lease. Furthermore, a lease may
provide that the participants cannot accelerate lease obligations upon
default. The participants would only be able to enforce lease payments
as they became due. In the event of a default or failure of
appropriation, unless the participation interests are credit enhanced,
it is unlikely that the participants would be able to obtain an
acceptable substitute source of payment.
In determining the liquidity of municipal lease securities, the
investment adviser, under the authority delegated by the Board of
Trustees, will base its determination on the following factors: whether
the lease can be terminated by the lessee; the potential recovery, if
any, from a sale of the leased property upon termination of the lease;
the lessee's general credit strength (e.g., its debt, administrative,
economic and financial characteristics and prospects); the likelihood
that the lessee will discontinue appropriating funding for the leased
property because the property is no longer deemed essential to its
operations (e.g., the potential for an "event of non-appropriation");
and any credit enhancement or legal recourse provided upon an event of
non-appropriation or other termination of the lease.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. No fees or other expenses,
other than normal transaction costs, are incurred. However, liquid
assets of the Fund sufficient to make payment for the securities to be
purchased are segregated on the Fund's records at the trade date. These
assets are marked to market daily and are maintained until the
transaction has been settled. The Fund does not intend to engage in when-
issued and delayed delivery transactions to an extent that would cause
the segregation of more than 20% of the total value of its assets.
REPURCHASE AGREEMENTS
Certain securities in which the Fund invests may be purchased pursuant
to repurchase agreements. Repurchase agreements are arrangements in
which banks, broker/dealers, and other recognized financial institutions
sell securities to the Fund and agree at the time of sale to repurchase
them at a mutually agreed upon time and price. To the extent that the
seller does not repurchase the securities from the Fund, the Fund could
receive less than the repurchase price on any sale of such securities.
The Fund or its custodian will take possession of the securities subject
to repurchase agreements, and these securities will be marked to market
daily. In the event that a defaulting seller filed for bankruptcy or
became insolvent, disposition of such securities by the Fund might be
delayed pending court action. The Fund believes that under the regular
procedures normally in effect for custody of the Fund's portfolio
securities subject to repurchase agreements, a court of competent
jurisdiction would rule in favor of the Fund and allow retention or
disposition of such securities. The Fund will only enter into repurchase
agreements with banks and other recognized financial institutions, such
as broker/dealers, which are deemed by the Fund's adviser to be
creditworthy pursuant to guidelines established by the Trustees.
INVESTMENT LIMITATIONS
Selling Short and Buying on Margin
The Fund will not sell any securities short or purchase any
securities on margin but may obtain such short-term credits as may be
necessary for clearance of transactions.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities except that the Fund may
borrow money in amounts up to one-third of the value of its total
assets, including the amounts borrowed.
The Fund will not borrow money for investment leverage, but rather as
a temporary, extraordinary, or emergency measure or to facilitate
management of the portfolio by enabling the Fund to meet redemption
requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. The Fund will not purchase any
securities while borrowings in excess of 5% of the value of its total
assets are outstanding.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets except
to secure permitted borrowings. In those cases, it may pledge assets
having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of total assets of the Fund at the time
of the pledge.
Lending Cash or Securities
The Fund will not lend any of its assets. This shall not prevent the
Fund from purchasing or holding bonds, debentures, notes,
certificates of indebtedness or other debt securities or engaging in
other transactions where permitted by the Fund's investment
objective, policies, and limitations or Declaration of Trust.
Investing in Commodities
The Fund will not purchase or sell commodities, commodity contracts,
or commodity futures contracts.
Investing in Real Estate
The Fund will not purchase or sell real estate, although it may
invest in securities of issuers whose business involves the purchase
or sale of real estate or in securities which are secured by real
estate or interests in real estate.
Underwriting
The Fund will not underwrite any issue of securities, except as it
may be deemed to be an underwriter under the Securities Act of 1933
in connection with the sale of securities in accordance with its
investment objective, policies, and limitations.
Concentration of Investments
The Fund will not purchase securities if, as a result of such
purchase, 25% or more of the value of its total assets would be
invested in any one industry or in industrial development bonds or
other securities, the interest upon which is paid from revenues of
similar type projects.
The Fund may invest, as temporary investments, 25% or more of the
value of its total assets in cash or cash items, securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities
or instruments secured by these money market instruments, such as
repurchase agreements.
The Fund does not intend to purchase securities that would increase
the percentage of its assets invested in the securities of
governmental subdivisions located in any one state, territory, or
U.S. possession to 25% or more. However, the Fund may invest 25% or
more of the value of its assets in tax-exempt project notes
guaranteed by the U.S. government, regardless of the location of the
issuing municipality.
If the value of Fund assets invested in the securities of a
governmental subdivision changes because of changing values, the Fund
will not be required to make any reduction in its holdings.
Diversification of Investments
With respect to 75% of the value of its total assets, the Fund will
not purchase securities of any one issuer (other than cash, cash
items, or securities issued or guaranteed by the government of the
United States or its agencies or instrumentalities and repurchase
agreements collateralized by such U.S. government securities) if, as
a result, more than 5% of the value of its total assets would be
invested in the securities of that issuer.
Under this limitation, each governmental subdivision, including
states and the District of Columbia, territories, possessions of the
United States, or their political subdivisions, agencies,
authorities, instrumentalities, or similar entities, will be
considered a separate issuer if its assets and revenues are separate
from those of the governmental body creating it and the security is
backed only by its own assets and revenues. Industrial development
bonds, backed only by the assets and revenues of a nongovernmental
user, are considered to be issued solely by that user. If in the case
of an industrial development bond or governmental-issued security, a
governmental or other entity guarantees the security, such guarantee
would be considered a separate security issued by the guarantor as
well as the other issuer, subject to limited exclusions allowed by
the Investment Company Act of 1940, as amended.
Investing in Restricted Securities
The Fund will not invest more than 10% of its total assets in
securities subject to restrictions on resale under federal securities
law, except for restricted securities determined to be liquid under
criteria established by the Trustees.
The above limitations cannot be changed without shareholder approval.
The following investment limitations, however, may be changed by
Trustees without shareholder approval. Shareholders will be notified
before any material change in these limitations becomes effective.
Investing in Illiquid Securities
The Fund will not invest more than 10% of the value of its net assets
in illiquid securities.
Investing in Securities of Other Investment Companies
The Fund will not purchase securities of other investment companies,
except as part of a merger, consolidation, or other acquisition.
Investing in New Issuers
The Fund will not invest more than 5% of the value of its total
assets in securities of issuers (including companies responsible for
paying principal and interest on industrial development bonds) which
have records of less than three years of continuous operations,
including the operation of any predecessor.
Investing for Control
The Fund will not invest in securities of a company for the purpose
of exercising control or management.
Investing in Issuers Whose Securities are Owned by Officers of the Trust
The Fund will not purchase or retain the securities of any issuer if
the Officers and Trustees of the Trust or the Fund's investment
adviser owning individually more than .50 of 1% of the issuer's
securities together own more than 5% of the issuer's securities.
Investing in Options
The Fund will not invest in puts, calls, straddles, spreads, or any
combination of them.
Investing in Minerals
The Fund will not purchase or sell interests in oil, gas, or other
mineral exploration or development programs or leases, although it
may purchase the securities of issuers which invest in or sponsor
such programs.
For purposes of the above limitations, the Fund considers certificates
of deposit and demand and time deposits issued by a U.S. branch of a
domestic bank or savings and loan having capital, surplus, and undivided
profits in excess of $100,000,000 at the time of investment to be "cash
items." Except with respect to borrowing money, if a percentage
limitation is adhered to at the time of investment, a later increase or
decrease in percentage resulting from any change in value or net assets
will not result in a violation of such limitation.
The Fund did not borrow money or pledge securities in excess of 5% of
the value of its net assets during the last fiscal year and has no
present intent to do so during the coming fiscal year.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the
order at a favorable price. In working with dealers, the adviser will
generally use those who are recognized dealers in specific portfolio
instruments, except when a better price and execution of the order can
be obtained elsewhere. The adviser makes decisions on portfolio
transactions and selects brokers and dealers subject to guidelines
established by the Board of Trustees. The adviser may select brokers and
dealers who offer brokerage and research services. These services may be
furnished directly to the Fund or to the adviser and may include: advice
as to the advisability of investing in securities; security analysis and
reports; economic studies; industry studies; receipt of quotations for
portfolio evaluations; and similar services. Research services provided
by brokers and dealers may be used by the adviser or its affiliates in
advising the Fund and other accounts. To the extent that receipt of
these services may supplant services for which the adviser or its
affiliates might otherwise have paid, it would tend to reduce their
expenses. The adviser and its affiliates exercise reasonable business
judgment in selecting brokers who offer brokerage and research services
to execute securities transactions. They determine in good faith that
commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided. During the
fiscal years ended July 31, 1995, 1994, and 1993, the Fund paid no
brokerage commissions.
Although investment decisions for the Fund are made independently from
those of the other accounts managed by the adviser, investments of the
type the Fund may make may also be made by those other accounts. When
the Fund and one or more other accounts managed by the adviser are
prepared to invest in, or desire to dispose of, the same security,
available investments or opportunities for sales will be allocated in a
manner believed by the adviser to be equitable to each. In some cases,
this procedure may adversely affect the price paid or received by the
Fund or the size of the position obtained or disposed of by the Fund. In
other cases, however, it is believed that coordination and the ability
to participate in volume transactions will be to the benefit of the
Fund.
MONEY MARKET OBLIGATIONS TRUST MANAGEMENT
Officers and Trustees are listed with their addresses, birthdates,
present positions with Money Market Obligations Trust, and principal
occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp. and Federated Global Research Corp.; Chairman, Passport
Research, Ltd.; Chief Executive Officer and Director, Trustee, or
Managing General Partner of the Funds. Mr. Donahue is the father of J.
Christopher Donahue, President and Trustee of the Trust.
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's
Hospital of Pittsburgh; Director, Trustee, or Managing General Partner
of the Funds; formerly, Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
Trustee
President, Investment Properties Corporation; Senior Vice-President,
John R. Wood and Associates, Inc., Realtors; President, Northgate
Village Development Corporation; Partner or Trustee in private real
estate ventures in Southwest Florida; Director, Trustee, or Managing
General Partner of the Funds; formerly, President, Naples Property
Management, Inc.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Birthdate: July 4, 1918
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and
Director, Ryan Homes, Inc.
J. Christopher Donahue *
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
President and Trustee
President and Trustee, Federated Investors, Federated Advisers,
Federated Management, and Federated Research; President and Director,
Federated Research Corp. and Federated Global Research Corp.; President,
Passport Research, Ltd.; Trustee, Federated Administrative Services,
Federated Services Company, and Federated Shareholder Services;
President or Vice President of the Funds; Director, Trustee, or Managing
General Partner of some of the Funds. Mr. Donahue is the son of John F.
Donahue, Chairman and Trustee of the Trust.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine and Member, Board of Trustees, University of
Pittsburgh; Medical Director, University of Pittsburgh Medical Center -
Downtown; Member, Board of Directors, University of Pittsburgh Medical
Center; formerly, Hematologist, Oncologist, and Internist, Presbyterian
and Montefiore Hospitals; Director, Trustee, or Managing General Partner
of the Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty;
Director, Eat'N Park Restaurants, Inc., and Statewide Settlement Agency,
Inc.; Director, Trustee, or Managing General Partner of the Funds;
formerly, Counsel, Horizon Financial, F.A., Western Region.
Peter E. Madden
70 Westcliff Road
Westin, MA
Birthdate: March 16, 1942
Trustee
Consultant; State Representative, Commonwealth of Massachusetts;
Director, Trustee, or Managing General Partner of the Funds; formerly,
President, State Street Bank and Trust Company and State Street Boston
Corporation.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney-at-law; Partner, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner,
Mollica, Murray and Hogue; Director, Trustee or Managing General Partner
of the Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics and Management Consultant; Trustee,
Carnegie Endowment for International Peace, RAND Corporation, Online
Computer Library Center, Inc., and U.S. Space Foundation; Chairman,
Czecho Management Center; Director, Trustee, or Managing General Partner
of the Funds; President Emeritus, University of Pittsburgh; founding
Chairman, National Advisory Council for Environmental Policy and
Technology and Federal Emergency Management Advisory Board.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/marketing consultant; Conference Coordinator, Non-
profit entities; Director, Trustee, or Managing General Partner of the
Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of
some of the Funds; Director or Trustee of some of the Funds.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice
President, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., Federated Global Research Corp., and Passport
Research, Ltd.; Executive Vice President and Director, Federated
Securities Corp.; Trustee, Federated Services Company; Chairman,
Treasurer, and Trustee, Federated Administrative Services; Trustee or
Director of some of the Funds; Executive Vice President and Treasurer of
the Funds.
David M. Taylor
Federated Investors Tower
Pittsburgh, PA
Birthdate: January 13, 1947
Treasurer
Senior Vice President, Controller, and Trustee, Federated Investors;
Controller, Federated Advisers, Federated Management, Federated
Research, Federated Research Corp., and Passport Research, Ltd.; Vice
President, Federated Shareholder Services; Senior Vice President,
Federated Administrative Services; Treasurer of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Vice President, Secretary, General Counsel, and Trustee, Federated
Investors; Trustee, Federated Advisers, Federated Management, and
Federated Research; Director, Federated Research Corp. and Federated
Global Research Corp.; Trustee, Federated Services Company; Executive
Vice President, Secretary, and Trustee, Federated Administrative
Services; President and Trustee, Federated Shareholder Services;
Director, Federated Securities Corp.; Executive Vice President and
Secretary of the Funds.
* This Trustee is deemed to be an "interested person" as defined
in the Investment Company Act of 1940, as amended.
@ Member of the Executive Committee. The Executive Committee of
the Board of Trustees handles the responsibilities of the Board
of Trustees between meetings of the Board.
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; Automated Government Money Trust; Blanchard Funds;
Blanchard Precious Metals, Inc.; Cash Trust Series II; Cash Trust
Series, Inc.; DG Investor Series; Edward D. Jones & Co. Daily Passport
Cash Trust; Federated ARMs Fund; Federated Equity Funds; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated High Yield Trust; Federated Income Securities Trust; Federated
Income Trust; Federated Index Trust; Federated Institutional Trust;
Federated Master Trust; Federated Municipal Trust; Federated Short-Term
Municipal Trust; Federated Short-Term U.S. Government Trust; Federated
Stock Trust; Federated Tax-Free Trust; Federated Total Return Series,
Inc.; Federated U.S. Government Bond Fund; Federated U.S. Government
Securities Fund: 1-3 Years; Federated U.S, Government Securities Fund: 3-
5 Years; First Priority Funds; Fixed Income Securities, Inc.; Fortress
Adjustable Rate U.S. Government Fund, Inc.; Fortress Municipal Income
Fund, Inc.; Fortress Utility Fund, Inc.; Fund for U.S. Government
Securities, Inc.; Government Income Securities, Inc.; High Yield Cash
Trust;; Insurance Management Series; Intermediate Municipal Trust;
International Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty Equity Income Fund, Inc.; Liberty High Income Bond
Fund, Inc.; Liberty Municipal Securities Fund, Inc.; Liberty U.S.
Government Money Market Trust; Liberty Term Trust, Inc. - 1999; Liberty
Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust; Money
Market Management, Inc.; Money Market Obligations Trust; Money Market
Trust; Municipal Securities Income Trust; Newpoint Funds; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The
Shawmut Funds; Star Funds; The Starburst Funds; The Starburst Funds II;
Stock and Bond Fund, Inc.; Sunburst Funds; Targeted Duration Trust; Tax-
Free Instruments Trust; Trust for Financial Institutions; Trust For
Government Cash Reserves; Trust for Short-Term U.S. Government
Securities; Trust for U.S. Treasury Obligations; The Virtus Funds; World
Investment Series, Inc.
SHARE OWNERSHIP
Officers and Trustees as a group own less than 1% of the Fund's
outstanding shares.
As of September 6, 1995, the following shareholders of record owned 5%
or more of the outstanding Institutional Shares of the Fund: Var & Co.,
St. Paul, MN, owned approximately 399,772,247 shares (24.46%); First
Union National Bank, Charlotte, NC owned approximately 245,023,656
shares (14.99%); Tenneco Corporation, Houston, TX, owned approximately
157,600,000 shares (9.64%); Boatmen's Trust Company, St. Louis, MO,
owned approximately 101,535,626 shares (6.21%); and Wachovia Bank of
North Carolina, Winston-Salem, NC, owned approximately 95,006,399 shares
(5.81%).
As of September 6, 1995, the following shareholders of record owned 5%
or more of the outstanding Institutional Service Shares of the Fund:
Naidot & Co., Woodbridge, NJ, owned approximately 55,305,100 shares
(20.58%); Hamac, Richmond, VA, owned approximately 32,930,178 shares
(12.26%); Putnam Trust, Greenwich, CT, owned approximately 30,909,500
shares (11.50%); Anderson & Co., Philadelphia, PA, owned approximately
24,810,214 shares (9.23%); Morand & Company, Chicago, IL, owned
approximately 22,663,689 shares (8.43%); Saxon & Co., Philadelphia, PA,
owned approximately 18,957,311 shares (7.06%); and Harris Bank
Barrington, Barrington, IL, owned approximately 13,858,578 shares
(5.16%).
TRUSTEES COMPENSATION
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST*# FROM FUND COMPLEX +
John F. Donahue $0 $0 for the Trust and
Chairman and Trustee 68 other investment companies in the
Fund Complex
Thomas G. Bigley $3,078 $20,688 for the Trust and
Trustee 49 other investment companies in the
Fund Complex
John T. Conroy, Jr. $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
William J. Copeland $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
J. Christopher Donahue $0 $0 for the Trust and
President and Trustee 14 other investment companies in the
Fund Complex
James E. Dowd $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Lawrence D. Ellis, M.D. $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Edward L. Flaherty, Jr. $5,840 $117,202 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Peter E. Madden $2,978 $90,563 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Gregor F. Meyer $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
John E. Murray, Jr., $863 $0 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Wesley W. Posvar $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
Marjorie P. Smuts $4,306 $106,460 for the Trust and
Trustee 64 other investment companies in the
Fund Complex
*Information is furnished for the fiscal year ended July 31, 1995.
#The aggregate compensation is provided for the Trust which is comprised
of six portfolios.
+The information is provided for the last calendar year.
TRUSTEE LIABILITY
The Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of their
office.
INVESTMENT ADVISORY SERVICES
INVESTMENT ADVISER
The Fund's investment adviser is Federated Management. It is a
subsidiary of Federated Investors. All the voting securities of
Federated Investors are owned by a trust, the trustees of which are John
F. Donahue, his wife and his son, J. Christopher Donahue.
The adviser shall not be liable to the Trust, the Fund, or any
shareholder of the Fund for any losses that may be sustained in the
purchase, holding, or sale of any security or for anything done or
omitted by it, except acts or omissions involving willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties imposed
upon it by its contract with the Trust.
ADVISORY FEES
For its advisory services, Federated Management receives an annual
investment advisory fee as described in the prospectus. For the fiscal
years ended July 31, 1995, 1994 and 1993, the adviser earned $947,091,
$1,392,414 and $820,734, respectively, of which $578,466, $1,014,059,
and $582,656, respectively, were waived.
State Expense Limitations
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose
shares are registered for sale in those states. If the Fund's
normal operating expenses (including the investment advisory fee,
but not including brokerage commissions, interest, taxes, and
extraordinary expenses) exceed 2-1/2% per year of the first $30
million of average net assets, 2% per year of the next $70 million
of average net assets, and 1-1/2% per year of the remaining
average net assets, the adviser will reimburse the Fund for its
expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this
limitation, the investment advisory fee paid will be reduced by
the amount of the excess, subject to an annual adjustment. If the
expense limitation is exceeded, the amount to be reimbursed by the
adviser will be limited, in any single fiscal year, by the amount
of the investment advisory fees.
This arrangement is not part of the advisory contract and may be
amended or rescinded in the future.
FUND ADMINISTRATION
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Fund for a fee as
described in the prospectus. Prior to March 1, 1994, Federated
Administrative Services, Inc., also a subsidiary of Federated Investors,
served as the Fund's Administrator. (For purposes of this Statement of
Additional Information, Federated Administrative Services and Federated
Administrative Services, Inc. may hereinafter collectively be referred
to as the "Administrators".) For the fiscal year ended July 31, 1995,
Federated Administrative Services earned $358,474. For the fiscal year
ended July 31, 1994, the Administrators collectively earned $493,607.
For the fiscal year ended July 31, 1993, Federated Administrative
Services, Inc., earned $284,326. Dr. Henry J. Gailliot, an officer of
Federated Management, the adviser to the Fund, holds approximately 20%
of the outstanding common stock and serves as a director of Commercial
Data Services, Inc., a company which provides computer processing
services to Federated Administrative Services.
SHAREHOLDER SERVICES AGREEMENT
This arrangement permits the payment of fees to Federated Shareholder
Services and financial institutions to cause services to be provided
which are necessary for the maintenance of shareholder accounts and to
encourage personal services to shareholders by a representative who has
knowledge of the shareholder's particular circumstances and goals. These
activities and services may include, but are not limited to: providing
office space, equipment, telephone facilities, and various clerical,
supervisory, computer, and other personnel as necessary or beneficial to
establish and maintain shareholder accounts and records; processing
purchase and redemption transactions and automatic investments of client
account cash balances; answering routine client inquiries; and assisting
clients in changing dividend options, account designations, and
addresses. By adopting the Shareholder Services Agreement, the Board of
Trustees expects that the Fund will benefit by: (1) providing personal
services to shareholders; (2) investing shareholder assets with a
minimum of delay and administrative detail; (3) enhancing shareholder
recordkeeping systems; and (4) responding promptly to shareholders'
requests and inquiries concerning their accounts. For the fiscal period
ending July 31, 1995, the Fund paid shareholder service fees in the
amount of $119,592 pursuant to the Shareholder Services Plan on behalf
of the Institutional Service Shares, all of which was paid to financial
institutions.
Custodian and Portfolio Recordkeeper. State Street Bank and Trust
Company, Boston, MA, is custodian for the securities and cash of the
Fund. Federated Services Company also provides certain accounting and
recordkeeping services with respect to the Fund's portfolio investments.
Transfer Agent. As transfer agent, Federated Services Company maintains
all necessary shareholder records. For its services, the transfer agent
receives a fee based on the size, type and number of accounts and
transactions made by shareholders.
DETERMINING NET ASSET VALUE
The Trustees have decided that the best method for determining the value
of portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for
amortization of premium or accumulation of discount rather than at
current market value. Accordingly, neither the amount of daily income
nor the net asset value is affected by any unrealized appreciation or
depreciation of the portfolio. In periods of declining interest rates,
the indicated daily yield on shares of the Fund computed by dividing the
annualized daily income on the Fund's portfolio by the net asset value
computed as above may tend to be higher than a similar computation made
by using a method of valuation based upon market prices and estimates.
In periods of rising interest rates, the opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio
instruments depends on its compliance with certain conditions in Rule 2a-
7 (the "Rule") promulgated by the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended. Under the Rule,
the Trustees must establish procedures reasonably designed to stabilize
the net asset value per share, as computed for purposes of distribution
and redemption, at $1.00 per share, taking into account current market
conditions and the Fund's investment objective. The procedures include
monitoring the relationship between the amortized cost value per share
and the net asset value per share based upon available indications of
market value. The Trustees will decide what, if any, steps should be
taken if there is a difference of more than 0.5 of 1% between the two
values. The Trustees will take any steps they consider appropriate (such
as redemption in kind or shortening the average portfolio maturity) to
minimize any material dilution or other unfair results arising from
differences between the two methods of determining net asset value.
REDEMPTION IN KIND
The Fund is obligated to redeem shares solely in cash up to $250,000 or
1% of the Fund's net asset value, whichever is less, for any one
shareholder within a 90-day period. Any redemption beyond this amount
will also be in cash unless the Trustees determine that further payments
should be in kind. In such cases, the Fund will pay all or a portion of
the remainder of the redemption in portfolio instruments valued in the
same way as the Fund determines net asset value. The portfolio
instruments will be selected in a manner that the Trustees deem fair and
equitable. Redemption in kind is not as liquid as a cash redemption. If
redemption is made in kind, shareholders who sell these securities could
receive less than the redemption value and could incur certain
transaction costs.
THE FUND'S TAX STATUS
To qualify for the special tax treatment afforded to regulated
investment companies, the Fund must, among other requirements: derive at
least 90% of its gross income from dividends, interest, and gains from
the sale of securities; derive less than 30% of its gross income from
the sale of securities held less than three months; invest in securities
within certain statutory limits; and distribute to its shareholders at
least 90% of its net income earned during the year.
PERFORMANCE INFORMATION
Performance depends upon such variables as: portfolio quality; average
portfolio maturity; type of instruments in which the portfolio is
invested; changes in interest rates; changes in expenses; and the
relative amount of cash flow. To the extent that financial institutions
and broker/dealers charge fees in connection with services provided in
conjunction with an investment in shares of the Fund, the performance
will be reduced for those shareholders paying those fees.
YIELD
The yield is calculated based upon the seven days ending on the day of
the calculation, called the "base period." This yield is computed by:
determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net
change excluding capital changes but including the value of any
additional shares purchased with dividends earned from the original one
share and all dividends declared on the original and any purchased
shares; dividing the net change in the account's value by the value of
the account at the beginning of the base period to determine the base
period return; and multiplying the base period return by 365/7.
For the seven-day period ended July 31, 1995, the yield for
Institutional Shares was 3.72%. For the seven-day period ended July 31,
1995, the yield for Institutional Service Shares was 3.47%.
EFFECTIVE YIELD
The effective yield is calculated by compounding the unannualized base
period return by: adding 1 to the base period return; raising the sum to
the 365/7th power; and subtracting 1 from the result.
For the seven-day period ended July 31, 1995, the effective yield for
Institutional Shares was 3.79%. For the seven-day period ended July 31,
1995, the effective yield for Institutional Service Shares was 3.53%.
TAX-EQUIVALENT YIELD
For the seven-day period ended July 31, 1995, the tax-equivalent yield
for Institutional Shares was 6.16%. For the seven-day period ended July
31, 1995, the tax-equivalent yield for Institutional Service Shares was
5.75%.
TAX-EQUIVALENCY TABLE
A tax-equivalency table may be used in advertising and sales literature.
The interest earned by the municipal securities in the Fund's portfolio
generally remains free from federal regular income tax,* and is often
free from state and local taxes as well. As the table below indicates, a
"tax-free" investment can be an attractive choice for investors,
particularly in times of narrow spreads between tax-free and taxable
yields.
TAXABLE YIELD EQUIVALENT FOR 1995
TAX-FREE OBLIGATIONS FUND
FEDERAL INCOME TAX BRACKET:
15.00% 28.00% 31.00% 36.00%
39.60%
Joint $1- $39,001 - $94,251 - $143,601 - OVER
Return 39,000 94,250 143,600 256,500 256,500
Single Return $1- $23,351 - $56,551 - $117,951 - OVER
23,350 56,550 117,950 256,500 $256,500
Tax-Exempt
Yield Taxable Yield Equivalent
1.00% 1.18% 1.39% 1.45% 1.56%
1.66%
1.50% 1.76% 2.08% 2.17% 2.34%
2.48%
2.00% 2.35% 2.78% 2.90% 3.13%
3.31%
2.50% 2.94% 3.47% 3.62% 2.91%
4.14%
3.00% 3.53% 4.17% 4.35% 4.69%
4.97%
3.50% 4.12% 4.86% 5.07% 5.47%
5.79%
4.00% 4.71% 5.56% 5.80% 6.25%
6.62%
4.50% 5.29% 6.25% 6.52% 7.03%
7.45%
5.00% 5.88% 6.94% 7.25% 7.81%
8.28%
5.50% 6.47% 7.64% 7.97% 8.59%
9.11%
6.00% 7.06% 8.33% 8.70% 9.38%
9.93%
6.50% 7.65% 9.03% 9.42% 10.16%
10.76%
7.00% 8.24% 9.72% 10.14% 10.94%
11.59%
7.50% 8.82% 10.42% 10.87% 11.72%
12.42%
8.00% 9.41% 11.11% 11.59% 12.50%
13.25%
Note: The maximum marginal tax rate for each bracket was used in
calculating the taxable yield equivalent.
The chart above is for illustrative purposes only. It is not an
indicator of past or future performance of Fund shares.
* Some portion of the Fund's income may be subject to the federal
alternative minimum tax and state and local income taxes.
TOTAL RETURN
Average annual total return is the average compounded rate of return for
a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value
is computed by multiplying the number of shares owned at the end of the
period by the net asset value per share at the end of the period. The
number of shares owned at the end of the period is based on the number
of shares purchased at the beginning of the period with $1,000, adjusted
over the period by any additional shares, assuming the monthly
reinvestment of all dividends and distributions.
For the one-year period ended July 31, 1995 and for the period from July
5, 1994 (date of initial public offering) through July 31, 1995, the
average annual total returns were 3.39% and 3.57%, respectively, for
Institutional Service Shares.
Prior to the creation of separate classes of shares, for the one-year
and five-year periods ended July 31,1995 and for the period from
December 12, 1989 (start of performance) to July 31, 1995, the average
annual total returns were 3.64%, 3.49%, and 3.76%, respectively, for
Institutional Shares.
PERFORMANCE COMPARISONS
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance,
investors should consider all relevant factors such as the composition
of any index used, prevailing market conditions, portfolio compositions
of other funds, and methods used to value portfolio securities and
compute offering price. The financial publications and/or indices which
the Fund uses in advertising may include:
O LIPPER ANALYTICAL SERVICES, INC., ranks funds in various fund
categories based on total return, which assumes the reinvestment
of all income dividends and capital gains distributions, if any.
o DONOGHUE'S MONEY FUND REPORT publishes annualized yields of money
market funds weekly. Donoghue's MONEY MARKET INSIGHT publication
reports monthly and 12-month-to-date investment results for the
same money funds.
o MONEY, a monthly magazine, regularly ranks money market funds in
various categories based on the latest available seven-day
effective yield.
o SALOMON 30-DAY CD INDEX compares rate levels of 30-day
certificates of deposit from the top ten prime representative
banks.
o SALOMON 30-DAY TREASURY BILL INDEX is a weekly quote of the most
representative yields for selected securities, issued by the U.S.
Treasury, maturing in 30 days.
ABOUT FEDERATED INVESTORS
Federated is dedicated to meeting investor needs which is reflected in
its investment decision making structured, straightforward, and
consistent. This has resulted in a history of competitive performance
with a range of competitive investment products that have gained the
confidence of thousands of clients and their customers.
The company's disciplined security selection process is firmly rooted in
sound methodologies backed by fundamental and technical research.
Investment decisions are made and executed by teams of portfolio
managers, analysts, and traders dedicated to specific market sectors.
In the money market sector, Federated gained prominence in the mutual
fund industry in 1974 with the creation of the first institutional money
market fund. Simultaneously, the company pioneered the use of the
amortized cost method of accounting for valuing shares of money market
funds, a principal means used by money managers today to value money
market fund shares. Other innovations include the first institutional
tax-free money market fund. As of December 31, 1994, Federated managed
more than $31 billion in assets across approximately 43 money market
funds, including 17 government, 8 prime and 18 municipal with assets
approximating $17 billion, $7.4 billion and $6.6 billion, respectively.
J. Thomas Madden, Executive Vice President, oversees Federated's equity
and high yield corporate bond management while William D. Dawson,
Executive Vice President, oversees Federated's domestic fixed income
management. Henry A. Frantzen, Executive Vice President, oversees the
management of Federated's international portfolios.
MUTUAL FUND MARKET
Twenty-seven percent of American households are pursuing their financial
goals through mutual funds. These investors, as well as businesses and
institutions, have entrusted over $2 trillion to the more than 5,500
funds available.*
Federated Investors, through its subsidiaries, distributes mutual funds
for a variety of investment applications. Specific markets include:
INSTITUTIONAL
Federated meets the needs of more than 4,000 institutional clients
nationwide by managing and servicing separate accounts and mutual funds
for a variety of applications, including defined benefit and defined
contribution programs, cash management, and asset/liability management.
Institutional clients include corporations, pension funds, tax-exempt
entities, foundations/endowments, insurance companies, and investment
and financial advisors. The marketing effort to these institutional
clients is headed by John B. Fisher, President, Institutional Sales
Division.
TRUST ORGANIZATIONS
Other institutional clients include close relationships with more than
1,500 banks and trust organizations. Virtually all of the trust
divisions of the top 100 bank holding companies use Federated funds in
their clients' portfolios. The marketing effort to trust clients is
headed by Mark R. Gensheimer, Executive Vice President, Bank Marketing &
Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated mutual funds are available to consumers through major
brokerage firms nationwide including 200 New York Stock Exchange
firms supported by more wholesalers than any other mutual fund
distributor. The marketing effort to these firms is headed by James F.
Getz, President, Broker/Dealer Division.
*Source: Investment Company Institute
Cusip 60934N401
Cusip 60934N880
9110207B (9/95)
- --------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
The Institutional Shares of Government Obligations Fund (the "Fund")
offered by this prospectus represent interests in a diversified
portfolio of Money Market Obligations Trust (the "Trust"), an open-end
management investment company (a mutual fund). The Fund invests in
U.S. government securities to provide current income consistent with
stability of principal.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS
OF ANY BANK, ARE NOT ENDORSED OR 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 THESE SHARES INVOLVES INVESTMENT
RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE FUND ATTEMPTS TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN BE NO
ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and know
before you invest in the Fund. Keep this prospectus for future
reference.
The Fund has also filed a Combined Statement of Additional Information
dated September 30, 1995, with the Securities and Exchange Commission.
The information contained in the Combined Statement of Additional
Information is incorporated by reference into this prospectus. You may
request a copy of the Combined Statement of Additional Information,
which is in paper form only, or a paper copy of this prospectus, if
you have received your prospectus electronically, free of charge by
calling 1-800-235-4669. To obtain other information, or make inquiries
about the Fund, contact the Fund at the address listed in the back of
this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated September 30, 1995
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SUMMARY OF FUND EXPENSES 1
- --------------------------------------------------
FINANCIAL HIGHLIGHTS--INSTITUTIONAL
SHARES 2
- --------------------------------------------------
GENERAL INFORMATION 3
- --------------------------------------------------
INVESTMENT INFORMATION 3
- --------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Limitations 5
Regulatory Compliance 5
TRUST INFORMATION 5
- --------------------------------------------------
Management of the Trust 5
Distribution of Shares 6
Administration of the Trust 7
NET ASSET VALUE 7
- --------------------------------------------------
INVESTING IN THE FUND 8
- --------------------------------------------------
Share Purchases 8
Minimum Investment Required 8
Subaccounting Services 8
Certificates and Confirmations 9
Dividends 9
Capital Gains 9
REDEEMING SHARES 9
- --------------------------------------------------
By Mail 9
Telephone Redemption 10
Accounts with Low Balances 10
SHAREHOLDER INFORMATION 11
- --------------------------------------------------
Voting Rights 11
Massachusetts Partnership Law 11
TAX INFORMATION 11
- --------------------------------------------------
Federal Income Tax 11
Pennsylvania Corporate and Personal
Property Taxes 12
OTHER CLASSES OF SHARES 12
- --------------------------------------------------
PERFORMANCE INFORMATION 12
- --------------------------------------------------
FINANCIAL STATEMENTS 13
- --------------------------------------------------
INDEPENDENT AUDITORS' REPORT 22
- --------------------------------------------------
ADDRESSES 23
- --------------------------------------------------
</TABLE>
I
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)............. None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering
price)................................................................................ None
Contingent Deferred Sales Charge (as a percentage of original purchase price or
redemption proceeds, as applicable)................................................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)...................... None
Exchange Fee............................................................................ None
<CAPTION>
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C> <C>
Management Fee (after waiver) (1)....................................................... 0.05%
12b-1 Fee............................................................................... None
Total Other Expenses.................................................................... 0.15%
Shareholder Services Fee (after waiver) (2)................................ 0.00%
Total Operating Expenses (3).................................................... 0.20%
<FN>
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
0.20%.
(2) The maximum shareholder services fee is 0.25%.
(3) The total operating expenses would have been 0.60% absent the voluntary
waiver of a portion of the management fee and the shareholder services fee.
</TABLE>
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "INVESTING IN THE FUND" AND "TRUST INFORMATION". WIRE-TRANSFERRED
REDEMPTIONS OF LESS THAN $5,000 MAY BE SUBJECT TO ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and (2)
redemption at the end of each time period............... $2 $6 $11 $26
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
1
GOVERNMENT OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Independent Public Accountants on page 22.
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
--------------------------------------------------------------------
1995 1994 1993 1992 1991 1990(A)
- -------------------------------------------------- ---------- -------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------
Net investment income 0.05 0.03 0.03 0.05 0.07 0.03
- --------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------
Distributions from net investment income (0.05) (0.03) (0.03) (0.05) (0.07) (0.03)
- -------------------------------------------------- ---------- -------- -------- -------- -------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------- ---------- -------- -------- -------- -------- -----------
TOTAL RETURN (B) 5.57% 3.41% 3.22% 4.70% 7.20% 2.80%
- --------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------
Expenses 0.20% 0.20% 0.20% 0.20% 0.20% 0.20%(c)
- --------------------------------------------------
Net investment income 5.58% 3.38% 3.16% 4.55% 6.77% 8.24%(c)
- --------------------------------------------------
Expense waiver/reimbursement (d) 0.40% 0.15% 0.11% 0.12% 0.22% 0.34%(c)
- --------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------
Net assets, end of period (000 omitted) $1,926,516 $763,879 $707,146 $679,533 $331,454 $148,598
- --------------------------------------------------
<FN>
(a) Reflects operations for the period from March 31, 1990, (date of initial
public investment) to July 31, 1990.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
2
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated October 3, 1988. The Declaration of Trust permits the Trust to
offer separate series of shares representing interests in separate portfolios of
securities. The shares in any one portfolio may be offered in separate classes.
With respect to this Fund, as of the date of this prospectus, the Trustees have
established two classes of shares known as Institutional Shares and
Institutional Service Shares. This prospectus relates only to Institutional
Shares of the Fund, which are designed primarily for financial institutions as a
convenient means of accumulating an interest in a professionally managed,
diversified portfolio investing in short-term U.S. government securities. A
minimum initial investment of $25,000 is required.
Eligibility for investment in the Fund is contingent upon an investor
accumulating and maintaining a minimum aggregate investment of $200,000,000 in
Federated funds within a twelve-month period. For this purpose, 1) an investor
is defined as a financial institution or its collective customers, including
affiliate financial institutions and their collective customers, or other
institutions that are determined to qualify by Federated Securities Corp., and
2) Federated funds are those mutual funds which are distributed by Federated
Securities Corp., or are advised by or administered by investment advisers or
administrators affiliated with Federated Securities Corp. ("Federated Funds").
An investor's minimum investment will be calculated by combining all accounts
the investor maintains with the Federated Funds, which includes the Fund.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income consistent
with stability of principal. This investment objective cannot be changed without
shareholder approval. While there is no assurance that the Fund will achieve its
investment objective, it endeavors to do so by following the investment policies
described in this prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing only in a portfolio of
U.S. government securities maturing in thirteen months or less. The average
maturity of the securities in the Fund's portfolio, computed on a
dollar-weighted basis, will be 90 days or less. Unless indicated otherwise, the
investment policies may be changed by the Trustees without shareholder approval.
Shareholders will be notified before any material change in these policies
becomes effective.
3
ACCEPTABLE INVESTMENTS. The Fund invests in U.S. government securities. These
instruments are either issued or guaranteed by the U.S. government, its
agencies, or instrumentalities. These securities include, but are not limited
to:
- direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds; and
- notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as the: Farm Credit System, including the National
Bank for Cooperatives, Farm Credit Banks, and Banks for Cooperatives;
Farmers Home Administration; Federal Home Loan Banks; Federal Home Loan
Mortgage Corporation; Federal National Mortgage Association; Government
National Mortgage Association; and Student Loan Marketing Association.
Some obligations issued or guaranteed by agencies or instrumentalities of the
U.S. government, such as Government National Mortgage Association participation
certificates, are backed by the full faith and credit of the U.S. Treasury. No
assurances can be given that the U.S. government will provide financial support
to other agencies or instrumentalities, since it is not obligated to do so.
These instrumentalities are supported by:
- the issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;
- discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or
- the credit of the agency or instrumentality.
REPURCHASE AGREEMENTS. Certain securities in which the Fund invests may be
purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/dealers, and other recognized financial
institutions sell securities to the Fund and agree at the time of sale to
repurchase them at a mutually agreed upon time and price. To the extent that the
seller does not repurchase the securities from the Fund, the Fund could receive
less than the repurchase price on any sale of such securities.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Fund to miss a price or yield considered to be advantageous. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices.
Accordingly, the Fund may pay more or less than the market value of the
securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the adviser deems it
appropriate to do so. In addition, the Fund may enter into transactions to sell
its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Fund may realize short-term profits or losses upon the sale of such
commitments.
4
LENDING OF PORTFOLIO SECURITIES. In order to generate additional income, the
Fund may lend its portfolio securities on a short-term or long-term basis, or
both, to broker/dealers, banks, or other institutional borrowers of securities.
The Fund will only enter into loan arrangements with broker/ dealers, banks, or
other institutions which the adviser has determined are creditworthy under
guidelines established by the Fund's Trustees and will receive collateral at all
times equal to at least 100% of the value of the securities loaned. There is the
risk that when lending portfolio securities, the securities may not be available
to the Fund on a timely basis and the Fund may, therefore, lose the opportunity
to sell the securities at a desirable price. In addition, in the event that a
borrower of securities would file for bankruptcy or become insolvent,
disposition of the securities may be delayed pending court action.
INVESTMENT LIMITATIONS
The Fund will not borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a money market instrument for a percentage
of its cash value with an agreement to buy it back on a set date) or pledge
securities except, under certain circumstances, the Fund may borrow up to
one-third of the value of its total assets and pledge up to 15% of the value of
its total assets to secure such borrowings.
The above investment limitation cannot be changed without shareholder approval.
The following limitation, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in this limitation becomes effective.
The Fund will not invest more than 10% of its net assets in illiquid securities,
including repurchase agreements providing for settlement in more than seven days
after notice.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Combined Statement of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940, as amended. In particular,
the Fund will comply with the various requirements of Rule 2a-7, which regulates
money market mutual funds. The Fund will determine the effective maturity of its
investments according to Rule 2a-7. The Fund may change these operational
policies to reflect changes in the laws and regulations without the approval of
its shareholders.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the Fund's business affairs and for exercising all
the Trust's powers except those reserved for the shareholders. An Executive
Committee of the Board of Trustees handles the Board's responsibilities between
meetings of the Board.
5
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the Trustees.
The adviser continually conducts investment research and supervision for the
Fund and is responsible for the purchase and sale of portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment advisory fee equal
to .20 of 1% of the Fund's average daily net assets. The adviser has
undertaken to reimburse the Fund up to the amount of the advisory fee for
operating expenses in excess of limitations established by certain states.
The adviser also may voluntarily choose to waive a portion of its fee or
reimburse other expenses of the Fund, but reserves the right to terminate
such waiver or reimbursement at any time at its sole discretion.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services to
a number of investment companies. With over $72 billion invested across more
than 260 funds under management and/or administration by its subsidiaries,
as of December 31, 1994, Federated Investors is one of the largest mutual
fund investment managers in the United States. With more than 1,750
employees, Federated continues to be led by the management who founded the
company in 1955. Federated funds are presently at work in and through 4,000
financial institutions nationwide. More than 100,000 investment
professionals have selected Federated funds for their clients.
Both the Trust and the adviser have adopted strict codes of ethics governing the
conduct of all employees who manage the Fund and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Fund's
shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Trustees, and could
result in severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for Institutional Shares
of the Fund. It is a Pennsylvania corporation organized on November 14, 1969,
and is the principal distributor for a number of investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors.
SHAREHOLDER SERVICES. The Fund has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which the Fund may
6
make payments up to .25 of 1% of the average daily net asset value of the
Institutional Shares, computed at an annual rate, to obtain personal services
for shareholders and provide maintenance of shareholder accounts ("shareholder
services"). From time to time and for such periods as deemed appropriate, the
amount stated above may be reduced voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services will
either perform shareholder services directly or will select financial
institutions fees to perform shareholder services based upon shares owned by
their clients or customers. Financial institutions will receive fees based upon
shares owned by their clients or customers. The schedules of such fees and the
basis upon which such fees will be paid will be determined from time to time by
the Fund and Federated Shareholder Services.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate as specified
below:
<TABLE>
<CAPTION>
MAXIMUM FEE AVERAGE AGGREGATE DAILY NET ASSETS
------------ ----------------------------------------
<S> <C>
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares. Average
aggregate daily net assets include those of all mutual funds advised by
affiliates of Federated Investors. Federated Administrative Services may choose
voluntarily to waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, MA, is custodian for
the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Boston, MA, is transfer agent for the shares of, and dividend disbursing agent
for, the Fund. Federated Services Company is a subsidiary of Federated
Investors.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the Fund
are Arthur Andersen LLP, Pittsburgh, PA.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund attempts to stabilize the net asset value of shares at $1.00 by valuing
the portfolio securities using the amortized cost method. The net asset value
per share is determined by subtracting liabilities attributable to shares from
the value of Fund assets attributable to shares, and dividing the remainder by
the number of shares outstanding. The Fund cannot guarantee that its net asset
value will always remain at $1.00 per share.
7
The net asset value is determined at 12:00 noon, 3:00 p.m. (Eastern time), and
as of the close of trading (normally 4:00 p.m., Eastern time) on the New York
Stock Exchange, Monday through Friday, except on New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares may
be purchased either by wire or mail. The Fund reserves the right to reject any
purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
BY WIRE. To purchase by Federal Reserve wire, call the Fund before 3:00 p.m.
(Eastern time) to place an order. The order is considered received immediately.
Payment by federal funds must be received before 3:00 p.m. (Eastern time) that
day. Federal funds should be wired as follows: Federated Services Company, c/o
State Street Bank and Trust Company, Boston, MA; Attention: EDGEWIRE; For Credit
to: Government Obligations Fund--Institutional Shares; Fund Number (this number
can be found on the account statement or by contacting the Fund); Group Number
or Order Number; Nominee or Institution Name; and ABA Number 011000028.
BY MAIL. To purchase by mail, send a check made payable to Government
Obligations Fund-- Institutional Shares to: Federated Services Company,
Government Obligations Fund, P.O. Box 8600, Boston, MA 02266-8600. Orders by
mail are considered received when payment by check is converted into federal
funds. This is normally the next business day after the check is received.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $25,000. Eligibility for investment in the
Fund is contingent upon an investor accumulating and maintaining a minimum
aggregate investment of $200,000,000 in Federated Funds within a twelve-month
period.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent charges a fee based on the level of subaccounting services
rendered. Financial institutions may charge or pass through subaccounting fees
as part of or in addition to normal trust or agency account fees. They may also
charge fees for other services provided which may be related to the ownership of
Fund shares. This prospectus should, therefore, be read together with any
agreement between the customer and the financial institution with regard to the
services provided, the fees charged for those services, and any restrictions and
limitations
8
imposed. State securities laws may require certain financial institutions such
as depository institutions to register as dealers.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund or Federated Services Company in writing. Monthly
confirmations are sent to report transactions such as all purchases and
redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional shares of the Fund unless cash
payments are requested by writing to the Fund. Shares purchased by wire before
3:00 p.m. (Eastern time) begin earning dividends that day. Shares purchased by
check begin earning dividends the day after the check is converted into federal
funds.
CAPITAL GAINS
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund will distribute in cash or additional shares any realized
net long-term capital gains at least once every 12 months.
REDEEMING SHARES
- --------------------------------------------------------------------------------
Shares are redeemed at their net asset value next determined after Federated
Services Company receives the redemption request. Redemptions will be made on
days on which the Fund computes its net asset value. Redemption requests must be
received in proper form and can be made as described below.
BY MAIL
Shares may be redeemed by sending a written request to: Government Obligations
Fund, Federated Services Company, P.O. Box 8600, Boston, MA 02266-8600. The
written request should state: Government Obligations Fund--Institutional Shares;
shareholder's name; the account number; and the share or dollar amount
requested. Sign the request exactly as the shares are registered. Shareholders
should call the Fund for assistance in redeeming by mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or overnight insured mail with the written request
to Federated Services Company, 500 Victory Road-2nd Floor, North Quincy, MA
02171.
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Fund, or a redemption payable other than to
the shareholder of record must have their signatures guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
9
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and the transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of the
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Fund. Telephone instructions may be
recorded and if reasonable procedures are not followed by the Fund, it may be
liable for losses due to unauthorized or fraudulent telephone instructions. An
authorization form permitting the Fund to accept telephone requests must first
be completed. Authorization forms and information on this service are available
from Federated Securities Corp.
If the redemption request is received before 3:00 p.m. (Eastern time), the
proceeds will be wired the same day to the shareholder's account at a domestic
commercial bank which is a member of the Federal Reserve System, and those
shares redeemed will not be entitled to that day's dividend. A daily dividend
will be paid on shares redeemed if the redemption request is received after 3:00
p.m. (Eastern time). However, the proceeds are not wired until the following
business day. Under limited circumstances, arrangements may be made with the
distributor for same-day payment of proceeds, without that day's dividend, for
redemption requests received before 3:00 p.m. (Eastern time).
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail", should be considered. If at any time
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required mini-
mum value of $25,000, or the aggregate investment in Federated Funds falls below
the required minimum of $200,000,000 to be maintained from and after twelve
months from account opening, due to shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
10
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights, except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder approval will be
sought only for certain changes in the Trust's or the Fund's operation and for
the election of Trustees under certain circumstances. As of September 6, 1995,
Putnam Trust Company, Greenwich, CT, owned approximately 118,529,400 shares
(34.82%) of the voting securities of the Fund's Institutional Service Shares
and, therefore, may, for certain purposes, be deemed to control the Fund and be
able to affect the outcome of certain matters presented for a vote of
shareholders.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders for this purpose shall be called by the
Trustees upon the written request of shareholders owning at least 10% of the
outstanding shares of the Trust.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code applicable to regulated investment companies and to
receive the special tax treatment afforded to such companies. The Fund will be
treated as a single, separate entity for federal income tax purposes so that
income (including capital gains) and losses realized by the Trust's other
portfolios will not be combined for tax purposes with those realized by the
Fund.
11
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies whether dividends
and distributions are received in cash or as additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston, & Donnelly, counsel to the Trust, Fund
shares may be subject to personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania to the extent that the
portfolio securities in the Fund would be subject to such taxes if owned
directly by residents of those jurisdictions.
OTHER STATE AND LOCAL TAXES. Shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax laws.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
The Fund also offers another class of shares called Institutional Service
Shares. Institutional Service Shares are sold at net asset value primarily to
accounts for which financial institutions act in an agency or fiduciary capacity
and are subject to a minimum initial investment of $25,000.
All classes are subject to certain of the same expenses.
Institutional Service Shares are distributed with no 12b-1 fees but are subject
to shareholder services fees.
Expense differences between classes may affect the performance of each class.
To obtain more information and a prospectus for any other class investors may
call 1-800-235-4669.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time, the Fund advertises its yield and effective yield for shares.
Performance figures will be calculated separately for each class of shares.
Yield represents the annualized rate of income earned on an investment over a
seven-day period. It is the annualized dividends earned during the period on an
investment shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but when annualized, the income earned by an
investment is assumed to be reinvested daily. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.
Advertisements and sales literature may also refer to total return. Total return
represents the change, over a specified period of time, in the value of an
investment in the shares after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
12
GOVERNMENT OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT VALUE
- ---------------- ------------------------------------------------------------ --------------
<C> <S> <C>
SHORT-TERM OBLIGATIONS--31.1%
- -------------------------------------------------------------------------------
$ 11,000,000 (a) FEDERAL FARM CREDIT BANK, DISCOUNT NOTES--0.5%
------------------------------------------------------------
6.578%, 2/23/1996 $ 10,611,633
------------------------------------------------------------ --------------
78,280,000 (a) FEDERAL HOME LOAN BANK, DISCOUNT NOTES--3.4%
------------------------------------------------------------
6.229%-7.00%, 11/2/1995-1/16/1996 76,473,379
------------------------------------------------------------ --------------
78,500,000 (b) FEDERAL HOME LOAN BANK, FLOATING RATE NOTES--3.5%
------------------------------------------------------------
5.715%-5.790%, 8/1/95 78,449,946
------------------------------------------------------------ --------------
63,500,000 (a) FEDERAL HOME LOAN BANK, DISCOUNT NOTES--2.8%
------------------------------------------------------------
6.015%-6.850%, 2/28/1996-6/13/1996 63,554,612
------------------------------------------------------------ --------------
13,165,000 (a) FEDERAL HOME LOAN MORTGAGE CORP., DISCOUNT NOTES--0.6%
------------------------------------------------------------
6.798%-7.013%, 11/1/1995-2/8/1996 12,837,593
------------------------------------------------------------ --------------
16,500,000 (b) FEDERAL HOME LOAN MORTGAGE CORP., FLOATING RATE NOTES--0.7%
------------------------------------------------------------
5.720%, 8/1/95 16,499,593
------------------------------------------------------------ --------------
246,920,000 (a) FEDERAL NATIONAL MORTGAGE ASSOCIATION, DISCOUNT NOTES--10.6%
------------------------------------------------------------
5.755%-6.399%, 8/17/1995-4/15/1996 241,643,739
------------------------------------------------------------ --------------
50,000,000 (b) FEDERAL NATIONAL MORTGAGE ASSOCIATION, FLOATING RATE NOTES--
2.2%
------------------------------------------------------------
5.740%-5.880%, 8/1/95 49,995,969
------------------------------------------------------------ --------------
11,000,000 (a) FEDERAL NATIONAL MORTGAGE ASSOCIATION, DISCOUNT NOTES--0.5%
------------------------------------------------------------
5.500%, 6/12/1996 10,961,811
------------------------------------------------------------ --------------
8,000,000 (a) STUDENT LOAN MARKETING ASSOCIATION, DISCOUNT NOTES--0.4%
------------------------------------------------------------
6.752%, 2/21/1996 8,007,761
------------------------------------------------------------ --------------
55,230,000 (b) STUDENT LOAN MARKETING ASSOCIATION, FLOATING RATE
NOTES--2.4%
------------------------------------------------------------
5.790%-6.040%, 8/7/95 55,243,249
------------------------------------------------------------ --------------
34,500,000 (a) U.S. TREASURY BILLS--1.5%
------------------------------------------------------------
5.270%-6.505%, 8/24/1995-6/27/1996 33,583,557
------------------------------------------------------------ --------------
</TABLE>
13
GOVERNMENT OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT VALUE
- ---------------- ------------------------------------------------------------ --------------
<C> <S> <C>
SHORT-TERM OBLIGATIONS--CONTINUED
- -------------------------------------------------------------------------------
$ 45,000,000 U.S. TREASURY NOTES--2.0%
------------------------------------------------------------
7.750%-9.250%, 1/15/1996-3/31/1996 $ 45,653,539
------------------------------------------------------------ --------------
TOTAL SHORT-TERM OBLIGATIONS 703,516,381
------------------------------------------------------------ --------------
(C) REPURCHASE AGREEMENTS--70.9%
- -------------------------------------------------------------------------------
335,000,000 BT Securities Corp., 5.840%, dated 7/31/1995, due 8/1/1995 335,000,000
------------------------------------------------------------
27,200,000 BZW Securities, Inc., 5.840%, dated 7/31/1995, due 8/1/1995 27,200,000
------------------------------------------------------------
50,000,000 Deutsche Bank Government Securities, Inc., 5.850%, dated
7/31/1995, due 8/1/1995 50,000,000
------------------------------------------------------------
40,000,000 Deutsche Bank Government Securities, Inc., 5.870%, dated
7/31/1995, due 8/1/1995 40,000,000
------------------------------------------------------------
240,000,000 Goldman, Sachs and Co., 5.870%, dated 7/31/1995, due
8/1/1995 240,000,000
------------------------------------------------------------
110,000,000 HSBC Securities, Inc., 5.870%, dated 7/31/1995, due 8/1/1995 110,000,000
------------------------------------------------------------
110,000,000 Harris, Nesbitt, Thomson Securities, Inc., 5.820%, dated
7/31/1995, due 8/1/1995 110,000,000
------------------------------------------------------------
25,000,000 J.P. Morgan Securities, Inc., 5.870%, dated 7/31/1995, due
8/1/1995 25,000,000
------------------------------------------------------------
110,000,000 Lehman Government Securities, Inc., 5.850%, dated 7/31/1995,
due 8/1/1995 110,000,000
------------------------------------------------------------
100,000,000 Nomura Securities Intenational, Inc., 5.860%, dated
7/31/1995, due 8/1/1995 100,000,000
------------------------------------------------------------
110,000,000 Smith Barney, Inc., 5.870%, dated 7/31/1995, due 8/1/1995 110,000,000
------------------------------------------------------------
80,000,000 Swiss Bank Capital Markets, 5.840%, dated 7/31/1995, due
8/1/1995 80,000,000
------------------------------------------------------------
110,000,000 UBS Securities, Inc., 5.800%, dated 7/31/1995, due 8/1/1995 110,000,000
------------------------------------------------------------
43,000,000 (d) CS First Boston Corp., 5.770%, dated 7/14/1995, due
8/14/1995 43,000,000
------------------------------------------------------------
28,000,000 (d) CS First Boston Corp., 5.800%, dated 7/7/1995, due 8/7/1995 28,000,000
------------------------------------------------------------
45,000,000 (d) Goldman, Sachs & Co., 5.750%, dated 7/7/1995, due 9/5/1995 45,000,000
------------------------------------------------------------
44,000,000 (d) Goldman, Sachs & Co., 5.750%, dated 7/25/1995, due
10/23/1995 44,000,000
------------------------------------------------------------ --------------
TOTAL REPURCHASE AGREEMENTS 1,607,200,000
------------------------------------------------------------ --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (E) $2,310,716,381
------------------------------------------------------------ --------------
--------------
</TABLE>
14
GOVERNMENT OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
<FN>
(a) Each issue shows the rate of discount at time of purchase.
(b) Current rate and next demand date shown.
(c) Repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated funds.
(d) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($2,265,621,228) at July 31, 1995.
</TABLE>
(See Notes which are an integral part of the Financial Statements.)
15
GOVERNMENT OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------------------------------------------
Investments in repurchase agreements $1,607,200,000
- ----------------------------------------------------------------------------------------------------
Investments in securities 703,516,381
- ---------------------------------------------------------------------------------------------------- --------------
</TABLE>
<TABLE>
<S> <C>
Total investments in securities, at amortized cost and value $2,310,716,381
- --------------------------------------------------------------------------------------------------------------------
Cash 1,277,143
- --------------------------------------------------------------------------------------------------------------------
Income receivable 4,063,752
- --------------------------------------------------------------------------------------------------------------------
Receivable for shares sold 50,790
- -------------------------------------------------------------------------------------------------------------------- --------------
Total assets 2,316,108,066
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
LIABILITIES:
- --------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 33,980,946
- ----------------------------------------------------------------------------------------------------
Payable for shares redeemed 8,642,732
- ----------------------------------------------------------------------------------------------------
Income distribution payable 7,242,088
- ----------------------------------------------------------------------------------------------------
Accrued expenses 621,072
- ---------------------------------------------------------------------------------------------------- --------------
</TABLE>
<TABLE>
<S> <C>
Total liabilities 50,486,838
- -------------------------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 2,265,621,228 shares outstanding $2,265,621,228
- -------------------------------------------------------------------------------------------------------------------- --------------
--------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- --------------------------------------------------------------------------------------------------------------------
Institutional Shares:
- --------------------------------------------------------------------------------------------------------------------
($1,926,515,833 DIVIDED BY 1,926,515,833 shares outstanding) $ 1.00
- -------------------------------------------------------------------------------------------------------------------- --------------
Institutional Service Shares:
- --------------------------------------------------------------------------------------------------------------------
($339,105,395 DIVIDED BY 339,105,395 shares outstanding) $ 1.00
- -------------------------------------------------------------------------------------------------------------------- --------------
--------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
16
GOVERNMENT OBLIGATIONS FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------------------
Interest $82,570,212
- -------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------
Investment advisory fee $2,842,786
- -----------------------------------------------------------------------
Administrative personnel and services fee 1,075,995
- -----------------------------------------------------------------------
Custodian fees 164,968
- -----------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 51,116
- -----------------------------------------------------------------------
Directors'/Trustees' fees 8,207
- -----------------------------------------------------------------------
Auditing fees 11,809
- -----------------------------------------------------------------------
Legal fees 4,496
- -----------------------------------------------------------------------
Portfolio accounting fees 149,536
- -----------------------------------------------------------------------
Shareholder services fee--Institutional Shares 3,183,649
- -----------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 369,663
- -----------------------------------------------------------------------
Share registration costs 561,996
- -----------------------------------------------------------------------
Printing and postage 23,120
- -----------------------------------------------------------------------
Insurance premiums 16,366
- -----------------------------------------------------------------------
Taxes 6,980
- -----------------------------------------------------------------------
Miscellaneous 4,704
- ----------------------------------------------------------------------- ----------
Total expenses 8,475,391
- -----------------------------------------------------------------------
Deduct--
- -----------------------------------------------------------------------
Waiver of investment advisory fee $2,063,842
- ----------------------------------------------------------
Waiver of shareholder services fee-Institutional Shares 3,183,649 5,247,491
- ---------------------------------------------------------- ---------- ----------
Net expenses 3,227,900
- ------------------------------------------------------------------------------------- -----------
Net investment income $79,342,312
- ------------------------------------------------------------------------------------- -----------
-----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
17
GOVERNMENT OBLIGATIONS FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------------------
1995 1994
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------
Net investment income $ 79,342,312 $ 22,768,833
- ----------------------------------------------------------------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------------------
Distributions from net investment income:
- -----------------------------------------------------------------------
Institutional Shares (71,018,165) (22,768,833)
- -----------------------------------------------------------------------
Institutional Service Shares (8,324,147) 0
- ----------------------------------------------------------------------- --------------- ---------------
Change in net assets resulting from distributions to shareholders (79,342,312) (22,768,833)
- ----------------------------------------------------------------------- --------------- ---------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------------------
Proceeds from sale of Shares 8,123,000,879 3,045,297,053
- -----------------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment of
distributions declared 19,779,451 1,181,007
- -----------------------------------------------------------------------
Cost of Shares redeemed (6,641,037,966) (2,989,745,626)
- ----------------------------------------------------------------------- --------------- ---------------
Change in net assets resulting from share transactions 1,501,742,364 56,732,434
- ----------------------------------------------------------------------- --------------- ---------------
Change in net assets 1,501,742,364 56,732,434
- -----------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------
Beginning of period 763,878,864 707,146,430
- ----------------------------------------------------------------------- --------------- ---------------
End of period $ 2,265,621,228 $ 763,878,864
- ----------------------------------------------------------------------- --------------- ---------------
--------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
18
GOVERNMENT OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
1. ORGANIZATION
Money Market Obligations 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 six diversified portfolios. The
financial statements included herein are only those of Government Obligations
Fund (the "Fund"). The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held. The
Fund offers two classes of shares: Institutional Shares and Institutional
Service Shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the custodian
bank to take possession, to have legally segregated in the Federal Reserve
Book Entry System, or to have segregated within the custodian bank's vault,
all securities held as collateral under repurchase agreement transactions.
Additionally, procedures have been established by the Fund to monitor, on a
daily basis, the market value of each repurchase agreement's collateral to
ensure that the value of collateral at least equals the repurchase price to
be paid under the repurchase agreement transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less
than the repurchase price on the sale of collateral securities.
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.
19
GOVERNMENT OBLIGATIONS FUND
- --------------------------------------------------------------------------------
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.
OTHER--Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At July 31, 1995, capital paid-in aggregated $2,265,621,228.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
---------------------------------
1995 1994
--------------- ---------------
INSTITUTIONAL SHARES
- ---------------------------------------------------------------
<S> <C> <C>
Shares sold 7,200,004,553 3,045,297,053
- ---------------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 16,152,849 1,181,007
- ---------------------------------------------------------------
Shares redeemed (6,053,520,182) (2,989,745,626)
- --------------------------------------------------------------- --------------- ---------------
Net change resulting from Institutional share transactions 1,162,637,220 56,732,434
- --------------------------------------------------------------- --------------- ---------------
--------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
---------------------------------
1995(a) 1994
--------------- ---------------
INSTITUTIONAL SERVICE SHARES
- ---------------------------------------------------------------
<S> <C> <C>
Shares sold 922,996,326 --
- ---------------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 3,626,602 --
- ---------------------------------------------------------------
Shares redeemed (587,517,784) --
- --------------------------------------------------------------- --------------- ---------------
Net change resulting from Institutional Service share
transactions 339,105,144 --
- --------------------------------------------------------------- --------------- ---------------
Net change resulting from Fund share transactions 1,501,742,364 56,732,434
- --------------------------------------------------------------- --------------- ---------------
--------------- ---------------
<FN>
(a) Reflects operations for the period from August 1, 1994 (date of initial
public investment) to July 31, 1995.
</TABLE>
20
GOVERNMENT OBLIGATIONS FUND
- --------------------------------------------------------------------------------
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment
adviser, (the "Adviser"), receives for its services an annual investment
advisory fee equal to .20 of 1% of the Fund's average daily net assets. The
Adviser may voluntarily choose to waive a portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), provides the
Fund with administrative personnel and services. The FAS fee is based on the
level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during the period of the Administrative Services Agreement shall be
at least $125,000 per portfolio and $30,000 per each additional class of
shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Fund will pay FSS
up to .25 of 1% of average daily net assets of the Fund for the period. This
fee is to obtain certain services for shareholders and to maintain
shareholder accounts. FSS may voluntarily chose to waive a portion of its
fee. FSS can modify or terminate this voluntary waiver at any time at its
sole discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent
for the Fund. The fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level of the
Fund's average daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
21
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
MONEY MARKET OBLIGATIONS TRUST
(Government Obligations Fund):
We have audited the accompanying statement of assets and liabilities of
Government Obligations Fund (an investment portfolio of Money Market Obligations
Trust, a Massachusetts business trust), including the schedule of portfolio
investments, as of July 31, 1995, the related statement of operations for the
year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of July
31, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Government Obligations Fund (an investment portfolio of Money Market Obligations
Trust) as of July 31, 1995, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for the periods presented, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
September 8, 1995
22
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Government Obligations Fund
Institutional Shares Federated Investors Tower
Pittsburgh, PA 15222-3779
- -------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, PA 15222-3779
- -------------------------------------------------------------------------------------------
Investment Advisor
Federated Management Federated Investors Tower
Pittsburgh, PA 15222-3779
- -------------------------------------------------------------------------------------------
Custodian
State Street Bank and Trust Company P.O. Box 8600
Boston, MA 02266-8600
- -------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, MA 02266-8600
- -------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, PA 15222
- -------------------------------------------------------------------------------------------
</TABLE>
23
- --------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS
FUND
(A PORTFOLIO OF MONEY MARKET
OBLIGATIONS TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
A Diversified Portfolio of
Money Market Obligations Trust,
an Open-End Management
Investment Company
Prospectus dated September 30, 1995
[LOGO] FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 60934N104
G01066-01 (9/95) [RECYCLED PAPER LOGO]
- --------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
The Institutional Service Shares of Government Obligations Fund (the
"Fund") offered by this prospectus represent interests in a
diversified portfolio of Money Market Obligations Trust (the "Trust"),
an open-end management investment company (a mutual fund). The Fund
invests in U.S. government securities to provide current income
consistent with stability of principal.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS
OF ANY BANK, ARE NOT ENDORSED OR 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 THESE SHARES INVOLVES INVESTMENT
RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE FUND ATTEMPTS TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN BE NO
ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and know
before you invest in the Fund. Keep this prospectus for future
reference.
The Fund has also filed a Combined Statement of Additional Information
dated September 30, 1995, with the Securities and Exchange Commission.
The information contained in the Combined Statement of Additional
Information is incorporated by reference into this prospectus. You may
request a copy of the Combined Statement of Additional Information,
which is in paper form only, or a paper copy of this prospectus, if
you have received your prospectus electronically, free of charge by
calling 1-800-235-4669. To obtain other information, or make inquiries
about the Fund, contact the Fund at the address listed in the back of
this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated September 30, 1995
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SUMMARY OF FUND EXPENSES 1
- --------------------------------------------------
FINANCIAL HIGHLIGHTS--INSTITUTIONAL
SERVICE SHARES 2
- --------------------------------------------------
GENERAL INFORMATION 3
- --------------------------------------------------
INVESTMENT INFORMATION 3
- --------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Limitations 5
Regulatory Compliance 5
TRUST INFORMATION 5
- --------------------------------------------------
Management of the Trust 5
Distribution of Shares 6
Administration of the Fund 7
NET ASSET VALUE 7
- --------------------------------------------------
INVESTING IN THE FUND 8
- --------------------------------------------------
Share Purchases 8
Minimum Investment Required 8
Subaccounting Services 8
Certificates and Confirmations 9
Dividends 9
Capital Gains 9
REDEEMING SHARES 9
- --------------------------------------------------
By Mail 9
Telephone Redemption 10
Accounts with Low Balances 11
SHAREHOLDER INFORMATION 11
- --------------------------------------------------
Voting Rights 11
Massachusetts Partnership Law 11
TAX INFORMATION 12
- --------------------------------------------------
Federal Income Tax 12
Pennsylvania Corporate and Personal
Property Taxes 12
OTHER CLASSES OF SHARES 12
- --------------------------------------------------
PERFORMANCE INFORMATION 12
- --------------------------------------------------
FINANCIAL STATEMENTS 14
- --------------------------------------------------
INDEPENDENT AUDITORS' REPORT 23
- --------------------------------------------------
ADDRESSES 24
- --------------------------------------------------
</TABLE>
I
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SERVICE SHARES
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)............. None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering
price)................................................................................ None
Contingent Deferred Sales Charge (as a percentage of original purchase price or
redemption proceeds, as applicable)................................................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)...................... None
Exchange Fee............................................................................ None
<CAPTION>
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C> <C>
Management Fee (after waiver) (1)....................................................... 0.05%
12b-1 Fee............................................................................... None
Total Other Expenses.................................................................... 0.40%
Shareholder Services Fee................................................... 0.25%
Total Operating Expenses (2).................................................... 0.45%
<FN>
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
0.20%.
(2) The total operating expenses would have been 0.60% absent the voluntary
waiver of a portion of the management fee.
</TABLE>
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL SERVICE SHARES OF
THE FUND WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE
DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES, SEE "INVESTING IN THE FUND" AND
"TRUST INFORMATION". WIRE-TRANSFERRED REDEMPTIONS OF LESS THAN $5,000 MAY BE
SUBJECT TO ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and (2)
redemption at the end of each time period............... $5 $14 $25 $57
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
1
GOVERNMENT OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
Reference is made to the Report of Independent Public Accountants on page 23.
<TABLE>
<CAPTION>
PERIOD ENDED
JULY 31,
1995(A)
- -------------------------------------------------------------- ------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00
- --------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------
Net investment income 0.05
- --------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------
Distributions from net investment income (0.05)
- -------------------------------------------------------------- ------------
NET ASSET VALUE, END OF PERIOD $1.00
- -------------------------------------------------------------- ------------
------------
TOTAL RETURN (B) 5.31%
- --------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------
Expenses 0.45%(c)
- --------------------------------------------------------------
Net investment income 5.63%(c)
- --------------------------------------------------------------
Expense waiver/reimbursement (d) 0.15%(c)
- --------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------
Net assets, end of period (000 omitted) $339,105
- --------------------------------------------------------------
<FN>
(a) Reflects operations for the period from August 1, 1994, (date of initial
public investment) to July 31, 1995. For the period from the effective
date, July 5, 1994 to July 31, 1994, all net investment income was
distributed to the Fund's adviser.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
2
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated October 3, 1988. The Declaration of Trust permits the Trust to
offer separate series of shares representing interests in separate portfolios of
securities. The shares in any one portfolio may be offered in separate classes.
With respect to this Fund, as of the date of this prospectus, the Trustees have
established two classes of shares known as Institutional Shares and
Institutional Service Shares. This prospectus relates only to Institutional
Service Shares of the Fund, which are designed primarily for financial
institutions as a convenient means of accumulating an interest in a
professionally managed, diversified portfolio investing in short-term U.S.
government securities. A minimum initial investment of $25,000 is required.
Eligibility for investment in the Fund is contingent upon an investor
accumulating and maintaining a minimum aggregate investment of $200,000,000 in
Federated funds within a twelve-month period. For this purpose, 1) an investor
is defined as a financial institution or its collective customers, including
affiliate financial institutions and their collective customers, or other
institutions that are determined to qualify by Federated Securities Corp., and
2) Federated funds are those mutual funds which are distributed by Federated
Securities Corp., or are advised by or administered by investment advisers or
administrators affiliated with Federated Securities Corp. ("Federated Funds").
An investor's minimum investment will be calculated by combining all accounts
the investor maintains with the Federated Funds, which includes the Fund.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income consistent
with stability of principal. This investment objective cannot be changed without
shareholder approval. While there is no assurance that the Fund will achieve its
investment objective, it endeavors to do so by following the investment policies
described in this prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing only in a portfolio of
U.S. government securities maturing in thirteen months or less. The average
maturity of the securities in the Fund's portfolio, computed on a
dollar-weighted basis, will be 90 days or less. Unless indicated otherwise, the
investment policies may be changed by the Trustees without shareholder approval.
Shareholders will be notified before any material change in these policies
becomes effective.
3
ACCEPTABLE INVESTMENTS. The Fund invests in U.S. government securities. These
instruments are either issued or guaranteed by the U.S. government, its
agencies, or instrumentalities. These securities include, but are not limited
to:
- direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds; and
- notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as the: Farm Credit System, including the National
Bank for Cooperatives, Farm Credit Banks, and Banks for Cooperatives;
Farmers Home Administration; Federal Home Loan Banks; Federal Home Loan
Mortgage Corporation; Federal National Mortgage Association; Government
National Mortgage Association; and Student Loan Marketing Association.
Some obligations issued or guaranteed by agencies or instrumentalities of the
U.S. government, such as Government National Mortgage Association participation
certificates, are backed by the full faith and credit of the U.S. Treasury. No
assurances can be given that the U.S. government will provide financial support
to other agencies or instrumentalities, since it is not obligated to do so.
These instrumentalities are supported by:
- the issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;
- discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or
- the credit of the agency or instrumentality.
REPURCHASE AGREEMENTS. Certain securities in which the Fund invests may be
purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/dealers, and other recognized financial
institutions sell securities to the Fund and agree at the time of sale to
repurchase them at a mutually agreed upon time and price. To the extent that the
seller does not repurchase the securities from the Fund, the Fund could receive
less than the repurchase price on any sale of such securities.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Fund to miss a price or yield considered to be advantageous. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices.
Accordingly, the Fund may pay more or less than the market value of the
securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the adviser deems it
appropriate to do so. In addition, the Fund may enter into transactions to sell
its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Fund may realize short-term profits or losses upon the sale of such
commitments.
4
LENDING OF PORTFOLIO SECURITIES. In order to generate additional income, the
Fund may lend its portfolio securities on a short-term or long-term basis, or
both, to broker/dealers, banks, or other institutional borrowers of securities.
The Fund will only enter into loan arrangements with broker/ dealers, banks, or
other institutions which the adviser has determined are creditworthy under
guidelines established by the Fund's Trustees and will receive collateral at all
times equal to at least 100% of the value of the securities loaned. There is the
risk that when lending portfolio securities, the securities may not be available
to the Fund on a timely basis and the Fund may, therefore, lose the opportunity
to sell the securities at a desirable price. In addition, in the event that a
borrower of securities would file for bankruptcy or become insolvent,
disposition of the securities may be delayed pending court action.
INVESTMENT LIMITATIONS
The Fund will not borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a money market instrument for a percentage
of its cash value with an agreement to buy it back on a set date) or pledge
securities except, under certain circumstances, the Fund may borrow up to
one-third of the value of its total assets and pledge up to 15% of the value of
its total assets to secure such borrowings.
The above investment limitation cannot be changed without shareholder approval.
The following limitation, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in this limitation becomes effective.
The Fund will not invest more than 10% of its net assets in illiquid securities,
including repurchase agreements providing for settlement in more than seven days
after notice.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Combined Statement of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940, as amended. In particular,
the Fund will comply with the various requirements of Rule 2a-7, which regulates
money market mutual funds. The Fund will determine the effective maturity of its
investments according to Rule 2a-7. The Fund may change these operational
policies to reflect changes in the laws and regulations without the approval of
its shareholders.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the Fund's business affairs and for exercising all
the Trust's powers except those reserved for the shareholders. An Executive
Committee of the Board of Trustees handles the Board's responsibilities between
meetings of the Board.
5
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the Trustees.
The adviser continually conducts investment research and supervision for the
Fund and is responsible for the purchase and sale of portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment advisory fee equal
to .20 of 1% of the Fund's average daily net assets. The adviser has
undertaken to reimburse the Fund up to the amount of the advisory fee for
operating expenses in excess of limitations established by certain states.
The adviser also may voluntarily choose to waive a portion of its fee or
reimburse other expenses of the Fund, but reserves the right to terminate
such waiver or reimbursement at any time at its sole discretion.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services to
a number of investment companies. With over $72 billion invested across more
than 260 funds under management and/or administration by its subsidiaries,
as of December 31, 1994, Federated Investors is one of the largest mutual
fund investment managers in the United States. With more than 1,750
employees, Federated continues to be led by the management who founded the
company in 1955. Federated funds are presently at work in and through 4,000
financial institutions nationwide. More than 100,000 investment
professionals have selected Federated funds for their clients.
Both the Trust and the adviser have adopted strict codes of ethics governing the
conduct of all employees who manage the Fund and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Fund's
shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Trustees, and could
result in severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for Institutional
Service Shares of the Fund. It is a Pennsylvania corporation organized on
November 14, 1969, and is the principal distributor for a number of investment
companies. Federated Securities Corp. is a subsidiary of Federated Investors.
SHAREHOLDER SERVICES. The Fund has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which the Fund may
6
make payments up to .25 of 1% of the average daily net asset value of the
Institutional Service Shares, computed at an annual rate, to obtain personal
services for shareholders and provide maintenance of shareholder accounts
("shareholder services"). From time to time and for such periods as deemed
appropriate, the amount stated above may be reduced voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services will
either perform shareholder services directly or will select financial
institutions fees to perform shareholder services based upon shares owned by
their clients or customers. Financial institutions will receive fees based upon
shares owned by their clients or customers. The schedules of such fees and the
basis upon which such fees will be paid will be determined from time to time by
the Fund and Federated Shareholder Services.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate as specified
below:
<TABLE>
<CAPTION>
MAXIMUM FEE AVERAGE AGGREGATE DAILY NET ASSETS
----------- ----------------------------------------
<C> <S>
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares. Average
aggregate daily net assets include those of all mutual funds advised by
affiliates of Federated Investors. Federated Administrative Services may choose
voluntarily to waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, MA, is custodian for
the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Boston, MA, is transfer agent for the shares of, and dividend disbursing agent
for, the Fund. Federated Services Company is a subsidiary of Federated
Investors.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the Fund
are Arthur Andersen LLP, Pittsburgh, PA.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund attempts to stabilize the net asset value of shares at $1.00 by valuing
the portfolio securities using the amortized cost method. The net asset value
per share is determined by subtracting liabilities attributable to shares from
the value of Fund assets attributable to shares, and dividing the remainder
7
by the number of shares outstanding. The Fund cannot guarantee that its net
asset value will always remain at $1.00 per share.
The net asset value is determined at 12:00 noon, 3:00 p.m. (Eastern time), and
as of the close of trading (normally 4:00 p.m., Eastern time) on the New York
Stock Exchange, Monday through Friday, except on New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares may
be purchased either by wire or mail. The Fund reserves the right to reject any
purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
BY WIRE. To purchase by Federal Reserve wire, call the Fund before 3:00 p.m.
(Eastern time) to place an order. The order is considered received immediately.
Payment by federal funds must be received before 3:00 p.m. (Eastern time) that
day. Federal funds should be wired as follows: Federated Services Company, c/o
State Street Bank and Trust Company, Boston, MA; Attention: EDGEWIRE; For Credit
to: Government Obligations Fund--Institutional Service Shares; Fund Number (this
number can be found on the account statement or by contacting the Fund); Group
Number or Order Number; Nominee or Institution Name; and ABA Number 011000028.
BY MAIL. To purchase by mail, send a check made payable to Government
Obligations Fund-- Institutional Service Shares to: Federated Services Company,
Government Obligations Fund, P.O. Box 8600, Boston, MA 02266-8600. Orders by
mail are considered received when payment by check is converted into federal
funds. This is normally the next business day after the check is received.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $25,000. Eligibility for investment in the
Fund is contingent upon an investor accumulating and maintaining a minimum
aggregate investment of $200,000,000 in Federated Funds within a twelve-month
period.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent charges a fee based on the level of subaccounting services
rendered. Financial institutions may charge or pass through subaccounting fees
as part of or in addition to normal trust or agency account fees. They may also
charge fees for other services
8
provided which may be related to the ownership of Fund shares. This prospectus
should, therefore, be read together with any agreement between the customer and
the financial institution with regard to the services provided, the fees charged
for those services, and any restrictions and limitations imposed. State
securities laws may require certain financial institutions such as depository
institutions to register as dealers.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases and
redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional shares of the Fund unless cash
payments are requested by writing to the Fund. Shares purchased by wire before
3:00 p.m. (Eastern time) begin earning dividends that day. Shares purchased by
check begin earning dividends the day after the check is converted into federal
funds.
CAPITAL GAINS
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund will distribute in cash or additional shares any realized
net long-term capital gains at least once every 12 months.
REDEEMING SHARES
- --------------------------------------------------------------------------------
Shares are redeemed at their net asset value next determined after Federated
Services Company receives the redemption request. Redemptions will be made on
days on which the Fund computes its net asset value. Redemption requests must be
received in proper form and can be made as described below.
BY MAIL
Shares may be redeemed by sending a written request to: Government Obligations
Fund, Federated Services Company, P.O. Box 8600, Boston, MA 02266-8600. The
written request should state: Government Obligations Fund--Institutional Service
Shares; shareholder's name; the account number; and the share or dollar amount
requested. Sign the request exactly as the shares are registered. Shareholders
should call the Fund for assistance in redeeming by mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or overnight insured mail with the written request
to Federated Services Company, 500 Victory Road--2nd Floor, North Quincy, MA
02171.
9
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Fund, or a redemption payable other than to
the shareholder of record must have their signatures guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and the transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of the
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Fund. Telephone instructions may be
recorded and if reasonable procedures are not followed by the Fund, it may be
liable for losses due to unauthorized or fraudulent telephone instructions. An
authorization form permitting the Fund to accept telephone requests must first
be completed. Authorization forms and information on this service are available
from Federated Securities Corp.
If the redemption request is received before 3:00 p.m. (Eastern time), the
proceeds will be wired the same day to the shareholder's account at a domestic
commercial bank which is a member of the Federal Reserve System, and those
shares redeemed will not be entitled to that day's dividend. A daily dividend
will be paid on shares redeemed if the redemption request is received after 3:00
p.m. (Eastern time). However, the proceeds are not wired until the following
business day. Under limited circumstances, arrangements may be made with the
distributor for same-day payment of proceeds, without that day's dividend, for
redemption requests received before 3:00 p.m. (Eastern time).
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail", should be considered. If at any time
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
10
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000, or the
aggregate investment in Federated Funds falls below the required minimum of
$200,000,000 to be maintained from and after twelve months from account opening,
due to shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights, except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder approval will be
sought only for certain changes in the Trust's or the Fund's operation and for
the election of Trustees under certain circumstances. As of September 6, 1995,
Putnam Trust Company, Greenwich, CT, owned approximately 118,529,400 shares
(34.82%) of the voting securities of the Fund's Institutional Service Shares
and, therefore, may, for certain purposes, be deemed to control the Fund and be
able to affect the outcome of certain matters presented for a vote of
shareholders.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders for this purpose shall be called by the
Trustees upon the written request of shareholders owning at least 10% of the
outstanding shares of the Trust.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.
11
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code applicable to regulated investment companies and to
receive the special tax treatment afforded to such companies. The Fund will be
treated as a single, separate entity for federal income tax purposes so that
income (including capital gains) and losses realized by the Trust's other
portfolios will not be combined for tax purposes with those realized by the
Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies whether dividends
and distributions are received in cash or as additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston, & Donnelly, counsel to the Trust, Fund
shares may be subject to personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania to the extent that the
portfolio securities in the Fund would be subject to such taxes if owned
directly by residents of those jurisdictions.
OTHER STATE AND LOCAL TAXES. Shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax laws.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
The Fund also offers another class of shares called Institutional Shares.
Institutional Shares are sold at net asset value primarily to accounts for which
financial institutions act in an agency or fiduciary capacity and are subject to
a minimum initial investment of $25,000.
All classes are subject to certain of the same expenses.
Institutional Shares are distributed with no 12b-1 fees. Currently,
Institutional Shares are accruing no shareholder services fees.
Expense differences between classes may affect the performance of each class.
To obtain more information and a prospectus for any other class investors may
call 1-800-235-4669.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time, the Fund advertises its yield and effective yield for shares.
Performance figures will be calculated separately for each class of shares.
Yield represents the annualized rate of income earned on an investment over a
seven-day period. It is the annualized dividends earned during the period on an
investment shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but when annualized, the income
12
earned by an investment is assumed to be reinvested daily. The effective yield
will be slightly higher than the yield because of the compounding effect of this
assumed reinvestment.
Advertisements and sales literature may also refer to total return. Total return
represents the change, over a specified period of time, in the value of an
investment in the shares after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
13
GOVERNMENT OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT VALUE
---------------- ------------------------------------------------------------ --------------
<C> <S> <C>
SHORT-TERM OBLIGATIONS--31.1%
-------------------------------------------------------------------------------
$ 11,000,000 (a) FEDERAL FARM CREDIT BANK, DISCOUNT NOTES--0.5%
------------------------------------------------------------
6.578%, 2/23/1996 $ 10,611,633
------------------------------------------------------------ --------------
78,280,000 (a) FEDERAL HOME LOAN BANK, DISCOUNT NOTES--3.4%
------------------------------------------------------------
6.229%-7.00%, 11/2/1995-1/16/1996 76,473,379
------------------------------------------------------------ --------------
78,500,000 (b) FEDERAL HOME LOAN BANK, FLOATING RATE NOTES--3.5%
------------------------------------------------------------
5.715%-5.790%, 8/1/95 78,449,946
------------------------------------------------------------ --------------
63,500,000 (a) FEDERAL HOME LOAN BANK, DISCOUNT NOTES--2.8%
------------------------------------------------------------
6.015%-6.850%, 2/28/1996-6/13/1996 63,554,612
------------------------------------------------------------ --------------
13,165,000 (a) FEDERAL HOME LOAN MORTGAGE CORP., DISCOUNT NOTES--0.6%
------------------------------------------------------------
6.798%-7.013%, 11/1/1995-2/8/1996 12,837,593
------------------------------------------------------------ --------------
16,500,000 (b) FEDERAL HOME LOAN MORTGAGE CORP., FLOATING RATE NOTES--0.7%
------------------------------------------------------------
5.720%, 8/1/95 16,499,593
------------------------------------------------------------ --------------
246,920,000 (a) FEDERAL NATIONAL MORTGAGE ASSOCIATION, DISCOUNT NOTES--10.6%
------------------------------------------------------------
5.755%-6.399%, 8/17/1995-4/15/1996 241,643,739
------------------------------------------------------------ --------------
50,000,000 (b) FEDERAL NATIONAL MORTGAGE ASSOCIATION, FLOATING RATE
NOTES--2.2%
------------------------------------------------------------
5.740%-5.880%, 8/1/95 49,995,969
------------------------------------------------------------ --------------
11,000,000 (a) FEDERAL NATIONAL MORTGAGE ASSOCIATION, DISCOUNT NOTES--0.5%
------------------------------------------------------------
5.500%, 6/12/1996 10,961,811
------------------------------------------------------------ --------------
8,000,000 (a) STUDENT LOAN MARKETING ASSOCIATION, DISCOUNT NOTES--0.4%
------------------------------------------------------------
6.752%, 2/21/1996 8,007,761
------------------------------------------------------------ --------------
55,230,000 (b) STUDENT LOAN MARKETING ASSOCIATION, FLOATING RATE
NOTES--2.4%
------------------------------------------------------------
5.790%-6.040%, 8/7/95 55,243,249
------------------------------------------------------------ --------------
34,500,000 (a) U.S. TREASURY BILLS--1.5%
------------------------------------------------------------
5.270%-6.505%, 8/24/1995-6/27/1996 33,583,557
------------------------------------------------------------ --------------
45,000,000 U.S. TREASURY NOTES--2.0%
------------------------------------------------------------
7.750%-9.250%, 1/15/1996-3/31/1996 45,653,539
------------------------------------------------------------ --------------
TOTAL SHORT-TERM OBLIGATIONS 703,516,381
------------------------------------------------------------ --------------
</TABLE>
14
GOVERNMENT OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT VALUE
---------------- ------------------------------------------------------------ --------------
<C> <S> <C>
(C) REPURCHASE AGREEMENTS--70.9%
-------------------------------------------------------------------------------
$335,000,000 BT Securities Corp., 5.840%, dated 7/31/1995, due 8/1/1995 $ 335,000,000
------------------------------------------------------------
27,200,000 BZW Securities, Inc., 5.840%, dated 7/31/1995, due 8/1/1995 27,200,000
------------------------------------------------------------
50,000,000 Deutsche Bank Government Securities, Inc., 5.850%, dated
7/31/1995, due 8/1/1995 50,000,000
------------------------------------------------------------
40,000,000 Deutsche Bank Government Securities, Inc., 5.870%, dated
7/31/1995, due 8/1/1995 40,000,000
------------------------------------------------------------
240,000,000 Goldman, Sachs and Co., 5.870%, dated 7/31/1995, due
8/1/1995 240,000,000
------------------------------------------------------------
110,000,000 HSBC Securities, Inc., 5.870%, dated 7/31/1995, due 8/1/1995 110,000,000
------------------------------------------------------------
110,000,000 Harris, Nesbitt, Thomson Securities, Inc., 5.820%, dated
7/31/1995, due 8/1/1995 110,000,000
------------------------------------------------------------
25,000,000 J.P. Morgan Securities, Inc., 5.870%, dated 7/31/1995, due
8/1/1995 25,000,000
------------------------------------------------------------
110,000,000 Lehman Government Securities, Inc., 5.850%, dated 7/31/1995,
due 8/1/1995 110,000,000
------------------------------------------------------------
100,000,000 Nomura Securities Intenational, Inc., 5.860%, dated
7/31/1995, due 8/1/1995 100,000,000
------------------------------------------------------------
110,000,000 Smith Barney, Inc., 5.870%, dated 7/31/1995, due 8/1/1995 110,000,000
------------------------------------------------------------
80,000,000 Swiss Bank Capital Markets, 5.840%, dated 7/31/1995, due
8/1/1995 80,000,000
------------------------------------------------------------
110,000,000 UBS Securities, Inc., 5.800%, dated 7/31/1995, due 8/1/1995 110,000,000
------------------------------------------------------------
43,000,000 (d) CS First Boston Corp., 5.770%, dated 7/14/1995, due
8/14/1995 43,000,000
------------------------------------------------------------
28,000,000 (d) CS First Boston Corp., 5.800%, dated 7/7/1995, due 8/7/1995 28,000,000
------------------------------------------------------------
45,000,000 (d) Goldman, Sachs & Co., 5.750%, dated 7/7/1995, due 9/5/1995 45,000,000
------------------------------------------------------------
44,000,000 (d) Goldman, Sachs & Co., 5.750%, dated 7/25/1995, due
10/23/1995 44,000,000
------------------------------------------------------------ --------------
TOTAL REPURCHASE AGREEMENTS 1,607,200,000
------------------------------------------------------------ --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (E) $2,310,716,381
------------------------------------------------------------ --------------
--------------
<FN>
(a) Each issue shows the rate of discount at time of purchase.
(b) Current rate and next demand date shown.
</TABLE>
15
GOVERNMENT OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
(c) Repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated funds.
(d) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($2,265,621,228) at July 31, 1995.
</TABLE>
(See Notes which are an integral part of the Financial Statements.)
16
GOVERNMENT OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------
Investments in repurchase agreements $1,607,200,000
- ------------------------------------------------
Investments in securities 703,516,381
- ------------------------------------------------ --------------
Total investments in securities, at
amortized cost and value $2,310,716,381
- ----------------------------------------------------------------
Cash 1,277,143
- ----------------------------------------------------------------
Income receivable 4,063,752
- ----------------------------------------------------------------
Receivable for shares sold 50,790
- ---------------------------------------------------------------- --------------
Total assets 2,316,108,066
- ----------------------------------------------------------------
LIABILITIES:
- ----------------------------------------------------------------
Payable for investments purchased 33,980,946
- ------------------------------------------------
Payable for shares redeemed 8,642,732
- ------------------------------------------------
Income distribution payable 7,242,088
- ------------------------------------------------
Accrued expenses 621,072
- ------------------------------------------------ --------------
Total liabilities 50,486,838
- ---------------------------------------------------------------- --------------
NET ASSETS for 2,265,621,228 shares outstanding $2,265,621,228
- ---------------------------------------------------------------- --------------
--------------
NET ASSET VALUE, Offering Price and Redemption
Proceeds Per Share:
- ----------------------------------------------------------------
Institutional Shares:
- ----------------------------------------------------------------
($1,926,515,833 DIVIDED BY 1,926,515,833 shares outstanding) $ 1.00
- ---------------------------------------------------------------- --------------
Institutional Service Shares:
- ----------------------------------------------------------------
($339,105,395 DIVIDED BY 339,105,395 shares outstanding) $ 1.00
- ---------------------------------------------------------------- --------------
--------------
<FN>
(See Notes which are an integral part of the Financial Statements)
</TABLE>
17
GOVERNMENT OBLIGATIONS FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------------------
Interest $82,570,212
- -------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------
Investment advisory fee $2,842,786
- -----------------------------------------------------------------------
Administrative personnel and services fee 1,075,995
- -----------------------------------------------------------------------
Custodian fees 164,968
- -----------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 51,116
- -----------------------------------------------------------------------
Directors'/Trustees' fees 8,207
- -----------------------------------------------------------------------
Auditing fees 11,809
- -----------------------------------------------------------------------
Legal fees 4,496
- -----------------------------------------------------------------------
Portfolio accounting fees 149,536
- -----------------------------------------------------------------------
Shareholder services fee--Institutional Shares 3,183,649
- -----------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 369,663
- -----------------------------------------------------------------------
Share registration costs 561,996
- -----------------------------------------------------------------------
Printing and postage 23,120
- -----------------------------------------------------------------------
Insurance premiums 16,366
- -----------------------------------------------------------------------
Taxes 6,980
- -----------------------------------------------------------------------
Miscellaneous 4,704
- ----------------------------------------------------------------------- ----------
Total expenses 8,475,391
- -----------------------------------------------------------------------
Deduct--
- ----------------------------------------------------------
Waiver of investment advisory fee $2,063,842
- ----------------------------------------------------------
Waiver of shareholder services fee--Institutional Shares 3,183,649 5,247,491
- ---------------------------------------------------------- ---------- ----------
Net expenses 3,227,900
- ------------------------------------------------------------------------------------- -----------
Net investment income $79,342,312
- ------------------------------------------------------------------------------------- -----------
-----------
<FN>
(See Notes which are an integral part of the Financial Statements)
</TABLE>
18
GOVERNMENT OBLIGATIONS FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------------------
1995 1994
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------
Net investment income $ 79,342,312 $ 22,768,833
- ----------------------------------------------------------------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------------------
Distributions from net investment income:
- -----------------------------------------------------------------------
Institutional Shares (71,018,165) (22,768,833)
- -----------------------------------------------------------------------
Institutional Service Shares (8,324,147) 0
- ----------------------------------------------------------------------- --------------- ---------------
Change in net assets resulting from distributions to shareholders (79,342,312) (22,768,833)
- ----------------------------------------------------------------------- --------------- ---------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------------------
Proceeds from sale of Shares 8,123,000,879 3,045,297,053
- -----------------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment of
distributions declared 19,779,451 1,181,007
- -----------------------------------------------------------------------
Cost of Shares redeemed (6,641,037,966) (2,989,745,626)
- ----------------------------------------------------------------------- --------------- ---------------
Change in net assets resulting from share transactions 1,501,742,364 56,732,434
- ----------------------------------------------------------------------- --------------- ---------------
Change in net assets 1,501,742,364 56,732,434
- -----------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------
Beginning of period 763,878,864 707,146,430
- ----------------------------------------------------------------------- --------------- ---------------
End of period $ 2,265,621,228 $ 763,878,864
- ----------------------------------------------------------------------- --------------- ---------------
--------------- ---------------
<FN>
(See Notes which are an integral part of the Financial Statements)
</TABLE>
19
GOVERNMENT OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
1. ORGANIZATION
Money Market Obligations 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 six diversified portfolios. The
financial statements included herein are only those of Government Obligations
Fund (the "Fund"). The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held. The
Fund offers two classes of shares: Institutional Shares and Institutional
Service Shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the custodian
bank to take possession, to have legally segregated in the Federal Reserve
Book Entry System, or to have segregated within the custodian bank's vault,
all securities held as collateral under repurchase agreement transactions.
Additionally, procedures have been established by the Fund to monitor, on a
daily basis, the market value of each repurchase agreement's collateral to
ensure that the value of collateral at least equals the repurchase price to
be paid under the repurchase agreement transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less
than the repurchase price on the sale of collateral securities.
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.
20
GOVERNMENT OBLIGATIONS FUND
- --------------------------------------------------------------------------------
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.
OTHER--Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At July 31, 1995, capital paid-in aggregated $2,265,621,228.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
---------------------------------
INSTITUTIONAL SHARES 1995 1994
- --------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Shares sold 7,200,004,553 3,045,297,053
- ---------------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 16,152,849 1,181,007
- ---------------------------------------------------------------
Shares redeemed (6,053,520,182) (2,989,745,626)
- --------------------------------------------------------------- --------------- ---------------
Net change resulting from Institutional share transactions 1,162,637,220 56,732,434
- --------------------------------------------------------------- --------------- ---------------
--------------- ---------------
<CAPTION>
YEAR ENDED JULY 31,
---------------------------------
INSTITUTIONAL SERVICE SHARES 1995(A) 1994
- --------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Shares sold 922,996,326 --
- ---------------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 3,626,602 --
- ---------------------------------------------------------------
Shares redeemed (587,517,784) --
- --------------------------------------------------------------- --------------- ---------------
Net change resulting from Institutional Service share
transactions 339,105,144 --
- --------------------------------------------------------------- --------------- ---------------
--------------- ---------------
Net change resulting from Fund share transactions 1,501,742,364 56,732,434
- --------------------------------------------------------------- --------------- ---------------
--------------- ---------------
<FN>
(a) Reflects operations for the period from August 1, 1994 (date of initial
public investment) to July 31, 1995.
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment
adviser, (the "Adviser"), receives for its services an annual investment
advisory fee equal to .20 of 1% of the
21
GOVERNMENT OBLIGATIONS FUND
- --------------------------------------------------------------------------------
Fund's average daily net assets. The Adviser may voluntarily choose to waive
a portion of its fee. The Adviser can modify or terminate this voluntary
waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), provides the
Fund with administrative personnel and services. The FAS fee is based on the
level of average aggregate daily net assets of all funds advised by
subsidiaries of Federated Investors for the period. The administrative fee
received during the period of the Administrative Services Agreement shall be
at least $125,000 per portfolio and $30,000 per each additional class of
shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Fund will pay FSS
up to .25 of 1% of average daily net assets of the Fund for the period. This
fee is to obtain certain services for shareholders and to maintain
shareholder accounts. FSS may voluntarily chose to waive a portion of its
fee. FSS can modify or terminate this voluntary waiver at any time at its
sole discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent
for the Fund. The fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level of the
Fund's average daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
22
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
MONEY MARKET OBLIGATIONS TRUST
(Government Obligations Fund):
We have audited the accompanying statement of assets and liabilities of
Government Obligations Fund (an investment portfolio of Money Market Obligations
Trust, a Massachusetts business trust), including the schedule of portfolio
investments, as of July 31, 1995, the related statement of operations for the
year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform our audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of July
31, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Government Obligations Fund (an investment portfolio of Money Market Obligations
Trust) as of July 31, 1995, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for the periods presented, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
September 8, 1995
23
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Government Obligations Fund
Institutional Service Shares Federated Investors Tower
Pittsburgh, PA 15222-3779
- -------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, PA 15222-3779
- -------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, PA 15222-3779
- -------------------------------------------------------------------------------------------
Custodian
State Street Bank and Trust Company P.O. Box 8600
Boston, MA 02266-8600
- -------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, MA 02266-8600
- -------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, PA 15222
- -------------------------------------------------------------------------------------------
</TABLE>
24
- --------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS
FUND
(A PORTFOLIO OF MONEY MARKET
OBLIGATIONS TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
A Diversified Portfolio of
Money Market Obligations Trust,
an Open-End Management
Investment Company
Prospectus dated September 30, 1995
[LOGO] FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 60934N807
G01066-02 (9/95) [RECYCLED PAPER LOGO]
- --------------------------------------------------------------------------------
TREASURY OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
The Institutional Shares of Treasury Obligations Fund (the "Fund")
offered by this prospectus represent interests in a diversified
portfolio of Money Market Obligations Trust (the "Trust"), an open-end
management investment company (a mutual fund). The Fund invests in
U.S. Treasury securities to provide current income consistent with
stability of principal.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS
OF ANY BANK, ARE NOT ENDORSED OR 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 THESE SHARES INVOLVES INVESTMENT
RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE FUND ATTEMPTS TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN BE NO
ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and know
before you invest in the Fund. Keep this prospectus for future
reference.
The Fund has also filed a Combined Statement of Additional Information
dated September 30, 1995, with the Securities and Exchange Commission.
The information contained in the Combined Statement of Additional
Information is incorporated by reference into this prospectus. You may
request a copy of the Combined Statement of Additional Information,
which is in paper form only, or a paper copy of this prospectus, if
you have received your prospectus electronically, free of charge by
calling 1-800-235-4669. To obtain other information, or make inquiries
about the Fund, contact the Fund at the address listed in the back of
this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated September 30, 1995
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SUMMARY OF FUND EXPENSES 1
- --------------------------------------------------
FINANCIAL HIGHLIGHTS--INSTITUTIONAL
SHARES 2
- --------------------------------------------------
GENERAL INFORMATION 3
- --------------------------------------------------
INVESTMENT INFORMATION 3
- --------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Limitations 4
Regulatory Compliance 5
TRUST INFORMATION 5
- --------------------------------------------------
Management of the Trust 5
Distribution of Shares 6
Administration of the Fund 6
NET ASSET VALUE 7
- --------------------------------------------------
INVESTING IN THE FUND 7
- --------------------------------------------------
Share Purchases 7
Minimum Investment Required 8
Subaccounting Services 8
Certificates and Confirmations 8
Dividends 8
Capital Gains 8
REDEEMING SHARES 9
- --------------------------------------------------
By Mail 9
Telephone Redemption 9
Accounts with Low Balances 10
SHAREHOLDER INFORMATION 10
- --------------------------------------------------
Voting Rights 10
Massachusetts Partnership Law 11
TAX INFORMATION 11
- --------------------------------------------------
Federal Income Tax 11
Pennsylvania Corporate and Personal
Property Taxes 11
OTHER CLASSES OF SHARES 11
- --------------------------------------------------
PERFORMANCE INFORMATION 12
- --------------------------------------------------
FINANCIAL STATEMENTS 13
- --------------------------------------------------
REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS 21
- --------------------------------------------------
ADDRESSES 22
- --------------------------------------------------
</TABLE>
I
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)............. None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price).. None
Contingent Deferred Sales Charge (as a percentage of original purchase price or
redemption proceeds, as applicable)................................................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)...................... None
Exchange Fee............................................................................ None
<CAPTION>
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C> <C>
Management Fee (after waiver) (1)....................................................... 0.08%
12b-1 Fee............................................................................... None
Total Other Expenses.................................................................... 0.12%
Shareholder Services Fee (after waiver) (2)................................ 0.00%
Total Operating Expenses (3).................................................... 0.20%
<FN>
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
0.20%.
(2) The maximum shareholder services fee is 0.25%.
(3) The total operating expenses would have been 0.56% absent the voluntary
waivers of a portion of the management fee and the shareholder services
fee.
</TABLE>
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "INVESTING IN THE FUND" AND "TRUST INFORMATION." WIRE-TRANSFERRED
REDEMPTIONS OF LESS THAN $5,000 MAY BE SUBJECT TO ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and (2)
redemption at the end of each time period............... $2 $6 $11 $26
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
1
TREASURY OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Independent Public Accountants on page 21.
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990(a)
- ---------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------
Net investment income 0.05 0.03 0.03 0.05 0.07 0.04
- ----------------------------------
LESS DISTRIBUTIONS
- ----------------------------------
Distributions from net
investment income (0.05) (0.03) (0.03) (0.05) (0.07) (0.04)
- ---------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
TOTAL RETURN (b) 5.50% 3.35% 3.15% 4.61% 7.11% 5.09%
- ----------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------
Expenses 0.20% 0.20% 0.20% 0.20% 0.20% 0.20%(c)
- ----------------------------------
Net investment income 5.42 % 3.29 % 3.11 % 4.49 % 6.65 % 8.16 %(c)
- ----------------------------------
Expense waiver/reimbursement (d) 0.36 % 0.10 % 0.07 % 0.08 % 0.09 % 0.15 %(c)
- ----------------------------------
SUPPLEMENTAL DATA
- ----------------------------------
Net assets, end of period (000
omitted) $3,441,068 $2,582,975 $2,532,482 $2,432,037 $1,678,880 $576,048
- ----------------------------------
<FN>
(a) Reflects operations for the period from February 23, 1990 (date of initial
public investment) to July 31, 1990.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
2
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated October 3, 1988. The Declaration of Trust permits the Trust to
offer separate series of shares representing interests in separate portfolios of
securities. The shares in any one portfolio may be offered in separate classes.
With respect to this Fund, as of the date of this prospectus, the Trustees have
established two classes of shares known as Institutional Service Shares and
Institutional Shares. This prospectus relates only to Institutional Shares of
the Fund, which are designed primarily for financial institutions as a
convenient means of accumulating an interest in a professionally managed,
diversified portfolio investing in short-term U.S. Treasury securities. A
minimum initial investment of $25,000 is required.
Eligibility for investment in the Fund is contingent upon an investor
accumulating and maintaining a minimum aggregate investment of $200,000,000 in
Federated funds within a twelve-month period. For this purpose, 1) an investor
is defined as a financial institution or its collective customers, including
affiliate financial institutions and their collective customers, or other
institutions that are determined to qualify by Federated Securities Corp., and
2) Federated funds are those mutual funds which are distributed by Federated
Securities Corp., or are advised by or administered by investment advisers or
administrators affiliated with Federated Securities Corp. ("Federated Funds").
An investor's minimum investment will be calculated by combining all accounts
the investor maintains with the Federated Funds, which includes the Fund.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income consistent
with stability of principal. This investment objective cannot be changed without
shareholder approval. While there is no assurance that the Fund will achieve its
investment objective, it endeavors to do so by following the investment policies
described in this prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing only in U.S. Treasury
securities maturing in 13 months or less. The average maturity of the securities
in the Fund's portfolio, computed on a dollar-weighted basis, will be 90 days or
less. Unless indicated otherwise, investment policies may be changed by the
Trustees without shareholder approval. Shareholders will be notified before any
material change in these policies becomes effective.
ACCEPTABLE INVESTMENTS. The Fund invests only in U.S. Treasury securities,
which are fully guaranteed as to principal and interest by the United States.
3
REPURCHASE AGREEMENTS. Certain securities in which the Fund invests may be
purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/dealers, and other recognized financial
institutions sell securities to the Fund and agree at the time of sale to
repurchase them at a mutually agreed upon time and price. To the extent that the
seller does not repurchase the securities from the Fund, the Fund could receive
less than the repurchase price on any sale of such securities.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Fund to miss a price or yield considered to be advantageous. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices.
Accordingly, the Fund may pay more or less than the market value of the
securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the adviser deems it
appropriate to do so. In addition, the Fund may enter into transactions to sell
its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Fund may realize short-term profits or losses upon the sale of such
commitments.
LENDING OF PORTFOLIO SECURITIES. In order to generate additional income, the
Fund may lend its portfolio securities on a short-term or long-term basis, or
both, to broker/dealers, banks, or other institutional borrowers of securities.
The Fund will only enter into loan arrangements with broker/ dealers, banks, or
other institutions which the adviser has determined are creditworthy under
guidelines established by the Fund's Trustees and will receive collateral at all
times equal to at least 100% of the value of the securities loaned. There is the
risk that when lending portfolio securities, the securities may not be available
to the Fund on a timely basis and the Fund may, therefore, lose the opportunity
to sell the securities at a desirable price. In addition, in the event that a
borrower of securities would file for bankruptcy or become insolvent,
disposition of the securities may be delayed pending court action.
INVESTMENT LIMITATIONS
The Fund will not borrow money or pledge securities except, under certain
circumstances, the Fund may borrow up to one-third of the value of its total
assets and pledge assets to secure such borrowings.
The above investment limitation cannot be changed without shareholder approval.
The following limitation, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in this limitation becomes effective.
The Fund will not invest more than 10% of its net assets in illiquid securities,
including repurchase agreements providing for settlement in more than seven days
after notice.
4
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Combined Statement of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940, as amended. In particular,
the Fund will comply with the various requirements of Rule 2a-7, which regulates
money market mutual funds. The Fund will determine the effective maturity of its
investments according to Rule 2a-7. The Fund may change these operational
policies to reflect changes in the laws and regulations without the approval of
its shareholders.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the Fund's business affairs and for exercising all
the Trust's powers except those reserved for the shareholders. An Executive
Committee of the Board of Trustees handles the Board's responsibilities between
meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the Trustees.
The adviser continually conducts investment research and supervision for the
Fund and is responsible for the purchase and sale of portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment advisory fee equal
to .20 of 1% of the Fund's average daily net assets. The adviser has
undertaken to reimburse the Fund up to the amount of the advisory fee for
operating expenses in excess of limitations established by certain states.
The adviser also may voluntarily choose to waive a portion of its fee or
reimburse other expenses of the Fund, but reserves the right to terminate
such waiver or reimbursement at any time at its sole discretion.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve
as investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services to
a number of investment companies. With over $72 billion invested across more
than 260 funds under management and/or administration by its subsidiaries,
as of December 31, 1994, Federated Investors is one of the largest mutual
fund investment managers in the United States. With more than 1,750
employees, Federated continues to be led by the management who founded the
company in 1955. Federated funds are
5
presently at work in and through 4,000 financial institutions nationwide.
More than 100,000 investment professionals have selected Federated funds for
their clients.
Both the Trust and the adviser have adopted strict codes of ethics governing the
conduct of all employees who manage the Fund and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Fund's
shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Trustees, and could
result in severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for Institutional Shares
of the Fund. It is a Pennsylvania corporation organized on November 14, 1969,
and is the principal distributor for a number of investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors.
SHAREHOLDER SERVICES. The Fund has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which the Fund may make payments up to .25 of 1% of the average
daily net asset value of the Institutional Shares, computed at an annual rate,
to obtain personal services for shareholders and provide maintenance of
shareholder accounts ("shareholder services"). From time to time and for such
periods as deemed appropriate, the amount stated above may be reduced
voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services will
either perform shareholder services directly or will select financial
institutions fees to perform shareholder services based upon shares owned by
their clients or customers. Financial institutions will receive fees based upon
shares owned by their clients or customers. The schedules of such fees and the
basis upon which such fees will be paid will be determined from time to time by
the Fund and Federated Shareholder Services.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate as specified
below:
<TABLE>
<CAPTION>
MAXIMUM FEE AVERAGE AGGREGATE DAILY NET ASSETS
- ----------- ----------------------------------
<C> <S>
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
on assets in excess of $750
.075 of 1% million
</TABLE>
6
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares. Average
aggregate daily net assets include those of all mutual funds advised by
affiliates of Federated Investors. Federated Administrative Services may choose
voluntarily to waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, MA, is custodian for
the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Boston, MA, is transfer agent for the shares of, and dividend disbursing agent
for, the Fund. Federated Services Company is a subsidiary of Federated
Investors.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the Fund
are Arthur Andersen LLP, Pittsburgh, PA.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund attempts to stabilize the net asset value of shares at $1.00 by valuing
the portfolio securities using the amortized cost method. The net asset value
per share is determined by subtracting liabilities attributable to shares from
the value of Fund assets attributable to shares, and dividing the remainder by
the number of shares outstanding. The Fund cannot guarantee that its net asset
value will always remain at $1.00 per share.
The net asset value is determined at 12:00 noon, 3:00 p.m. (Eastern time), and
as of the close of trading (normally 4:00 p.m., Eastern time) on the New York
Stock Exchange, Monday through Friday, except on New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares may
be purchased either by wire or mail. The Fund reserves the right to reject any
purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
BY WIRE. To purchase by Federal Reserve wire, call the Fund before 5:00 p.m.
(Eastern time) to place an order. The order is considered received immediately.
Payment by federal funds must be received before 5:00 p.m. (Eastern time) that
day. Federal funds should be wired as follows: Federated Services Company, c/o
State Street Bank and Trust Company, Boston, MA; Attention: EDGEWIRE; For Credit
to: Treasury Obligations Fund--Institutional Shares; Fund Number (this number
can be found on the account statement or by contacting the Fund); Group Number
or Order Number; Nominee or
7
Institution Name; and ABA Number 011000028. The Fund reserves the right to
refuse any request made by wire or telephone and may limit the amount involved
or the number of telephone redemptions. This procedure may be modified or
terminated by the transfer agent or the Fund.
BY MAIL. To purchase by mail, send a check made payable to Treasury Obligations
Fund--Institutional Shares to: Federated Services Company, Treasury Obligations
Fund, P.O. Box 8600, Boston, MA 02266-8600. Orders by mail are considered
received when payment by check is converted into federal funds. This is normally
the next business day after the check is received.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $25,000. Eligibility for investment in the
Fund is contingent upon an investor accumulating and maintaining a minimum
aggregate investment of $200,000,000 in Federated Funds within a twelve-month
period.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent charges a fee based on the level of subaccounting services
rendered. Financial institutions may charge or pass through subaccounting fees
as part of or in addition to normal trust or agency account fees. They may also
charge fees for other services provided which may be related to the ownership of
Fund shares. This prospectus should, therefore, be read together with any
agreement between the customer and the financial institution with regard to the
services provided, the fees charged for those services, and any restrictions and
limitations imposed. State securities laws may require certain financial
institutions such as depository institutions to register as dealers.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases and
redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional shares of the Fund unless cash
payments are requested by writing to the Fund. Shares purchased by wire before
5:00 p.m. (Eastern time) begin earning dividends that day. Shares purchased by
check begin earning dividends the day after the check is converted into federal
funds.
CAPITAL GAINS
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund will distribute in cash or additional shares any realized
net long-term capital gains at least once every 12 months.
8
REDEEMING SHARES
- --------------------------------------------------------------------------------
Shares are redeemed at their net asset value next determined after Federated
Services Company receives the redemption request. Redemptions will be made on
days on which the Fund computes its net asset value. Redemption requests must be
received in proper form and can be made as described below.
BY MAIL
Shares may be redeemed by sending a written request to: Treasury Obligations
Fund, Federated Services Company, P.O. Box 8600, Boston, MA 02266-8600. The
written request should state: Treasury Obligations Fund-Institutional Shares;
shareholder's name; the account number; and the share or dollar amount
requested. Sign the request exactly as the shares are registered. Shareholders
should call the Fund for assistance in redeeming by mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or overnight insured mail with the written request
to Federated Services Company, 500 Victory Road-2nd Floor, North Quincy, MA
02171.
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Fund, or a redemption payable other than to
the shareholder of record must have their signatures guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and the transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of the
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Fund. Telephone instructions may be
recorded and if reasonable procedures are not followed by the Fund, it may be
liable for losses due to unauthorized or fraudulent telephone instructions. An
authorization form permitting the Fund to accept telephone
9
requests must first be completed. Authorization forms and information on this
service are available from Federated Securities Corp.
If the redemption request is received before 5:00 p.m. (Eastern time), the
proceeds will be wired the same day to the shareholder's account at a domestic
commercial bank which is a member of the Federal Reserve System, and those
shares redeemed will not be entitled to that day's dividend. A daily dividend
will be paid on shares redeemed if the redemption request is received after 5:00
p.m. (Eastern time). However, the proceeds are not wired until the following
business day. Under limited circumstances, arrangements may be made with the
distributor for same-day payment of proceeds, without that day's dividend, for
redemption requests received before 5:00 p.m. (Eastern time). The Fund reserves
the right to refuse any request made by wire or telephone and may limit the
amount involved or the number of telephone redemptions. This procedure may be
modified or terminated by the transfer agent or the Fund.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail", should be considered. If at any time
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000, or the
aggregate investment in Federated funds falls below the required minimum of
$200,000,000 to be maintained from and after twelve months from account opening,
due to shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights, except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder approval will be
sought only for certain changes in the Trust's or the Fund's operation and for
the election of Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders for this purpose shall be called by the
Trustees upon the written request of shareholders owning at least 10% of the
outstanding shares of the Trust.
10
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies whether dividends
and distributions are received in cash or as additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston, & Donnelly, counsel to the Trust, Fund
shares may be subject to personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania to the extent that the
portfolio securities in the Fund would be subject to such taxes if owned
directly by residents of those jurisdictions.
OTHER STATE AND LOCAL TAXES. Shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax laws.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
The Fund also offers another class of shares called Institutional Service
Shares. Institutional Service Shares are sold at net asset value primarily to
accounts for which financial institutions act in an agency or fiduciary capacity
and are subject to a minimum initial investment of $25,000.
All classes are subject to certain of the same expenses.
11
Institutional Service Shares are distributed with no 12b-1 fees but are subject
to shareholder services fees.
Expense differences between classes may affect the performance of each class.
To obtain more information and a prospectus for any other class, investors may
call 1-800-235-4669.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time, the Fund advertises its yield and effective yield for shares.
Performance figures will be calculated separately for each class of shares.
Yield represents the annualized rate of income earned on an investment over a
seven-day period. It is the annualized dividends earned during the period on an
investment shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but when annualized, the income earned by an
investment is assumed to be reinvested daily. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.
Advertisements and sales literature may also refer to total return. Total return
represents the change, over a specified period of time, in the value of an
investment in the shares after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
12
TREASURY OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT VALUE
- ---------------- ------------------------------------------------------------ --------------
<C> <S> <C>
SHORT TERM U.S. TREASURY OBLIGATIONS--25.5%
- ---------------------------------------------------------------------------------
(a) U.S. TREASURY BILLS--16.7%
------------------------------------------------------------
$ 681,000,00 6.830%-5.550%, 8/17/1995 - 5/30/1996 $ 666,042,514
------------------------------------------------------------ --------------
U.S. TREASURY NOTES--8.8%
------------------------------------------------------------
350,500,000 3.875%-9.375%, 8/31/1995 - 5/15/1996 351,865,208
------------------------------------------------------------ --------------
TOTAL SHORT-TERM U.S. TREASURY OBLIGATIONS 1,017,907,722
------------------------------------------------------------ --------------
(b) REPURCHASE AGREEMENTS--74.9%
- ---------------------------------------------------------------------------------
50,000,000 Aubrey G. Lanston and Company, Inc., 5.850%, dated
7/31/1995, due 8/1/1995 50,000,000
------------------------------------------------------------
150,000,000 BA Securities, Inc., 5.810%, dated 7/31/1995, due 8/1/1995 150,000,000
------------------------------------------------------------
155,000,000 B.T. Securities Corporation, 5.840%, dated 7/31/1995, due
8/1/1995 155,000,000
------------------------------------------------------------
170,000,000 BOT Securites, Inc., Tokyo, 5.800%, dated 7/31/1995, due
8/1/1995 170,000,000
------------------------------------------------------------
54,800,000 Barclays de Zoete Wedd Securities, Inc., 5.840%, dated
7/31/1995, due 8/1/1995 54,800,000
------------------------------------------------------------
195,000,000 Bear, Stearns and Co., 5.810%, dated 7/31/1995, due 8/1/1995 195,000,000
------------------------------------------------------------
195,000,000 Chemical Banking Corp., 5.820%, dated 7/31/1995, due
8/1/1995 195,000,000
------------------------------------------------------------
195,000,000 Daiwa Securities America, Inc., 5.800%, dated 7/31/1995, due
8/1/1995 195,000,000
------------------------------------------------------------
80,000,000 Deutsche Bank Government Securities, Inc., 5.850%, dated
7/31/1995, due 8/1/1995 80,000,000
------------------------------------------------------------
100,000,000 Dresdner Securities (USA), Inc., 5.820%, dated 7/31/1995,
due 8/1/1995 100,000,000
------------------------------------------------------------
195,000,000 First Chicago Capital Markets, Inc., 5.820%, dated
7/31/1995, due 8/1/1995 195,000,000
------------------------------------------------------------
170,000,000 Fuji Securities, Inc., 5.820%, dated 7/31/1995, due 8/7/1995 170,000,000
------------------------------------------------------------
40,000,000 HSBC Securities, Inc., 5.850%, dated 7/31/1995, due 8/1/1995 40,000,000
------------------------------------------------------------
40,000,000 Harris, Nesbitt Thomson, 5.840%, dated 7/31/1995, due
8/1/1995 40,000,000
------------------------------------------------------------
</TABLE>
13
TREASURY OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT VALUE
- ---------------- ------------------------------------------------------------ --------------
<C> <S> <C>
(B) REPURCHASE AGREEMENTS--CONTINUED
- ---------------------------------------------------------------------------------
30,000,000 J.P. Morgan Securities, Inc., 5.840%, dated 7/31/1995, due
8/1/1995 $ 30,000,000
------------------------------------------------------------
195,000,000 Lehman Government Securities, Inc., 5.850%, dated 7/31/1995,
due 8/1/1995 195,000,000
------------------------------------------------------------
93,000,000 (c) Merrill Lynch, Pierce, Fenner and Smith, 5.700%, dated
7/7/1995, due 9/5/1995 93,000,000
------------------------------------------------------------
195,000,000 National Westminster Bank USA, NY, 5.820%, dated 7/31/1995,
due 8/1/1995 195,000,000
------------------------------------------------------------
195,000,000 Nations Bank of North Carolina, 5.800%, dated 7/31/1995, due
8/1/1995 195,000,000
------------------------------------------------------------
120,000,000 Nikko Securities, 5.820%, dated 7/31/1995, due 8/1/1995 120,000,000
------------------------------------------------------------
50,000,000 State Street Bank and Trust Co., 5.820%, dated 7/31/1995,
due 8/1/1995 50,000,000
------------------------------------------------------------
195,000,000 SBC Capital Markets, 5.820%, dated 7/31/1995, due 8/1/1995 195,000,000
------------------------------------------------------------
120,000,000 UBS Securities, Inc., 5.800%, dated 7/31/1995, due 8/1/1995 120,000,000
------------------------------------------------------------ --------------
TOTAL REPURCHASE AGREEMENTS 2,982,800,000
------------------------------------------------------------ --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (d) $4,000,707,722
------------------------------------------------------------ --------------
--------------
<FN>
(a) Each issue shows the rate of discount at the time of purchase.
(b) Repurchase agreements are fully collateralized by U.S. Treasury obligations
based on market prices at the date of the portfolio. The investments in the
repurchase agreements are through participation in joint accounts with other
Federated funds.
(c) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement.
(d) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($3,984,922,273) at July 31, 1995.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
14
TREASURY OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------
Investments in repurchase agreements $2,982,800,000
- --------------------------------------------------
Investments in securities 1,017,907,722
- -------------------------------------------------- --------------
Total investments at amortized cost and value $4,000,707,722
- ------------------------------------------------------------------
Cash 211,164
- ------------------------------------------------------------------
Income receivable 6,723,593
- ------------------------------------------------------------------
Receivable for shares sold 256,869
- ------------------------------------------------------------------ --------------
Total assets 4,007,899,348
- ------------------------------------------------------------------
LIABILITIES:
- ------------------------------------------------------------------
Payable for shares redeemed 5,235,807
- --------------------------------------------------
Income distribution payable 17,005,739
- --------------------------------------------------
Accrued expenses 735,529
- -------------------------------------------------- --------------
Total liabilities 22,977,075
- ------------------------------------------------------------------ --------------
NET ASSETS for 3,984,922,273 shares outstanding $3,984,922,273
- ------------------------------------------------------------------ --------------
--------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- ------------------------------------------------------------------
Institutional Shares:
($3,441,067,673 DIVIDED BY 3,441,067,673 shares
outstanding) $1.00
- ------------------------------------------------------------------ --------------
Institutional Service Shares:
($543,854,600 DIVIDED BY 543,854,600 shares
outstanding) $1.00
- ------------------------------------------------------------------ --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
15
TREASURY OBLIGATIONS FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------
Interest $183,952,583
- ---------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------
Investment advisory fee $ 6,522,177
- --------------------------------------------------------------
Administrative personnel and services fee 2,468,644
- --------------------------------------------------------------
Custodian fees 233,169
- --------------------------------------------------------------
Transfer agent and dividend disbursing agent fees
and expenses 74,251
- --------------------------------------------------------------
Directors'/Trustees' fees 13,914
- --------------------------------------------------------------
Auditing fees 12,951
- --------------------------------------------------------------
Legal fees 4,583
- --------------------------------------------------------------
Portfolio accounting fees 239,767
- --------------------------------------------------------------
Shareholder services fee--Institutional Shares 7,734,539
- --------------------------------------------------------------
Shareholder services fee--Institutional Service
Shares 418,181
- --------------------------------------------------------------
Share registration costs 626,125
- --------------------------------------------------------------
Printing and postage 19,858
- --------------------------------------------------------------
Insurance premiums 43,861
- --------------------------------------------------------------
Taxes 20,066
- --------------------------------------------------------------
Miscellaneous 15,591
- -------------------------------------------------------------- -----------
Total expenses 18,447,677
- --------------------------------------------------------------
Deduct--
- --------------------------------------------------
Waiver of investment advisory fee $3,742,710
- --------------------------------------------------
Waiver of shareholder services
fee--Institutional Shares 7,734,539 11,477,249
- -------------------------------------------------- ---------- -----------
Net expenses 6,970,428
- --------------------------------------------------------------------------- ------------
Net investment income $176,982,155
- --------------------------------------------------------------------------- ------------
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
16
TREASURY OBLIGATIONS FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------------------
1995 1994
---------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------
OPERATIONS--
- --------------------------------------------------
Net investment income $ 176,982,155 $ 81,337,110
- -------------------------------------------------- ---------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------------
Distributions from net investment income
- --------------------------------------------------
Institutional Shares (167,724,558) (81,325,025)
- --------------------------------------------------
Institutional Service Shares (9,257,597) (12,085)
- -------------------------------------------------- ---------------- ---------------
Change in net assets resulting from
distributions to shareholders (176,982,155) (81,337,110)
- -------------------------------------------------- ---------------- ---------------
SHARE TRANSACTIONS--
- --------------------------------------------------
Proceeds from sale of Shares 19,110,121,123 9,791,368,504
- --------------------------------------------------
Net asset value of Shares issued to shareholders
in payment of distributions declared 22,269,297 4,797,827
- --------------------------------------------------
Cost of Shares redeemed (17,739,330,600) (9,736,785,420)
- -------------------------------------------------- ---------------- ---------------
Change in net assets resulting from share
transactions 1,393,059,820 59,380,911
- -------------------------------------------------- ---------------- ---------------
Change in net assets 1,393,059,820 59,380,911
- --------------------------------------------------
NET ASSETS:
- --------------------------------------------------
Beginning of period 2,591,862,453 2,532,481,542
- -------------------------------------------------- ---------------- ---------------
End of period $ 3,984,922,273 $ 2,591,862,453
- -------------------------------------------------- ---------------- ---------------
---------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
17
TREASURY OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Money Market Obligations 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 six diversified portfolios. The
financial statements included herein are only those of Treasury Obligations Fund
(the "Fund"). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held. The Fund offers
two classes of shares: Institutional Shares and Institutional Service Shares.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
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.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the custodian
bank to take possession, to have legally segregated in the Federal Reserve
Book Entry System, or to have segregated within the custodian bank's vault,
all securities held as collateral under repurchase agreement investment
transactions. Additionally, procedures have been established by the Fund to
monitor, on a daily basis, the market value of each repurchase agreement's
collateral to ensure that the value of collateral at least equals the
repurchase price paid under the repurchase agreement transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as brokers/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less
than the repurchase price on the sale of collateral securities.
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.
18
TREASURY OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At July 31, 1995, capital paid-in aggregated $3,984,922,273.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------------------
INSTITUTIONAL SHARES 1995 1994
- ---------------------------------------------------------------------- ---------------- ---------------
<S> <C> <C>
Shares sold 17,554,361,142 9,782,493,254
- ----------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 18,926,732 4,785,818
- ----------------------------------------------------------------------
Shares redeemed (16,715,195,395) (9,736,785,420)
- ---------------------------------------------------------------------- ---------------- ---------------
Net change resulting from Institutional Shares transactions 858,092,479 50,493,652
- ---------------------------------------------------------------------- ---------------- ---------------
<CAPTION>
YEAR ENDED JULY 31,
----------------------------------
INSTITUTIONAL SERVICE SHARES 1995 1994*
- ---------------------------------------------------------------------- ---------------- ---------------
<S> <C> <C>
Shares sold 1,555,759,981 8,875,250
- ----------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 3,342,565 12,009
- ----------------------------------------------------------------------
Shares redeemed (1,024,135,205) --
- ---------------------------------------------------------------------- ---------------- ---------------
Net change resulting from Institutional Service Shares transactions 534,967,341 8,887,259
- ---------------------------------------------------------------------- ---------------- ---------------
Net change resulting from share transactions 1,393,059,820 59,380,911
- ---------------------------------------------------------------------- ---------------- ---------------
---------------- ---------------
<FN>
* For the period from July 5, 1994 (date of initial public offering) to July 31,
1994.
</TABLE>
19
TREASURY OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to 0.20 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive a portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund administrative
personnel and services. The FAS fee is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period
of the Administrative Services Agreement shall be at least $125,000 per
portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Fund will pay FSS
up to 0.25 of 1% of average net assets of the Fund for the period. This fee
is to obtain certain personal services for shareholders and to maintain
shareholder accounts. FSS may voluntarily choose to waive a portion of this
fee. FSS can modify or terminate this voluntary waiver at any time at its
sole discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent
for the Fund. The FServ fee is based on the size, type, and number of
accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level of the
Fund's average daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
20
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
MONEY MARKET OBLIGATIONS TRUST
(Treasury Obligations Fund):
We have audited the accompanying statement of assets and liabilities of Treasury
Obligations Fund (an investment portfolio of Money Market Obligations Trust, a
Massachusetts business trust), including the schedule of portfolio investments,
as of July 31, 1995, the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for the periods presented. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of July
31, 1995, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Treasury Obligations Fund (an investment portfolio of Money Market Obligations
Trust) as of July 31, 1995, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for the periods presented, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
September 8, 1995
21
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Treasury Obligations Fund
Institutional Shares Federated Investors Tower
Pittsburgh, PA 15222-3779
- -------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, PA 15222-3779
- -------------------------------------------------------------------------------------------
Investment Advisor
Federated Management Federated Investors Tower
Pittsburgh, PA 15222-3779
- -------------------------------------------------------------------------------------------
Custodian
State Street Bank and Trust Company P.O. Box 8600
Boston, MA 02266-8600
- -------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, MA 02266-8600
- -------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, PA 15222
- -------------------------------------------------------------------------------------------
</TABLE>
22
- --------------------------------------------------------------------------------
TREASURY OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET
OBLIGATIONS TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
A Diversified Portfolio of
Money Market Obligations Trust,
an Open-End Management
Investment Company
Prospectus dated September 30,
1995
[LOGO] FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 60934N500
9110208A-IS (9/95) [RECYCLED PAPER LOGO]
- --------------------------------------------------------------------------------
TREASURY OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
The Institutional Service Shares of Treasury Obligations Fund (the
"Fund") offered by this prospectus represent interests in a
diversified portfolio of Money Market Obligations Trust (the "Trust"),
an open-end management investment company (a mutual fund). The Fund
invests in U.S. Treasury securities to provide current income
consistent with stability of principal.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS
OF ANY BANK, ARE NOT ENDORSED OR 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 THESE SHARES INVOLVES INVESTMENT
RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE FUND ATTEMPTS TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN BE NO
ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and know
before you invest in the Fund. Keep this prospectus for future
reference.
The Fund has also filed a Combined Statement of Additional Information
dated September 30, 1995, with the Securities and Exchange Commission.
The information contained in the Combined Statement of Additional
Information is incorporated by reference into this prospectus. You may
request a copy of the Combined Statement of Additional Information,
which is in paper form only, or a paper copy of this prospectus, if
you have received your prospectus electronically, free of charge by
calling 1-800-235-4669. To obtain other information, or make inquiries
about the Fund, contact the Fund at the address listed in the back of
this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated September 30, 1995
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SUMMARY OF TRUST EXPENSES 1
- --------------------------------------------------
FINANCIAL HIGHLIGHTS--INSTITUTIONAL
SERVICE SHARES 2
- --------------------------------------------------
GENERAL INFORMATION 3
- --------------------------------------------------
INVESTMENT INFORMATION 3
- --------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Limitations 4
Regulatory Compliance 5
TRUST INFORMATION 5
- --------------------------------------------------
Management of the Trust 5
Distribution of Shares 6
Administration of the Fund 6
NET ASSET VALUE 7
- --------------------------------------------------
INVESTING IN THE FUND 7
- --------------------------------------------------
Share Purchases 7
Minimum Investment Required 8
Subaccounting Services 8
Certificates and Confirmations 8
Dividends 8
Capital Gains 8
REDEEMING SHARES 9
- --------------------------------------------------
By Mail 9
Telephone Redemption 9
Accounts with Low Balances 10
SHAREHOLDER INFORMATION 10
- --------------------------------------------------
Voting Rights 10
Massachusetts Partnership Law 11
TAX INFORMATION 11
- --------------------------------------------------
Federal Income Tax 11
Pennsylvania Corporate and Personal
Property Taxes 11
OTHER CLASSES OF SHARES 11
- --------------------------------------------------
PERFORMANCE INFORMATION 12
- --------------------------------------------------
FINANCIAL STATEMENTS 13
- --------------------------------------------------
REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS 21
- --------------------------------------------------
ADDRESSES 22
- --------------------------------------------------
</TABLE>
I
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SERVICE SHARES
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)............. None
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering
price)................................................................................ None
Contingent Deferred Sales Charge (as a percentage of original purchase price or
redemption proceeds, as applicable)................................................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)...................... None
Exchange Fee............................................................................ None
<CAPTION>
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C> <C>
Management Fee (after waiver) (1)....................................................... 0.08%
12b-1 Fee............................................................................... None
Total Other Expenses.................................................................... 0.37%
Shareholder Services Fee................................................... 0.25%
Total Operating Expenses (2).................................................... 0.45%
<FN>
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
0.20%.
(2) The total operating expenses would have been 0.56% absent the voluntary
waiver of a portion of the management fee.
</TABLE>
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL SERVICE SHARES OF
THE FUND WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE
DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES, SEE "INVESTING IN THE FUND" AND
"TRUST INFORMATION". WIRE-TRANSFERRED REDEMPTIONS OF LESS THAN $5,000 MAY BE
SUBJECT TO ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and (2)
redemption at the end of each time period............... $5 $14 $25 $57
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
1
TREASURY OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Independent Public Accountants, on page 21.
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
---------------------
1995 1994(a)
- ------------------------------------------------------------ -------- --------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
- ------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------
Net investment income 0.05 0.003
- ------------------------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------------------------
Distributions from net investment income (0.05) (0.003)
- ------------------------------------------------------------ -------- --------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
- ------------------------------------------------------------ -------- --------
-------- --------
TOTAL RETURN (b) 5.23% 0.29%
- ------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------------
Expenses 0.45% 0.39%(c)
- ------------------------------------------------------------
Net investment income 5.53% 4.26%(c)
- ------------------------------------------------------------
Expense waiver/reimbursement (d) 0.11% 0.10%(c)
- ------------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------------
Net assets, end of period (000 omitted) $543,855 $8,887
- ------------------------------------------------------------
<FN>
(a) Reflects operations for the period from July 5, 1994 (date of initial
public investment) to July 31, 1994.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
2
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated October 3, 1988. The Declaration of Trust permits the Trust to
offer separate series of shares representing interests in separate portfolios of
securities. The shares in any one portfolio may be offered in separate classes.
With respect to this Fund, as of the date of this prospectus, the Trustees have
established two classes of shares known as Institutional Service Shares and
Institutional Shares. This prospectus relates only to Institutional Service
Shares of the Fund, which are designed primarily for financial institutions as a
convenient means of accumulating an interest in a professionally managed,
diversified portfolio investing in short-term U.S. Treasury securities. A
minimum initial investment of $25,000 is required.
Eligibility for investment in the Fund is contingent upon an investor
accumulating and maintaining a minimum aggregate investment of $200,000,000 in
Federated funds within a twelve-month period. For this purpose, 1) an investor
is defined as a financial institution or its collective customers, including
affiliate financial institutions and their collective customers, or other
institutions that are determined to qualify by Federated Securities Corp., and
2) Federated funds are those mutual funds which are distributed by Federated
Securities Corp., or are advised by or administered by investment advisers or
administrators affiliated with Federated Securities Corp. ("Federated Funds").
An investor's minimum investment will be calculated by combining all accounts
the investor maintains with the Federated Funds, which includes the Fund.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income consistent
with stability of principal. This investment objective cannot be changed without
shareholder approval. While there is no assurance that the Fund will achieve its
investment objective, it endeavors to do so by following the investment policies
described in this prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing only in U.S. Treasury
securities maturing in 13 months or less. The average maturity of the securities
in the Fund's portfolio, computed on a dollar-weighted basis, will be 90 days or
less. Unless indicated otherwise, investment policies may be changed by the
Trustees without shareholder approval. Shareholders will be notified before any
material change in these policies becomes effective.
ACCEPTABLE INVESTMENTS. The Fund invests only in U.S. Treasury securities,
which are fully guaranteed as to principal and interest by the United States.
3
REPURCHASE AGREEMENTS. Certain securities in which the Fund invests may be
purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/dealers, and other recognized financial
institutions sell securities to the Fund and agree at the time of sale to
repurchase them at a mutually agreed upon time and price. To the extent that the
seller does not repurchase the securities from the Fund, the Fund could receive
less than the repurchase price on any sale of such securities.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Fund to miss a price or yield considered to be advantageous. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices.
Accordingly, the Fund may pay more or less than the market value of the
securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the adviser deems it
appropriate to do so. In addition, the Fund may enter into transactions to sell
its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Fund may realize short-term profits or losses upon the sale of such
commitments.
LENDING OF PORTFOLIO SECURITIES. In order to generate additional income, the
Fund may lend its portfolio securities on a short-term or long-term basis, or
both, to broker/dealers, banks, or other institutional borrowers of securities.
The Fund will only enter into loan arrangements with broker/ dealers, banks, or
other institutions which the adviser has determined are creditworthy under
guidelines established by the Fund's Trustees and will receive collateral at all
times equal to at least 100% of the value of the securities loaned. There is the
risk that when lending portfolio securities, the securities may not be available
to the Fund on a timely basis and the Fund may, therefore, lose the opportunity
to sell the securities at a desirable price. In addition, in the event that a
borrower of securities would file for bankruptcy or become insolvent,
disposition of the securities may be delayed pending court action.
INVESTMENT LIMITATIONS
The Fund will not borrow money or pledge securities except, under certain
circumstances, the Fund may borrow up to one-third of the value of its total
assets and pledge assets to secure such borrowings.
The above investment limitation cannot be changed without shareholder approval.
The following limitation, however, may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material change
in this limitation becomes effective.
The Fund will not invest more than 10% of its net assets in illiquid securities,
including repurchase agreements providing for settlement in more than seven days
after notice.
4
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Combined Statement of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940, as amended. In particular,
the Fund will comply with the various requirements of Rule 2a-7, which regulates
money market mutual funds. The Fund will determine the effective maturity of its
investments according to Rule 2a-7. The Fund may change these operational
policies to reflect changes in the laws and regulations without the approval of
its shareholders.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the Fund's business affairs and for exercising all
the Trust's powers except those reserved for the shareholders. An Executive
Committee of the Board of Trustees handles the Board's responsibilities between
meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the Trustees.
The adviser continually conducts investment research and supervision for the
Fund and is responsible for the purchase and sale of portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment advisory fee equal
to .20 of 1% of the Fund's average daily net assets. The adviser has
undertaken to reimburse the Fund up to the amount of the advisory fee for
operating expenses in excess of limitations established by certain states.
The adviser also may voluntarily choose to waive a portion of its fee or
reimburse other expenses of the Fund, but reserves the right to terminate
such waiver or reimbursement at any time at its sole discretion.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services to
a number of investment companies. With over $72 billion invested across more
than 260 funds under management and/or administration by its subsidiaries,
as of December 31, 1994, Federated Investors is one of the largest mutual
fund investment managers in the United States. With more than 1,750
employees, Federated continues to be led by the management who founded the
company in 1955. Federated funds are
5
presently at work in and through 4,000 financial institutions nationwide.
More than 100,000 investment professionals have selected Federated funds for
their clients.
Both the Trust and the adviser have adopted strict codes of ethics governing the
conduct of all employees who manage the Fund and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Fund's
shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Trustees, and could
result in severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for Institutional
Service Shares of the Fund. It is a Pennsylvania corporation organized on
November 14, 1969, and is the principal distributor for a number of investment
companies. Federated Securities Corp. is a subsidiary of Federated Investors.
SHAREHOLDER SERVICES. The Fund has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which the Fund may make payments up to .25 of 1% of the average
daily net asset value of the Institutional Service Shares, computed at an annual
rate, to obtain personal services for shareholders and provide maintenance of
shareholder accounts ("shareholder services"). From time to time and for such
periods as deemed appropriate, the amount stated above may be reduced
voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services will
either perform shareholder services directly or will select financial
institutions fees to perform shareholder services based upon shares owned by
their clients or customers. Financial institutions will receive fees based upon
shares owned by their clients or customers. The schedules of such fees and the
basis upon which such fees will be paid will be determined from time to time by
the Fund and Federated Shareholder Services.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate as specified
below:
<TABLE>
<CAPTION>
MAXIMUM FEE AVERAGE AGGREGATE DAILY NET ASSETS
-------------------- ------------------------------------
<C> <S>
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>
6
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares. Average
aggregate daily net assets include those of all mutual funds advised by
affiliates of Federated Investors. Federated Administrative Services may choose
voluntarily to waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, MA, is custodian for
the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Boston, MA, is transfer agent for the shares of, and dividend disbursing agent
for, the Fund. Federated Services Company is a subsidiary of Federated
Investors.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the Fund
are Arthur Andersen LLP, Pittsburgh, PA.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund attempts to stabilize the net asset value of shares at $1.00 by valuing
the portfolio securities using the amortized cost method. The net asset value
per share is determined by subtracting liabilities attributable to shares from
the value of Fund assets attributable to shares, and dividing the remainder by
the number of shares outstanding. The Fund cannot guarantee that its net asset
value will always remain at $1.00 per share.
The net asset value is determined at 12:00 noon, 3:00 p.m. (Eastern time), and
as of the close of trading (normally 4:00 p.m., Eastern time) on the New York
Stock Exchange, Monday through Friday, except on New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares may
be purchased either by wire or mail. The Fund reserves the right to reject any
purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
BY WIRE. To purchase by Federal Reserve wire, call the Fund before 5:00 p.m.
(Eastern time) to place an order. The order is considered received immediately.
Payment by federal funds must be received before 5:00 p.m. (Eastern time) that
day. Federal funds should be wired as follows: Federated Services Company, c/o
State Street Bank and Trust Company, Boston, MA; Attention: EDGEWIRE; For Credit
to: Treasury Obligations Fund--Institutional Service Shares; Fund Number (this
number can be found on the account statement or by contacting the Fund); Group
Number or Order Number; Nom-
7
inee or Institution Name; and ABA Number 011000028. The Fund reserves the right
to refuse any request made by wire or telephone and may limit the amount
involved or the number of telephone redemptions. This procedure may be modified
or terminated by the transfer agent or the Fund.
BY MAIL. To purchase by mail, send a check made payable to Treasury Obligations
Fund--Institutional Service Shares to: Federated Services Company, Treasury
Obligations Fund, P.O. Box 8600, Boston, MA 02266-8600. Orders by mail are
considered received when payment by check is converted into federal funds. This
is normally the next business day after the check is received.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $25,000. Eligibility for investment in the
Fund is contingent upon an investor accumulating and maintaining a minimum
aggregate investment of $200,000,000 in Federated Funds within a twelve-month
period.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent charges a fee based on the level of subaccounting services
rendered. Financial institutions may charge or pass through subaccounting fees
as part of or in addition to normal trust or agency account fees. They may also
charge fees for other services provided which may be related to the ownership of
Fund shares. This prospectus should, therefore, be read together with any
agreement between the customer and the financial institution with regard to the
services provided, the fees charged for those services, and any restrictions and
limitations imposed. State securities laws may require certain financial
institutions such as depository institutions to register as dealers.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases and
redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional shares of the Fund unless cash
payments are requested by writing to the Fund. Shares purchased by wire before
5:00 p.m. (Eastern time) begin earning dividends that day. Shares purchased by
check begin earning dividends the day after the check is converted into federal
funds.
CAPITAL GAINS
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund will distribute in cash or additional shares any realized
net long-term capital gains at least once every 12 months.
8
REDEEMING SHARES
- --------------------------------------------------------------------------------
Shares are redeemed at their net asset value next determined after Federated
Services Company receives the redemption request. Redemptions will be made on
days on which the Fund computes its net asset value. Redemption requests must be
received in proper form and can be made as described below.
BY MAIL
Shares may be redeemed by sending a written request to: Treasury Obligations
Fund, Federated Services Company, P.O. Box 8600, Boston, MA 02266-8600. The
written request should state: Treasury Obligations Fund--Institutional Service
Shares; shareholder's name; the account number; and the share or dollar amount
requested. Sign the request exactly as the shares are registered. Shareholders
should call the Fund for assistance in redeeming by mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or overnight insured mail with the written request
to Federated Services Company, 500 Victory Road-2nd Floor, North Quincy, MA
02171.
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Fund, or a redemption payable other than to
the shareholder of record must have their signatures guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and the transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of the
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Fund. Telephone instructions may be
recorded and if reasonable procedures are not followed by the Fund, it may be
liable for losses due to unauthorized or fraudulent telephone instructions. An
authorization form permitting the Fund to accept telephone
9
requests must first be completed. Authorization forms and information on this
service are available from Federated Securities Corp.
If the redemption request is received before 5:00 p.m. (Eastern time), the
proceeds will be wired the same day to the shareholder's account at a domestic
commercial bank which is a member of the Federal Reserve System, and those
shares redeemed will not be entitled to that day's dividend. A daily dividend
will be paid on shares redeemed if the redemption request is received after 5:00
p.m. (Eastern time). However, the proceeds are not wired until the following
business day. Under limited circumstances, arrangements may be made with the
distributor for same-day payment of proceeds, without that day's dividend, for
redemption requests received before 5:00 p.m. (Eastern time). The Fund reserves
the right to refuse any request made by wire or telephone and may limit the
amount involved or the number of telephone redemptions. This procedure may be
modified or terminated by the transfer agent or the Fund.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail", should be considered. If at any time
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000, or the
aggregate investment in Federated Funds falls below the required minimum of
$200,000,000 to be maintained from and after twelve months from account opening,
due to shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights, except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder approval will be
sought only for certain changes in the Trust's or the Fund's operation and for
the election of Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders for this purpose shall be called by the
Trustees upon the written request of shareholders owning at least 10% of the
outstanding shares of the Trust.
10
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies whether dividends
and distributions are received in cash or as additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston, & Donnelly, counsel to the Trust, Fund
shares may be subject to personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania to the extent that the
portfolio securities in the Fund would be subject to such taxes if owned
directly by residents of those jurisdictions.
OTHER STATE AND LOCAL TAXES. Shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax laws.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
The Fund also offers another class of shares called Institutional Shares.
Institutional Shares are sold at net asset value primarily to accounts for which
financial institutions act in an agency or fiduciary capacity and are subject to
a minimum initial investment of $25,000.
All classes are subject to certain of the same expenses.
11
Institutional Shares are distributed with no 12b-1 fees. Currently,
Institutional Shares are accruing no shareholder services fees.
Expense differences between classes may affect the performance of each class.
To obtain more information and a prospectus for any other class investors may
call 1-800-235-4669.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time, the Fund advertises its yield and effective yield for shares.
Performance figures will be calculated separately for each class of shares.
Yield represents the annualized rate of income earned on an investment over a
seven-day period. It is the annualized dividends earned during the period on an
investment shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but when annualized, the income earned by an
investment is assumed to be reinvested daily. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.
Advertisements and sales literature may also refer to total return. Total return
represents the change, over a specified period of time, in the value of an
investment in the shares after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
12
TREASURY OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT VALUE
- ---------------- ------------------------------------------------------------ --------------
<C> <S> <C>
SHORT TERM U.S. TREASURY OBLIGATIONS--25.5%
- ---------------------------------------------------------------------------------
(a) U.S. TREASURY BILLS--16.7%
------------------------------------------------------------
$681,000,000 6.830% - 5.550%, 8/17/1995 - 5/30/1996 $ 666,042,514
------------------------------------------------------------ --------------
U.S. TREASURY NOTES--8.8%
------------------------------------------------------------
350,500,000 3.875% - 9.375%, 8/31/1995 - 5/15/1996 351,865,208
------------------------------------------------------------ --------------
TOTAL SHORT-TERM U.S. TREASURY OBLIGATIONS 1,017,907,722
------------------------------------------------------------ --------------
(b) REPURCHASE AGREEMENTS--74.9%
- ---------------------------------------------------------------------------------
50,000,000 Aubrey G. Lanston and Company, Inc., 5.850%, dated
7/31/1995, due 8/1/1995 50,000,000
------------------------------------------------------------
150,000,000 BA Securities, Inc., 5.810%, dated 7/31/1995, due 8/1/1995 150,000,000
------------------------------------------------------------
155,000,000 B.T. Securities Corporation, 5.840%, dated 7/31/1995, due
8/1/1995 155,000,000
------------------------------------------------------------
170,000,000 BOT Securites, Inc., Tokyo, 5.800%, dated 7/31/1995, due
8/1/1995 170,000,000
------------------------------------------------------------
54,800,000 Barclays de Zoete Wedd Securities, Inc., 5.840%, dated
7/31/1995, due 8/1/1995 54,800,000
------------------------------------------------------------
195,000,000 Bear, Stearns and Co., 5.810%, dated 7/31/1995, due 8/1/1995 195,000,000
------------------------------------------------------------
195,000,000 Chemical Banking Corp., 5.820%, dated 7/31/1995, due
8/1/1995 195,000,000
------------------------------------------------------------
195,000,000 Daiwa Securities America, Inc., 5.800%, dated 7/31/1995, due
8/1/1995 195,000,000
------------------------------------------------------------
80,000,000 Deutsche Bank Government Securities, Inc., 5.850%, dated
7/31/1995, due 8/1/1995 80,000,000
------------------------------------------------------------
100,000,000 Dresdner Securities (USA), Inc., 5.820%, dated 7/31/1995,
due 8/1/1995 100,000,000
------------------------------------------------------------
195,000,000 First Chicago Capital Markets, Inc., 5.820%, dated
7/31/1995, due 8/1/1995 195,000,000
------------------------------------------------------------
170,000,000 Fuji Securities, Inc., 5.820%, dated 7/31/1995, due 8/7/1995 170,000,000
------------------------------------------------------------
40,000,000 HSBC Securities, Inc., 5.850%, dated 7/31/1995, due 8/1/1995 40,000,000
------------------------------------------------------------
40,000,000 Harris, Nesbitt Thomson, 5.840%, dated 7/31/1995, due
8/1/1995 40,000,000
------------------------------------------------------------
</TABLE>
13
TREASURY OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT VALUE
- ---------------- ------------------------------------------------------------ --------------
<C> <S> <C>
REPURCHASE AGREEMENTS--CONTINUED
- ---------------------------------------------------------------------------------
U.S. TREASURY NOTES--CONTINUED
------------------------------------------------------------
$ 30,000,000 J.P. Morgan Securities, Inc., 5.840%, dated 7/31/1995, due
8/1/1995 $ 30,000,000
------------------------------------------------------------
195,000,000 Lehman Government Securities, Inc., 5.850%, dated 7/31/1995,
due 8/1/1995 195,000,000
------------------------------------------------------------
93,000,000 (c) Merrill Lynch, Pierce, Fenner and Smith, 5.700%, dated
7/7/1995, due 9/5/1995 93,000,000
------------------------------------------------------------
195,000,000 National Westminster Bank USA, NY, 5.820%, dated 7/31/1995,
due 8/1/1995 195,000,000
------------------------------------------------------------
195,000,000 Nations Bank of North Carolina, 5.800%, dated 7/31/1995, due
8/1/1995 195,000,000
------------------------------------------------------------
120,000,000 Nikko Securities, 5.820%, dated 7/31/1995, due 8/1/1995 120,000,000
------------------------------------------------------------
50,000,000 State Street Bank and Trust Co., 5.820%, dated 7/31/1995,
due 8/1/1995 50,000,000
------------------------------------------------------------
195,000,000 SBC Capital Markets, 5.820%, dated 7/31/1995, due 8/1/1995 195,000,000
------------------------------------------------------------
120,000,000 UBS Securities, Inc., 5.800%, dated 7/31/1995, due 8/1/1995 120,000,000
------------------------------------------------------------ --------------
TOTAL REPURCHASE AGREEMENTS 2,982,800,000
------------------------------------------------------------ --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (d) $4,000,707,722
------------------------------------------------------------ --------------
--------------
<FN>
(a) Each issue shows the rate of discount at the time of purchase.
(b) Repurchase agreements are fully collateralized by U.S. Treasury obligations
based on market prices at the date of the portfolio. The investments in the
repurchase agreements are through participation in joint accounts with
other Federated funds.
(c) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement.
(d) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($3,984,922,273) at July 31, 1995.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
14
TREASURY OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------
Investments in repurchase agreements $2,982,800,000
- ------------------------------------------------------
Investments in securities 1,017,907,722
- ------------------------------------------------------ --------------
Total investments at amortized cost and value $4,000,707,722
- ------------------------------------------------------------------------
Cash 211,164
- ------------------------------------------------------------------------
Income receivable 6,723,593
- ------------------------------------------------------------------------
Receivable for shares sold 256,869
- ------------------------------------------------------------------------ --------------
Total assets 4,007,899,348
- ------------------------------------------------------------------------
LIABILITIES:
- ------------------------------------------------------
Payable for shares redeemed 5,235,807
- ------------------------------------------------------
Income distribution payable 17,005,739
- ------------------------------------------------------
Accrued expenses 735,529
- ------------------------------------------------------ --------------
Total liabilities 22,977,075
- ------------------------------------------------------------------------ --------------
NET ASSETS for 3,984,922,273 shares outstanding $3,984,922,273
- ------------------------------------------------------------------------ --------------
--------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- ------------------------------------------------------------------------
Institutional Shares:
($3,441,067,673 DIVIDED BY 3,441,067,673 shares outstanding) $ 1.00
- ------------------------------------------------------------------------ --------------
--------------
Institutional Service Shares:
($543,854,600 DIVIDED BY 543,854,600 shares outstanding) $ 1.00
- ------------------------------------------------------------------------ --------------
--------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
15
TREASURY OBLIGATIONS FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------------------------
Interest $183,952,583
- -------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------
Investment advisory fee $ 6,522,177
- ----------------------------------------------------------------
Administrative personnel and services fee 2,468,644
- ----------------------------------------------------------------
Custodian fees 233,169
- ----------------------------------------------------------------
Transfer agent and dividend disbursing agent fees
and expenses 74,251
- ----------------------------------------------------------------
Directors'/Trustees' fees 13,914
- ----------------------------------------------------------------
Auditing fees 12,951
- ----------------------------------------------------------------
Legal fees 4,583
- ----------------------------------------------------------------
Portfolio accounting fees 239,767
- ----------------------------------------------------------------
Shareholder services fee--Institutional Shares 7,734,539
- ----------------------------------------------------------------
Shareholder services fee--Institutional Service
Shares 418,181
- ----------------------------------------------------------------
Share registration costs 626,125
- ----------------------------------------------------------------
Printing and postage 19,858
- ----------------------------------------------------------------
Insurance premiums 43,861
- ----------------------------------------------------------------
Taxes 20,066
- ----------------------------------------------------------------
Miscellaneous 15,591
- ---------------------------------------------------------------- -----------
Total expenses 18,447,677
- ----------------------------------------------------------------
Deduct--
- --------------------------------------------------
Waiver of investment advisory fee $3,742,710
- --------------------------------------------------
Waiver of shareholder services
fee--Institutional Shares 7,734,539 11,477,249
- -------------------------------------------------- ---------- -----------
Net expenses 6,970,428
- ------------------------------------------------------------------------------- ------------
Net investment income $176,982,155
- ------------------------------------------------------------------------------- ------------
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
16
TREASURY OBLIGATIONS FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
---------------------------------
1995 1994
---------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------
OPERATIONS--
- ---------------------------------------------
Net investment income $ 176,982,155 $ 81,337,110
- --------------------------------------------- ---------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ---------------------------------------------
Distributions from net investment income
- ---------------------------------------------
Institutional Shares (167,724,558) (81,325,025)
- ---------------------------------------------
Institutional Service Shares (9,257,597) (12,085)
- --------------------------------------------- ---------------- ---------------
Change in net assets resulting from
distributions to shareholders (176,982,155) (81,337,110)
- --------------------------------------------- ---------------- ---------------
SHARE TRANSACTIONS--
- ---------------------------------------------
Proceeds from sale of Shares 19,110,121,123 9,791,368,504
- ---------------------------------------------
Net asset value of Shares issued to
shareholders in payment of distributions
declared 22,269,297 4,797,827
- ---------------------------------------------
Cost of Shares redeemed (17,739,330,600) (9,736,785,420)
- --------------------------------------------- ---------------- ---------------
Change in net assets resulting from share
transactions 1,393,059,820 59,380,911
- --------------------------------------------- ---------------- ---------------
Change in net assets 1,393,059,820 59,380,911
- ---------------------------------------------
NET ASSETS:
- ---------------------------------------------
Beginning of period 2,591,862,453 2,532,481,542
- --------------------------------------------- ---------------- ---------------
End of period $ 3,984,922,273 $ 2,591,862,453
- --------------------------------------------- ---------------- ---------------
---------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
17
TREASURY OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Money Market Obligations 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 six diversified portfolios. The
financial statements included herein are only those of Treasury Obligations Fund
(the "Fund"). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held. The Fund offers
two classes of shares: Institutional Shares and Institutional Service Shares.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
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.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the custodian
bank to take possession, to have legally segregated in the Federal Reserve
Book Entry System, or to have segregated within the custodian bank's vault,
all securities held as collateral under repurchase agreement investment
transactions. Additionally, procedures have been established by the Fund to
monitor, on a daily basis, the market value of each repurchase agreement's
collateral to ensure that the value of collateral at least equals the
repurchase price paid under the repurchase agreement transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as brokers/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less
than the repurchase price on the sale of collateral securities.
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.
18
TREASURY OBLIGATIONS FUND
- --------------------------------------------------------------------------------
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At July 31, 1995, capital paid-in aggregated $3,984,922,273.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
-------------------------------
INSTITUTIONAL SHARES 1995 1994
- -------------------------------------------------- --------------- --------------
<S> <C> <C>
Shares sold 17,554,361,142 9,782,493,254
- --------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 18,926,732 4,785,818
- --------------------------------------------------
Shares redeemed (16,715,195,395) (9,736,785,420)
- -------------------------------------------------- --------------- --------------
Net change resulting from Institutional Shares
transactions 858,092,479 50,493,652
- -------------------------------------------------- --------------- --------------
--------------- --------------
<CAPTION>
YEAR ENDED JULY 31,
-------------------------------
INSTITUTIONAL SERVICE SHARES 1995 1994*
- -------------------------------------------------- --------------- --------------
<S> <C> <C>
Shares sold 1,555,759,981 8,875,250
- --------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 3,342,565 12,009
- --------------------------------------------------
Shares redeemed (1,024,135,205) --
- -------------------------------------------------- --------------- --------------
Net change resulting from Institutional Service
Shares transactions 534,967,341 8,887,259
- -------------------------------------------------- --------------- --------------
--------------- --------------
Net change resulting from share transactions 1,393,059,820 59,380,911
- -------------------------------------------------- --------------- --------------
--------------- --------------
<FN>
* For the period from July 5, 1994 (date of initial public offering) to July 31,
1994.
</TABLE>
19
TREASURY OBLIGATIONS FUND
- --------------------------------------------------------------------------------
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to 0.20 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive a portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund administrative personnel
and services. The FAS fee is based on the level of average aggregate daily net
assets of all funds advised by subsidiaries of Federated Investors for the
period. The administrative fee received during the period of the Administrative
Services Agreement shall be at least $125,000 per portfolio and $30,000 per each
additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25 of
1% of average net assets of the Fund for the period. This fee is to obtain
certain personal services for shareholders and to maintain shareholder accounts.
FSS may voluntarily choose to waive a portion of this fee. FSS can modify or
terminate this voluntary waiver at any time at its sole discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. The FServ fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
20
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
MONEY MARKET OBLIGATIONS TRUST
(Treasury Obligations Fund):
We have audited the accompanying statement of assets and liabilities of Treasury
Obligations Fund (an investment portfolio of Money Market Obligations Trust, a
Massachusetts business trust), including the schedule of portfolio investments,
as of July 31, 1995, the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for the periods presented. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of July
31, 1995, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Treasury Obligations Fund (an investment portfolio of Money Market Obligations
Trust) as of July 31, 1995, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for the periods presented, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
September 8, 1995
21
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Treasury Obligations Fund
Institutional Service Shares Federated Investors Tower
Pittsburgh, PA 15222-3779
- -------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, PA 15222-3779
- -------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, PA 15222-3779
- -------------------------------------------------------------------------------------------
Custodian
State Street Bank and Trust Company P.O. Box 8600
Boston, MA 02266-8600
- -------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, MA 02266-8600
- -------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, PA 15222
- -------------------------------------------------------------------------------------------
</TABLE>
22
- --------------------------------------------------------------------------------
TREASURY OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET
OBLIGATIONS TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
A Diversified Portfolio of
Money Market Obligations Trust,
an Open-End Management
Investment Company
Prospectus dated September 30,
1995
[LOGO] FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 60934N872
9110208A-SS (9/95) [RECYCLED PAPER LOGO]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRIME OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
The Institutional Shares of Prime Obligations Fund (the "Fund") offered by this
prospectus represent interests in a diversified portfolio of Money Market
Obligations Trust (the "Trust"), an open-end management investment company (a
mutual fund). The Fund invests in money market securities to provide current
income consistent with stability of principal.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR 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 THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE FUND
ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN BE
NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Combined Statement of Additional Information dated
September 30, 1995, with the Securities and Exchange Commission. The information
contained in the Combined Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Combined Statement
of Additional Information, which is in paper form only, or a paper copy of this
prospectus, if you have received your prospectus electronically, free of charge
by calling 1-800-235-4669. To obtain other information, or make inquiries about
the Fund, contact the Fund at the address listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated September 30, 1995
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Risks 7
Investment Limitations 7
Regulatory Compliance 7
TRUST INFORMATION 8
- ------------------------------------------------------
Management of the Trust 8
Distribution of Shares 9
Administration of the Fund 9
NET ASSET VALUE 10
- ------------------------------------------------------
INVESTING IN THE FUND 10
- ------------------------------------------------------
Share Purchases 10
Minimum Investment Required 10
Subaccounting Services 11
Certificates and Confirmations 11
Dividends 11
Capital Gains 11
REDEEMING SHARES 11
- ------------------------------------------------------
By Mail 11
Telephone Redemption 12
Accounts with Low Balances 13
SHAREHOLDER INFORMATION 13
- ------------------------------------------------------
Voting Rights 13
Massachusetts Partnership Law 13
TAX INFORMATION 14
- ------------------------------------------------------
Federal Income Tax 14
Pennsylvania Corporate and
Personal Property Taxes 14
OTHER CLASSES OF SHARES 14
- ------------------------------------------------------
PERFORMANCE INFORMATION 15
- ------------------------------------------------------
FINANCIAL STATEMENTS 16
- ------------------------------------------------------
INDEPENDENT AUDITORS' REPORT 30
- ------------------------------------------------------
ADDRESSES 31
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)......... None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)............................................... None
Contingent Deferred Sales Charge (as a percentage of original purchase price or
redemption proceeds, as applicable)............................................... None
Redemption Fee (as a percentage of amount redeemed, if applicable).................. None
Exchange Fee........................................................................ None
</TABLE>
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<S> <C> <C>
Management Fee (after waiver)(1)..................................................... 0.07%
12b-1 Fee............................................................................ None
Total Other Expenses................................................................. 0.13%
Shareholder Services Fee(2)............................................. 0.00%
Total Operating Expenses(3).......................................................... 0.20%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
0.20%.
(2) The maximum shareholder services fee is 0.25%.
(3) The total operating expenses would have been 0.58% absent the voluntary
waiver of a portion of the management fee and the shareholder services fee.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "INVESTING IN INSTITUTIONAL SHARES" AND "MONEY MARKET OBLIGATIONS
TRUST INFORMATION". WIRE-TRANSFERRED REDEMPTIONS OF LESS THAN $5,000 MAY BE
SUBJECT TO ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
- ----------------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and (2)
redemption at the end of each time period.......... $2 $ 6 $11 $ 26
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
PRIME OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of the Independent Public Accountants on page
30.
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
------------------------------------------------------------------
1995 1994 1993 1992 1991 1990(A)
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------
Net investment income 0.06 0.03 0.03 0.05 0.07 0.03
- -----------------------------------------
LESS DISTRIBUTIONS
- -----------------------------------------
Distributions from net investment
income (0.06) (0.03) (0.03) (0.05) (0.07) (0.03)
- ----------------------------------------- ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------- ------ ------ ------ ------ ------ ------
TOTAL RETURN (B) 5.65% 3.47% 3.25% 4.74% 7.30% 2.89%
- -----------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------
Expenses 0.20% 0.20% 0.20% 0.20% 0.20% 0.20%(c)
- -----------------------------------------
Net investment income 5.60% 3.47% 3.20% 4.53% 6.54% 8.21%(c)
- -----------------------------------------
Expense waiver/reimbursement (d) 0.38% 0.14% 0.09% 0.10% 0.24% 0.68%(c)
- -----------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------
Net assets, end of period (000 omitted) $2,457,797 $1,250,979 $1,098,159 $917,418 $473,593 $34,777
- -----------------------------------------
</TABLE>
(a) Reflects operations for the period from March 26, 1990 (date of initial
public investment) to July 31, 1990.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated October 3, 1988. The Declaration of Trust permits the Trust to
offer separate series of shares representing interests in separate portfolios of
securities. The shares in any one portfolio may be offered in separate classes.
With respect to this Fund, as of the date of this prospectus, the Trustees have
established two classes of shares known as Institutional Shares and
Institutional Service Shares. This prospectus relates only to Institutional
Shares of the Fund, which are designed primarily for financial institutions as a
convenient means of accumulating an interest in a professionally managed,
diversified portfolio investing primarily in short-term money market securities.
A minimum initial investment of $25,000 is required.
Eligibility for investment in the Fund is contingent upon an investor
accumulating and maintaining a minimum aggregate investment of $200,000,000 in
Federated funds within a twelve-month period. For this purpose, 1) an investor
is defined as a financial institution or its collective customers, including
affiliate financial institutions and their collective customers, or other
institutions that are determined to qualify by Federated Securities Corp., and
2) Federated funds are those mutual funds which are distributed by Federated
Securities Corp., or are advised by or administered by investment advisers or
administrators affiliated with Federated Securities Corp. ("Federated Funds").
An investor's minimum investment will be calculated by combining all accounts
the investor maintains with the Federated Funds, which includes the Fund.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income consistent
with stability of principal. This investment objective cannot be changed without
shareholder approval. While there is no assurance that the Fund will achieve its
investment objective, it endeavors to do so by following the investment policies
described in this prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing primarily in a portfolio
of money market securities maturing in 13 months or less. The average maturity
of the securities in the Fund's portfolio, computed on a dollar-weighted basis,
will be 90 days or less. Unless indicated otherwise, investment policies may be
changed by the Trustees without shareholder approval. Shareholders will be
notified before any material change in these policies becomes effective.
ACCEPTABLE INVESTMENTS. The Fund invests in high quality money market
instruments that are either rated in the highest short-term rating category by
one or more nationally recognized statistical rating organizations ("NRSROs") or
are of comparable quality to securities having such ratings. Examples of these
instruments include, but are not limited to:
- domestic issues of corporate debt obligations, including variable rate
demand notes;
- commercial paper (including Canadian Commercial Paper and Europaper);
- certificates of deposit, demand and time deposits, bankers' acceptances
and other instruments of domestic and foreign banks and other deposit
institutions ("Bank Instruments");
- short-term credit facilities;
- asset-backed securities;
- obligations issued or guaranteed as to payment of principal and interest
by the U.S. government or one of its agencies or instrumentalities; and
- other money market instruments.
The Fund invests only in instruments denominated and payable in U.S. dollars.
VARIABLE RATE DEMAND NOTES. Variable rate demand notes are long-term debt
instruments that have variable or floating interest rates and provide the
Fund with the right to tender the security for repurchase at its stated
principal amount plus accrued interest. Such securities typically bear
interest at a rate that is intended to cause the securities to trade at
par. The interest rate may float or be adjusted at regular intervals
(ranging from daily to annually), and is normally based on a published
interest rate or interest rate index. Most variable rate demand notes allow
the Fund to demand the repurchase of the security on not more than seven
days prior notice. Other notes only permit the Fund to tender the security
at the time of each interest rate adjustment or at other fixed intervals.
See "Demand Features." The Fund treats variable rate demand notes as
maturing on the later of the date of the next interest rate adjustment or
the date on which the Fund may next tender the security for repurchase.
BANK INSTRUMENTS. The Fund only invests in Bank Instruments either issued
by an institution having capital, surplus and undivided profits over $100
million, or insured by the Bank Insurance Fund ("BIF") or the Savings
Association Insurance Fund ("SAIF"). Bank Instruments may include
Eurodollar Certificates of Deposit ("ECDs"), Yankee Certificates of Deposit
("Yankee CDs") and Eurodollar Time Deposits ("ETDs"). The Fund will treat
securities credit enhanced with a bank's letter of credit as Bank
Instruments.
ASSET-BACKED SECURITIES. Asset-backed securities are securities issued by
special purpose entities whose primary assets consist of a pool of loans or
accounts receivable. The securities may take the form of beneficial
interests in special purpose trusts, limited partnership interests, or
commercial paper or other debt securities issued by a special purpose
corporation. Although the securities often have some form of credit or
liquidity enhancement, payments on the securities depend predominantly upon
collections of the loans and receivables held by the issuer.
SHORT-TERM CREDIT FACILITIES. The Fund may enter into, or acquire
participations in, short-term borrowing arrangements with corporations,
consisting of either a short-term revolving credit facility or a master
note agreement payable upon demand. Under these arrangements, the
borrower may reborrow funds during the term of the facility. The Fund
treats any commitments to provide such advances as a standby commitment to
purchase the borrower's notes.
RATINGS. An NRSRO's highest rating category is determined without regard for
sub-categories and gradations. For example, securities rated A-1 or A-1+ by
Standard & Poor's Ratings Group ("S&P"), Prime-1 by Moody's Investors Service,
Inc. ("Moody's"), or F-1 (+ or -) by Fitch Investors Service, Inc. ("Fitch") are
all considered rated in the highest short-term rating category. The Fund will
follow applicable regulations in determining whether a security rated by more
than one NRSRO can be treated as being in the highest short-term rating
category; currently, such securities must be rated by two NRSROs in their
highest rating category. See "Regulatory Compliance."
REPURCHASE AGREEMENTS. Certain securities in which the Fund invests may be
purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/dealers, and other recognized financial
institutions sell securities to the Fund and agree at the time of sale to
repurchase them at a mutually agreed upon time and price. To the extent that the
seller does not repurchase the securities from the Fund, the Fund could receive
less than the repurchase price on any sale of such securities.
CREDIT ENHANCEMENT. Certain of the Fund's acceptable investments may be credit
enhanced by a guaranty, letter of credit, or insurance. The Fund typically
evaluates the credit quality and ratings of credit-enhanced securities based
upon the financial condition and ratings of the party providing the credit
enhancement (the "credit enhancer"), rather than the issuer. Generally, the Fund
will not treat credit-enhanced securities as having been issued by the credit
enhancer for diversification purposes. However, under certain circumstances
applicable regulations may require the Fund to treat the securities as having
been issued by both the issuer and the credit enhancer. The bankruptcy,
receivership, or default of the credit enhancer will adversely affect the
quality and marketability of the underlying security.
DEMAND FEATURES. The Fund may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount (usually with accrued interest) within a fixed period (usually
seven days) following a demand by the Fund. The demand feature may be issued by
the issuer of the underlying securities, a dealer in the securities, or by
another third party, and may not be transferred separately from the underlying
security. The Fund uses these arrangements to provide the Fund with liquidity
and not to protect against changes in the market value of the underlying
securities. The bankruptcy, receivership, or default by the issuer of the demand
feature, or a default on the underlying security or other event that terminates
the demand feature before its exercise, will adversely affect the liquidity of
the underlying security. Demand features that are exercisable even after a
payment default on the underlying security may be treated as a form of credit
enhancement.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Fund to miss a price or yield considered to be advantageous. Settlement dates
may be a month or more after entering into these transactions, and the market
values
of the securities purchased may vary from the purchase prices. Accordingly, the
Fund may pay more or less than the market value of the securities on the
settlement date.
The Fund may dispose of a commitment prior to settlement if the adviser deems it
appropriate to do so. In addition, the Fund may enter into transactions to sell
its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Fund may realize short-term profits or losses upon the sale of such
commitments.
LENDING OF PORTFOLIO SECURITIES. In order to generate additional income, the
Fund may lend its portfolio securities on a short-term or long-term basis, or
both, to broker/dealers, banks, or other institutional borrowers of securities.
The Fund will only enter into loan arrangements with broker/ dealers, banks, or
other institutions which the adviser has determined are creditworthy under
guidelines established by the Fund's Trustees and will receive collateral at all
times equal to at least 100% of the value of the securities loaned. There is the
risk that when lending portfolio securities, the securities may not be available
to the Fund on a timely basis and the Fund may, therefore, lose the opportunity
to sell the securities at a desirable price. In addition, in the event that a
borrower of securities would file for bankruptcy or become insolvent,
disposition of the securities may be delayed pending court action.
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest in restricted
securities. Restricted securities are any securities in which the Fund may
otherwise invest pursuant to its investment objective and policies but which are
subject to restrictions on resale under federal securities law. However, the
Fund will limit investments in illiquid securities, including certain restricted
securities not determined by the Trustees to be liquid, non-negotiable time
deposits, and repurchase agreements providing for settlement in more than seven
days after notice, to 10% of its net assets.
The Fund may invest in commercial paper issued in reliance on the exemption from
registration afforded by Section 4(2) of the Securities Act of 1933. Section
4(2) commercial paper is restricted as to disposition under federal securities
law, and is generally sold to institutional investors, such as the Fund, who
agree that they are purchasing the paper for investment purposes and not with a
view to public distribution. Any resale by the purchaser must be in an exempt
transaction. Section 4(2) commercial paper is normally resold to other
institutional investors like the Fund through or with the assistance of the
issuer or investment dealers who make a market in Section 4(2) commercial paper,
thus providing liquidity. The Fund believes that Section 4(2) commercial paper
and possibly certain other restricted securities which meet the criteria for
liquidity established by the Trustees of the Fund are quite liquid. The Fund
intends, therefore, to treat the restricted securities which meet the criteria
for liquidity established by the Trustees, including Section 4(2) commercial
paper, as determined by the Fund's investment adviser, as liquid and not subject
to the investment limitation applicable to illiquid securities. In addition,
because Section 4(2) commercial paper is liquid, the Fund intends to not subject
such paper to the limitation applicable to restricted securities.
CONCENTRATION OF INVESTMENTS. The Fund may invest 25% or more of its total
assets in commercial paper issued by finance companies. The finance companies in
which the Fund intends to invest can be divided into two categories, commercial
finance companies and consumer finance companies. Commercial finance companies
are principally engaged in lending to corporations or other businesses. Consumer
finance companies are primarily engaged in lending to individuals. Captive
finance
companies or finance subsidiaries which exist to facilitate the marketing and
financial activities of their parent will, for purposes of industry
concentration, be classified in the industry of their parent's corporation.
Concentrating investments in any one industry may subject the Fund to more risk
than if it did not concentrate investments.
In addition, the Fund may invest 25% or more of the value of its total assets in
instruments issued by a U.S. branch of a domestic bank or savings and loan
having capital, surplus, and undivided profits in excess of $100,000,000 at the
time of investment.
INVESTMENT RISKS
ECDs, ETDs, Yankee CDs, Canadian Commercial Paper, and Europaper are subject to
different risks than domestic obligations of domestic banks or corporations.
Examples of these risks include international economic and political
developments, foreign governmental restrictions that may adversely affect the
payment of principal or interest, foreign withholding or other taxes on interest
income, difficulties in obtaining or enforcing a judgment against the issuing
entity, and the possible impact of interruptions in the flow of international
currency transactions. Risks may also exist for ECDs, ETDs, and Yankee CDs
because the banks issuing these instruments, or their domestic or foreign
branches, are not necessarily subject to the same regulatory requirements that
apply to domestic banks, such as reserve requirements, loan limitations,
examinations, accounting, auditing, recordkeeping, and the public availability
of information. These factors will be carefully considered by the Fund's adviser
in selecting investments for the Fund.
INVESTMENT LIMITATIONS
The Fund will not borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a money market instrument for a percentage
of its cash value with an agreement to buy it back on a set date) or pledge
securities except, under certain circumstances, the Fund may borrow up to
one-third of the value of its total assets and pledge assets to secure such
borrowings. This investment limitation cannot be changed without shareholder
approval.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Combined Statement of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940, as amended. In particular,
the Fund will comply with the various requirements of Rule 2a-7 which regulates
money market mutual funds. For example, with limited exceptions, Rule 2a-7
prohibits the investment of more than 5% of the Fund's total assets in the
securities of any one issuer, although the Fund's investment limitation only
requires such 5% diversification with respect to 75% of its assets. The Fund
will invest more than 5% of its assets in any one issuer only under the
circumstances permitted by Rule 2a-7. The Fund will also determine the effective
maturity of its investments, as well as its ability to consider a security as
having received the requisite short-term ratings by NRSROs, according to Rule
2a-7. The Fund may change these operational policies to reflect changes in the
laws and regulations without the approval of its shareholders.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the Fund's business affairs and for exercising all
the Trust's powers except those reserved for the shareholders. An Executive
Committee of the Board of Trustees handles the Board's responsibilities between
meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the Trustees.
The adviser continually conducts investment research and supervision for the
Fund and is responsible for the purchase and sale of portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment advisory fee
equal to .20 of 1% of the Fund's average daily net assets. The adviser has
undertaken to reimburse the Fund up to the amount of the advisory fee for
operating expenses in excess of limitations established by certain states.
The adviser also may voluntarily choose to waive a portion of its fee or
reimburse other expenses of the Fund, but reserves the right to terminate
such waiver or reimbursement at any time at its sole discretion.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. With over $72 billion invested across
more than 260 funds under management and/or administration by its
subsidiaries, as of December 31, 1994, Federated Investors is one of the
largest mutual fund investment managers in the United States. With more
than 1,750 employees, Federated continues to be led by the management who
founded the company in 1955. Federated funds are presently at work in and
through 4,000 financial institutions nationwide. More than 100,000
investment professionals have selected Federated funds for their clients.
Both the Trust and the adviser have adopted strict codes of ethics governing the
conduct of all employees who manage the Fund and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Fund's
shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Trustees, and could
result in severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for Institutional Shares
of the Fund. It is a Pennsylvania corporation organized on November 14, 1969,
and is the principal distributor for a number of investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors.
SHAREHOLDER SERVICES. The Fund has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which the Fund may make payments up to .25 of 1% of the average
daily net asset value of the Institutional Shares, computed at an annual rate,
to obtain personal services for shareholders and provide maintenance of
shareholder accounts ("shareholder services"). From time to time and for such
periods as deemed appropriate, the amount stated above may be reduced
voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services will
either perform shareholder services directly or will select financial
institutions fees to perform shareholder services based upon shares owned by
their clients or customers. Financial institutions will receive fees based upon
shares owned by their clients or customers. The schedules of such fees and the
basis upon which such fees will be paid will be determined from time to time by
the Fund and Federated Shareholder Services.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate as specified
below:
<TABLE>
<CAPTION>
AVERAGE AGGREGATE
MAXIMUM FEE DAILY NET ASSETS
-------------------------------- ------------------------------------
<S> <C>
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares. Average
aggregate daily net assets include those of all mutual funds advised by
affiliates of Federated Investors. Federated Administrative Services may choose
voluntarily to waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, MA, is custodian for
the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Boston, MA, is transfer agent for the shares of, and dividend disbursing agent
for, the Fund. Federated Services Company is a subsidiary of Federated
Investors.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the Fund
are Arthur Andersen LLP, Pittsburgh, PA.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund attempts to stabilize the net asset value of shares at $1.00 by valuing
the portfolio securities using the amortized cost method. The net asset value
per share is determined by subtracting liabilities attributable to shares from
the value of Fund assets attributable to shares, and dividing the remainder by
the number of shares outstanding. The Fund cannot guarantee that its net asset
value will always remain at $1.00 per share.
The net asset value is determined at 12:00 noon, 3:00 p.m. (Eastern time), and
as of the close of trading (normally 4:00 p.m., Eastern time) on the New York
Stock Exchange, Monday through Friday, except on New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares may
be purchased either by wire or mail. The Fund reserves the right to reject any
purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
BY WIRE. To purchase by Federal Reserve wire, call the Fund before 5:00 p.m.
(Eastern time) to place an order. The order is considered received immediately.
Payment by federal funds must be received before 5:00 p.m. (Eastern time) that
day. Federal funds should be wired as follows: Federated Services Company, c/o
State Street Bank and Trust Company, Boston, MA; Attention: EDGEWIRE; For Credit
to: Prime Obligations Fund-Institutional Shares; Fund Number (this number can be
found on the account statement or by contacting the Fund); Group Number or Order
Number; Nominee or Institution Name; and ABA Number 011000028. The Fund reserves
the right to refuse any request made by wire or telephone and may limit the
amount involved or the number of telephone redemptions. This procedure may be
modified or terminated by the transfer agent or the Fund.
BY MAIL. To purchase by mail, send a check made payable to Prime Obligations
Fund-Institutional Shares to: Federated Services Company, Prime Obligations
Fund, P.O. Box 8600, Boston, MA 02266-8600. Orders by mail are considered
received when payment by check is converted into federal funds. This is normally
the next business day after the check is received.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $25,000. Eligibility for investment in the
Fund is contingent upon an investor accumulating and maintaining a minimum
aggregate investment of $200,000,000 in Federated Funds within a twelve-month
period.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent charges a fee based on the level of subaccounting services
rendered. Financial institutions may charge or pass through subaccounting fees
as part of or in addition to normal trust or agency account fees. They may also
charge fees for other services provided which may be related to the ownership of
Fund shares. This prospectus should, therefore, be read together with any
agreement between the customer and the financial institution with regard to the
services provided, the fees charged for those services, and any restrictions and
limitations imposed. State securities laws may require certain financial
institutions such as depository institutions to register as dealers.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases and
redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional shares of the Fund unless cash
payments are requested by writing to the Fund. Shares purchased by wire before
5:00 p.m. (Eastern time) begin earning dividends that day. Shares purchased by
check begin earning dividends the day after the check is converted into federal
funds.
CAPITAL GAINS
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund will distribute in cash or additional shares any realized
net long-term capital gains at least once every 12 months.
REDEEMING SHARES
- --------------------------------------------------------------------------------
Shares are redeemed at their net asset value next determined after Federated
Services Company receives the redemption request. Redemptions will be made on
days on which the Fund computes its net asset value. Redemption requests must be
received in proper form and can be made as described below.
BY MAIL
Shares may be redeemed by sending a written request to: Prime Obligations Fund,
Federated Services Company, P.O. Box 8600, Boston, MA 02266-8600. The written
request should state: Prime Obligations Fund-Institutional Shares; shareholder's
name; the account number; and the share or dollar amount
requested. Sign the request exactly as the shares are registered. Shareholders
should call the Fund for assistance in redeeming by mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or overnight insured mail with the written request
to Federated Services Company, 500 Victory Road-2nd Floor, North Quincy, MA
02171.
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Fund, or a redemption payable other than to
the shareholder of record must have their signatures guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and the transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of the
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Fund. Telephone instructions may be
recorded and if reasonable procedures are not followed by the Fund, it may be
liable for losses due to unauthorized or fraudulent telephone instructions. An
authorization form permitting the Fund to accept telephone requests must first
be completed. Authorization forms and information on this service are available
from Federated Securities Corp.
If the redemption request is received before 5:00 p.m. (Eastern time), the
proceeds will be wired the same day to the shareholder's account at a domestic
commercial bank which is a member of the Federal Reserve System, and those
shares redeemed will not be entitled to that day's dividend. A daily dividend
will be paid on shares redeemed if the redemption request is received after 5:00
p.m. (Eastern time). However, the proceeds are not wired until the following
business day. Under limited circumstances, arrangements may be made with the
distributor for same-day payment of proceeds, without that day's dividend, for
redemption requests received before 5:00 p.m. (Eastern time). The Fund reserves
the right to refuse any request made by wire or telephone and may limit the
amount involved or the number of telephone redemptions. This procedure may be
modified or terminated by the transfer agent or the Fund.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail", should be considered. If at any time
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000, or the
aggregate investment in Federated Funds falls below the required minimum of
$200,000,000 to be maintained from and after twelve months from account opening,
due to shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights, except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder approval will be
sought only for certain changes in the Trust's or the Fund's operation and for
the election of Trustees under certain circumstances. As of September 6, 1995,
Peoples Bank, Bridgeport, CT, owned approximately 149,257,858 shares (36.34%) of
the voting securities of the Fund's Institutional Service Shares and, therefore,
may, for certain purposes, be deemed to control the Fund and be able to affect
the outcome of certain matters presented for a vote of shareholders.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders for this purpose shall be called by the
Trustees upon the written request of shareholders owning at least 10% of the
outstanding shares of the Trust.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur
only if the Trust itself cannot meet its obligations to indemnify shareholders
and pay judgments against them.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies whether dividends
and distributions are received in cash or as additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston, & Donnelly, counsel to the Trust, Fund
shares may be subject to personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania to the extent that the
portfolio securities in the Fund would be subject to such taxes if owned
directly by residents of those jurisdictions.
OTHER STATE AND LOCAL TAXES. Shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax laws.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
The Fund also offers another class of shares called Institutional Service
Shares. Institutional Service Shares are sold at net asset value primarily to
accounts for which financial institutions act in an agency of fiduciary capacity
and are subject to a minimum initial investment of $25,000.
All classes are subject to certain of the same expenses.
Institutional Service Shares are distributed with no 12b-1 fees but are subject
to shareholder services fees.
Expense differences between classes may affect the performance of each class.
To obtain more information and a prospectus for any other class, investors may
call 1-800-235-4669.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time, the Fund advertises its yield and effective yield for shares.
Performance figures will be calculated separately for each class of shares.
Yield represents the annualized rate of income earned on an investment over a
seven-day period. It is the annualized dividends earned during the period on an
investment shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but when annualized, the income earned by an
investment is assumed to be reinvested daily. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.
Advertisements and sales literature may also refer to total return. Total return
represents the change, over a specified period of time, in the value of an
investment in the shares after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
PRIME OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------- --------------
<C> <C> <S> <C>
BANK NOTES--2.9%
- ---------------------------------------------------------------------------------
BANKING--2.9%
-------------------------------------------------------------
$ 15,000,000 Bank One, Milwaukee, WI N.A., 5.960%, 9/11/1995 $ 15,000,989
-------------------------------------------------------------
72,000,000 Mellon Bank NA, Pittsburgh, 6.000%-6.240%,
10/20/1995-11/28/1995 72,000,000
------------------------------------------------------------- --------------
TOTAL BANK NOTES 87,000,989
------------------------------------------------------------- --------------
(A)COMMERCIAL PAPER--62.2%
- ---------------------------------------------------------------------------------
BANKING--19.0%
-------------------------------------------------------------
15,000,000 ABN AMRO N.A., Finance, Inc., (Guaranteed by ABN AMRO Bank
N.V., Amsterdam), 5.809%, 12/27/1995 14,651,583
-------------------------------------------------------------
140,000,000 Abbey National N.A. Corp., (Guaranteed by Abbey National Bank
PLC, London), 5.709%-6.348%, 8/9/1995-1/22/1996 138,243,523
-------------------------------------------------------------
108,000,000 Canadian Imperial Holdings, Inc., (Guaranteed by Canadian
Imperial Bank of Commerce, Toronto), 5.754%-6.452%,
8/16/1995-10/23/1995 107,135,856
-------------------------------------------------------------
24,700,000 City of Cleveland, (Union Bank of Switzerland, Zurich LOC),
5.950%, 10/4/1995 24,700,000
-------------------------------------------------------------
79,100,000 Commerzbank U.S. Finance, Inc., (Guaranteed by Commerzbank
AG, Frankfurt), 5.749%-5.841%, 10/25/1995-1/22/1996 77,608,628
-------------------------------------------------------------
45,000,000 Dresdner US Finance, 5.936%-5.984%, 9/5/1995-12/21/1995 44,486,209
-------------------------------------------------------------
24,000,000 J.P. Morgan & Co., Inc., 5.756%, 1/22/1996 23,351,560
-------------------------------------------------------------
70,547,000 Queensland Alumina Ltd., (Credit Suisse, Zurich LOC),
5.940%-6.101%, 8/1/1995-9/14/1995 70,285,776
-------------------------------------------------------------
19,800,000 Royal Bank of Canada, Montreal, 5.636%, 1/11/1996 19,308,718
-------------------------------------------------------------
1,000,000 Societe Generale North America, Inc., (Guaranteed by Societe
Generale, Paris), 5.724%, 1/23/1996 972,972
-------------------------------------------------------------
40,000,000 Toronto Dominion Holdings (USA), Inc., (Guaranteed by
Toronto-Dominion Bank), 5.870%-6.390%, 9/7/1995-12/8/1995 39,464,261
------------------------------------------------------------- --------------
Total 560,209,086
------------------------------------------------------------- --------------
</TABLE>
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------- --------------
<C> <C> <S> <C>
(A)COMMERCIAL PAPER--CONTINUED
- ---------------------------------------------------------------------------------
DIVERSIFIED--0.7%
-------------------------------------------------------------
$ 20,000,000 Rockwell International Corp., 6.336%, 9/13/1995 $ 19,853,322
------------------------------------------------------------- --------------
ELECTRONICS--0.3%
-------------------------------------------------------------
10,000,000 Hewlett-Packard Co., 5.918%, 9/28/1995 9,906,072
------------------------------------------------------------- --------------
FINANCE-COMMERCIAL--23.6%
-------------------------------------------------------------
90,400,000 Asset Securitization Cooperative Corp., 5.740%-5.969%,
8/30/1995-10/20/1995 89,658,264
-------------------------------------------------------------
122,700,000 Beta Finance, Inc., 5.630%-6.450%, 8/14/1995-1/29/1996 121,182,697
-------------------------------------------------------------
80,700,000 CIESCO, Inc., 5.687%-6.356%, 8/25/1995-10/27/1995 79,963,340
-------------------------------------------------------------
116,000,000 CIT Group Holdings, Inc., 5.760%-6.217%, 8/29/1995-12/22/1995 114,015,734
-------------------------------------------------------------
31,000,000 Corporate Asset Funding Co., Inc. (CAFCO), 5.843%-6.271%,
9/15/1995-11/7/1995 30,721,169
-------------------------------------------------------------
24,620,000 Falcon Asset Securitization Corp., 5.752%-5.815%,
10/26/1995-1/22/1996 24,135,125
-------------------------------------------------------------
135,000,000 General Electric Capital Corp., 5.750%-6.317%,
9/5/1995-1/23/1996 133,106,685
-------------------------------------------------------------
81,575,000 PREFCO-Preferred Receivables Funding Co., 5.868%-6.113%,
8/9/1995-11/15/1995 80,720,284
-------------------------------------------------------------
26,300,000 Sheffield Receivables Corp., 6.100%-6.101%,
8/9/1995-8/10/1995 26,263,600
------------------------------------------------------------- --------------
Total 699,766,898
------------------------------------------------------------- --------------
FINANCE-RETAIL--10.7%
-------------------------------------------------------------
109,000,000 Associates Corp. of North America, 5.699%-6.163%,
8/4/1995-10/31/1995 108,314,529
-------------------------------------------------------------
118,700,000 Ford Credit Receivables Funding, Inc., 5.720%-6.207%,
8/24/1995-10/23/1995 117,685,863
-------------------------------------------------------------
67,000,000 New Center Asset Trust, A1+/P1 Series, 6.214%-6.314%,
10/10/1995-10/20/1995 66,164,109
-------------------------------------------------------------
25,000,000 Norwest Financial, Inc., 5.833%, 10/2/1995 24,752,431
------------------------------------------------------------- --------------
Total 316,916,932
------------------------------------------------------------- --------------
</TABLE>
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------- --------------
<C> <C> <S> <C>
(A)COMMERCIAL PAPER--CONTINUED
- ---------------------------------------------------------------------------------
INSURANCE--1.6%
-------------------------------------------------------------
$ 15,000,000 City of New York G.O. 1995-B, (FGIC-SPI Gtd.),
6.241%, 8/22/1995 $ 15,000,000
-------------------------------------------------------------
10,175,000 Marsh & McLennan Cos., Inc., 5.944%-6.453%,
9/25/1995-12/1/1995 10,027,975
-------------------------------------------------------------
22,783,000 Prospect Street Senior Portfolio, L.P., (Guaranteed by
Financial Security Assurance, Inc.), 5.805%-6.273%,
9/6/1995-11/10/1995 22,506,070
------------------------------------------------------------- --------------
Total 47,534,045
------------------------------------------------------------- --------------
MISCELLANEOUS--0.5%
-------------------------------------------------------------
15,000,000 Procter & Gamble Co., 5.845%, 10/16/1995 14,817,917
------------------------------------------------------------- --------------
OIL & OIL FINANCE--1.1%
-------------------------------------------------------------
33,000,000 Koch Industries, Inc., 5.851%, 8/1/1995 33,000,000
------------------------------------------------------------- --------------
TELECOMMUNICATIONS--4.7%
-------------------------------------------------------------
139,620,000 AT&T Corp., 5.739%-6.373%, 8/11/1995-12/1/1995 138,331,098
------------------------------------------------------------- --------------
TOTAL COMMERCIAL PAPER 1,840,335,370
------------------------------------------------------------- --------------
CORPORATE NOTES--1.2%
- ---------------------------------------------------------------------------------
BANKING--1.2%
-------------------------------------------------------------
33,787,467 Banc One Corp., 6.363%, 4/15/1996 33,787,468
------------------------------------------------------------- --------------
TOTAL CORPORATE NOTES 33,787,468
------------------------------------------------------------- --------------
(B)VARIABLE RATE INSTRUMENTS--18.3%
- ---------------------------------------------------------------------------------
BANKING--13.1%
-------------------------------------------------------------
4,045,000 500 South Front St. L.P., Series A, (Huntington National
Bank, Columbus, OH LOC), 5.890%, 8/3/1995 4,045,000
-------------------------------------------------------------
6,500,000 500 South Front St. L.P., Series B, (Huntington National
Bank, Columbus, OH LOC), 5.890%, 8/3/1995 6,500,000
-------------------------------------------------------------
10,927,000 Adesa Funding Corp., (Bank One, Indianapolis, IN LOC),
5.840%, 8/3/1995 10,927,000
-------------------------------------------------------------
8,455,000 Alexandria Executive Club L.P., (Huntington National Bank,
Columbus, OH LOC), 5.890%, 8/3/1995 8,455,000
-------------------------------------------------------------
</TABLE>
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------- --------------
<C> <C> <S> <C>
(B)VARIABLE RATE INSTRUMENTS--CONTINUED
- ---------------------------------------------------------------------------------
BANKING--CONTINUED
-------------------------------------------------------------
$ 9,000,000 Arrow N.A., Inc., (Huntington National Bank, Columbus, OH
LOC), 5.885%, 8/3/1995 $ 9,000,000
-------------------------------------------------------------
16,900,000 Beverly California Corp., (PNC Bank, N.A. LOC),
5.869%, 8/7/1995 16,900,000
-------------------------------------------------------------
1,642,790 Bowling Green Manor L.P., (Huntington National Bank,
Columbus, OH LOC), 5.885%, 8/3/1995 1,642,790
-------------------------------------------------------------
17,400,000 CMH Funding, (Huntington National Bank, Columbus, OH LOC),
6.060%, 1/3/1996 17,400,000
-------------------------------------------------------------
21,558,000 Capital One Funding Corp. 1994-C, Series 1994-C, (Bank One,
Cleveland, N.A. LOC), 6.069%, 8/3/1995 21,558,000
-------------------------------------------------------------
26,300,000 Capital One Funding Corp. 1995-A, (Bank One, Indianapolis, IN
LOC), 5.885%, 8/3/1995 26,300,000
-------------------------------------------------------------
17,446,000 Capital One Funding Corp. 1995-B, (Liberty National Bank &
Trust Co. LOC), 5.840%, 8/3/1995 17,446,000
-------------------------------------------------------------
1,062,337 Clyde Manor L.P., (Huntington National Bank, Columbus, OH
LOC), 5.885%, 8/3/1995 1,062,337
-------------------------------------------------------------
2,500,000 Crystal Enterprises, Inc., Series 1995, (NBD Bank, N.A.,
Detroit, MI LOC), 5.900%, 8/3/1995 2,500,000
-------------------------------------------------------------
4,020,000 Eastwinds Investment, Ltd., (Huntington National Bank,
Columbus, OH LOC), 5.890%, 8/3/1995 4,020,000
-------------------------------------------------------------
5,000,000 G.M.H. Enterprises, Inc., Series 1995, (National City Bank,
Cleveland, OH LOC), 5.950%, 8/3/1995 5,000,000
-------------------------------------------------------------
2,420,000 Grote Family L.P., (Huntington National Bank, Columbus, OH
LOC), 5.885%, 8/3/1995 2,420,000
-------------------------------------------------------------
12,300,000 Hunt Club Apartments, Inc., (Huntington National Bank,
Columbus, OH LOC), 5.890%, 8/2/1995 12,300,000
-------------------------------------------------------------
1,700,000 Jade Sterling Steel Co., Inc., (Huntington National Bank,
Columbus, OH LOC), 5.885%, 8/3/1995 1,700,000
-------------------------------------------------------------
4,200,000 Kokosing Construction Co., Inc., (National City Bank,
Cleveland, OH LOC), 5.950%, 8/2/1995 4,200,000
-------------------------------------------------------------
</TABLE>
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------- --------------
<C> <C> <S> <C>
(B)VARIABLE RATE INSTRUMENTS--CONTINUED
- ---------------------------------------------------------------------------------
BANKING--CONTINUED
-------------------------------------------------------------
$ 8,600,000 Mississippi Business Finance Corp., (Comerica Bank, Detroit,
MI LOC), 5.885%, 8/3/1995 $ 8,600,000
-------------------------------------------------------------
2,000,000 Mississippi Business Finance Corp., Series 1995 Plantation
Pointe, LP Project, (Amsouth Bank N.A., Birmingham LOC),
5.885%, 8/3/1995 2,000,000
-------------------------------------------------------------
4,885,000 Olen Corp., (National City Bank, Cleveland, OH LOC), 5.950%,
8/2/1995 4,885,000
-------------------------------------------------------------
1,800,000 Roby Company Ltd. Partnership, (Huntington National Bank,
Columbus, OH LOC), 5.850%, 8/3/1995 1,800,000
-------------------------------------------------------------
7,730,000 Roby Company Ltd. Partnership, (Huntington National Bank,
Columbus, OH LOC), 5.890%, 8/3/1995 7,730,000
-------------------------------------------------------------
13,450,000 Rooker, J.W., (Wachovia Bank of Georgia NA, Atlanta LOC),
5.896%, 8/2/1995 13,450,000
-------------------------------------------------------------
6,100,000 S.I.D.A. (Alabama) Miltope Project, Series 1994, (First
Alabama Bank, Birmingham LOC), 6.135%, 8/3/1995 6,100,000
-------------------------------------------------------------
11,100,000 S.I.D.A. (Alabama),TRB (Wellborn Cabinet, Inc.), (Amsouth
Bank N.A., Birmingham LOC), 5.930%, 8/2/1995 11,100,000
-------------------------------------------------------------
20,000,000 (c) SMM Trust, Series 1994-B, (Guaranteed by Morgan Guaranty
Trust Co., New York), 6.205%, 8/11/1995 19,999,686
-------------------------------------------------------------
101,000,000 (c) SMM Trust, Series 1995-I, (Guaranteed by Morgan Guaranty
Trust Co., New York), 5.895%, 8/1/1995 100,975,741
-------------------------------------------------------------
7,040,000 Shenandoah Partners L.P., (Huntington National Bank,
Columbus, OH LOC), 5.890%, 8/3/1995 7,040,000
-------------------------------------------------------------
3,418,000 Vista Funding Corp., (Bank One, Akron, N.A. LOC), 5.840%,
8/3/1995 3,418,000
-------------------------------------------------------------
6,569,000 Vista Funding Corp., (Fifth Third Bank of Northwestern OH
LOC), 5.885%, 8/3/1995 6,569,000
-------------------------------------------------------------
11,500,000 Vista Funding Corp., 1995-B, (Fifth Third Bank of
Northwestern OH LOC), 5.885%, 8/3/1995 11,500,000
-------------------------------------------------------------
1,011,431 Wauseon Manor II L.P., (Huntington National Bank, Columbus,
OH LOC), 5.885%, 8/3/1995 1,011,431
-------------------------------------------------------------
</TABLE>
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------- --------------
<C> <C> <S> <C>
(B)VARIABLE RATE INSTRUMENTS--CONTINUED
- ---------------------------------------------------------------------------------
BANKING--CONTINUED
-------------------------------------------------------------
$ 3,775,000 Wexner Heritage House, (Huntington National Bank, Columbus,
OH LOC), 5.885%, 8/3/1995 $ 3,775,000
-------------------------------------------------------------
2,445,000 YMCA of Central, OH, (Huntington National Bank, Columbus, OH
LOC), 5.890%, 8/3/1995 2,445,000
------------------------------------------------------------- --------------
Total 385,774,985
------------------------------------------------------------- --------------
ELECTRICAL EQUIPMENT--1.2%
-------------------------------------------------------------
8,840,838 GS Funding Corp., (Guaranteed by General Electric Co.),
5.869%, 7/31/1995 8,840,838
-------------------------------------------------------------
6,000,000 Lauda Air, Luftfahrt, (Guaranteed by General Electric Co.),
5.881%, 8/1/1995 6,000,000
-------------------------------------------------------------
19,918,165 Northwest Airlines, Inc., (Guaranteed by General Electric
Co.), 5.897%, 7/31/1995 19,918,165
------------------------------------------------------------- --------------
Total 34,759,003
------------------------------------------------------------- --------------
FINANCE-COMMERCIAL--1.2%
-------------------------------------------------------------
36,000,000 Money Market Auto Loan Trust, (Guaranteed by Cap MAC),
6.015%, 8/15/1995 36,000,000
------------------------------------------------------------- --------------
FINANCE-RETAIL--1.1%
-------------------------------------------------------------
31,825,493 Carco Auto Loan Master Trust, Series 1993-2, Class A1,
5.785%, 8/15/1995 31,825,493
------------------------------------------------------------- --------------
INSURANCE--0.8%
-------------------------------------------------------------
25,000,000 (c) Peoples Security Life Insurance, 6.300%, 8/1/1995 25,000,000
------------------------------------------------------------- --------------
MUNICIPAL--0.9%
-------------------------------------------------------------
26,700,000 (c) Columbus, OH, 6.135%, 8/3/1995 26,700,000
------------------------------------------------------------- --------------
TOTAL VARIABLE RATE INSTRUMENTS 540,059,481
------------------------------------------------------------- --------------
(D)REPURCHASE AGREEMENTS--15.6%
- ---------------------------------------------------------------------------------
700,000 Bear, Stearns & Co., Inc., 5.81%, dated 7/31/1995, due
8/1/1995 700,000
-------------------------------------------------------------
135,748,000 First Chicago Capital Markets, Inc., 5.82%, dated 7/31/1995,
due 8/1/1995 135,748,000
-------------------------------------------------------------
147,451,000 Fuji Securities, Inc., 5.82%, dated 7/31/1995, due 8/1/1995 147,451,000
-------------------------------------------------------------
</TABLE>
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------- --------------
<C> <C> <S> <C>
(D)REPURCHASE AGREEMENTS--CONTINUED
- ---------------------------------------------------------------------------------
$ 10,516,000 PaineWebber, Inc., 5.85%, dated 7/31/1995, due 8/1/1995 $ 10,516,000
-------------------------------------------------------------
211,000 State Street Bank and Trust Co., 5.82%, dated 7/31/1995, due
8/1/1995 211,000
-------------------------------------------------------------
167,090,000 UBS Securities, Inc., 5.80%, dated 7/31/1995, due 8/1/1995 167,090,000
------------------------------------------------------------- --------------
TOTAL REPURCHASE AGREEMENTS 461,716,000
------------------------------------------------------------- --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (E) $2,962,899,308
------------------------------------------------------------- --------------
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
(b) Current rate and next reset date shown.
(c) Restricted Securities--Investment in securities not registered under the
Securities Act of 1933. At the end of the period, these amounted to 6.0% of
net assets.
(d) Repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated funds.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($2,958,751,318) at July 31, 1995.
The following acronyms are used throughout this portfolio:
<TABLE>
<S> <C>
LOC -- Letter of Credit
LP -- Limited Partnership
PLC -- Public Limited Company
TRB -- Taxable Revenue Bond
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------
Investments in repurchase agreements $ 461,716,000
- --------------------------------------------------------------
Investments in securities 2,501,183,308
- -------------------------------------------------------------- --------------
Total investments, at amortized cost and value $2,962,899,308
- -------------------------------------------------------------------------------
Income receivable 5,325,668
- -------------------------------------------------------------------------------
Receivable for shares sold 8,182,417
- ------------------------------------------------------------------------------- --------------
Total assets 2,976,407,393
- -------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------
Payable for shares redeemed 3,166,500
- --------------------------------------------------------------
Income distribution payable 10,170,581
- --------------------------------------------------------------
Accrued expenses 707,730
- --------------------------------------------------------------
Payable to Bank 3,611,264
- -------------------------------------------------------------- --------------
Total liabilities 17,656,075
- ------------------------------------------------------------------------------- --------------
NET ASSETS for 2,958,751,318 shares outstanding $2,958,751,318
- ------------------------------------------------------------------------------- --------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- -------------------------------------------------------------------------------
Institutional Shares:
($2,457,797,173/2,457,797,173 shares outstanding) $1.00
- ------------------------------------------------------------------------------- --------------
Institutional Service Shares:
($500,954,145/500,954,145 shares outstanding) $1.00
- ------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME OBLIGATIONS FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------
Interest $127,412,842
- ----------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------
Investment advisory fee $ 4,370,903
- -------------------------------------------------------------------
Administrative personnel and services fee 1,654,387
- -------------------------------------------------------------------
Custodian fees 244,453
- -------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 67,443
- -------------------------------------------------------------------
Directors'/Trustees' fees 8,283
- -------------------------------------------------------------------
Auditing fees 12,951
- -------------------------------------------------------------------
Legal fees 28,075
- -------------------------------------------------------------------
Portfolio accounting fees 190,089
- -------------------------------------------------------------------
Shareholder services fee--Institutional Shares 4,908,345
- -------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 554,723
- -------------------------------------------------------------------
Share registration costs 503,411
- -------------------------------------------------------------------
Printing and postage 25,638
- -------------------------------------------------------------------
Insurance premiums 49,287
- -------------------------------------------------------------------
Taxes 38,556
- -------------------------------------------------------------------
Miscellaneous 27,683
- ------------------------------------------------------------------- -----------
Total expenses 12,684,227
- -------------------------------------------------------------------
Deduct--
- ------------------------------------------------------
Waiver of investment advisory fee $2,828,160
- ------------------------------------------------------
Waiver of shareholder services fee--Institutional
Shares 4,908,345 7,736,505
- ------------------------------------------------------ ---------- -----------
Net expenses 4,947,722
- ---------------------------------------------------------------------------------- ------------
Net investment income $122,465,120
- ---------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME OBLIGATIONS FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
-----------------------------------
1995 1994
---------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------
Net investment income $ 122,465,120 $ 41,204,591
- ----------------------------------------------------------- ---------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------
Distributions from net investment income:
- -----------------------------------------------------------
Institutional Shares (109,911,005) (41,183,125)
- -----------------------------------------------------------
Institutional Service Shares (12,554,115) (21,466)
- ----------------------------------------------------------- ---------------- ---------------
Change in net assets resulting from distributions to
shareholders (122,465,120) (41,204,591)
- ----------------------------------------------------------- ---------------- ---------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------
Proceeds from sale of Shares 28,128,464,929 8,598,402,134
- -----------------------------------------------------------
Net asset value of Shares issued to shareholders in payment
of distributions declared 34,127,138 6,605,494
- -----------------------------------------------------------
Cost of Shares redeemed (26,464,207,220) (8,442,800,343)
- ----------------------------------------------------------- ---------------- ---------------
Change in net assets resulting from share transactions 1,698,384,847 162,207,285
- ----------------------------------------------------------- ---------------- ---------------
Change in net assets 1,698,384,847 162,207,285
- ----------------------------------------------------------- ---------------- ---------------
NET ASSETS:
- -----------------------------------------------------------
Beginning of period 1,260,366,471 1,098,159,186
- ----------------------------------------------------------- ---------------- ---------------
End of period $ 2,958,751,318 $ 1,260,366,471
- ----------------------------------------------------------- ---------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
1. ORGANIZATION
Money Market Obligations 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 six, diversified portfolios. The
financial statements presented herein present only those of Prime Obligations
Fund (the "Fund"). The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held. The
Fund offers two classes of shares; Institutional Shares and Institutional
Service Shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Fund could
receive less than the repurchase price on the sale of collateral
securities.
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.
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
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.
OTHER--Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At July 31, 1995, capital paid-in aggregated $2,958,751,318.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------------------
1995 1994
--------------- --------------
<S> <C> <C>
INSTITUTIONAL SHARES
- -----------------------------------------------------------
Shares Sold 23,850,176,668 8,582,784,664
- -----------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 27,352,248 6,585,754
- -----------------------------------------------------------
Shares redeemed (22,670,711,004) (8,436,550,343)
- ----------------------------------------------------------- --------------- --------------
Net change resulting from Institutional share
transactions 1,206,817,912 152,820,075
- ----------------------------------------------------------- --------------- --------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------------------
1995 1994*
--------------- --------------
<S> <C> <C>
INSTITUTIONAL SERVICE SHARES
- -----------------------------------------------------------
Shares Sold 4,278,288,261 15,617,470
- -----------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 6,774,890 19,740
- -----------------------------------------------------------
Shares redeemed (3,793,496,216) (6,250,000)
- ----------------------------------------------------------- --------------- --------------
Net change resulting from Institutional Service share
transactions 491,566,935 9,387,210
- ----------------------------------------------------------- --------------- --------------
Net change resulting from share transactions 1,698,384,847 162,207,285
- ----------------------------------------------------------- --------------- --------------
</TABLE>
* Reflects operations for the period from July 5, 1994, (date of initial public
offering) to July 31, 1994.
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .20 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive a portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") under the
Administrative Services Agreement provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain shareholder accounts. FSS may
voluntarily choose to waive a portion of this fee. FSS can modify or terminate
this voluntary waiver at any time at its sole discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ")serves as transfer and dividend disbursing agent for
the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
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 Trustees. The Fund will not incur any registration
costs upon such resales. Restricted securities are valued at amortized cost
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
in accordance with Rule 2a-7 under the Investment Company Act of 1940.
Additional information on each restricted security held at July 31, 1995 is as
follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
---------------------------------------------------- ----------- ------------
<S> <C> <C>
SMM Trust Series 1995-I 01/06/95 $100,970,760
SMM Trust Series 1994-B 05/31/95 20,144,056
Peoples Security Life Insurance, 6.300%, 8/1/1995 07/06/95 25,000,000
Columbus, OH, 6.135%, 8/3/1995 01/30/95 26,700,000
</TABLE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
MONEY MARKET OBLIGATIONS TRUST
(Prime Obligations Fund):
We have audited the accompanying statement of assets and liabilities of Prime
Obligations Fund (an investment portfolio of Money Market Obligations Trust, a
Massachusetts business trust), including the schedule of portfolio investments,
as of July 31, 1995, the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for the periods presented. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of July
31, 1995, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Prime
Obligations Fund (an investment portfolio of Money Market Obligations Trust) as
of July 31, 1995, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for the periods presented, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
September 8, 1995
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Prime Obligations Fund
Institutional Shares Federated Investors Tower
Pittsburgh, PA 15222-3779
- ----------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, PA 15222-3779
- ----------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, PA 15222-3779
- ----------------------------------------------------------------------------------------------
Custodian
State Street Bank and Trust Company P.O. Box 8600
Boston, MA 02266-8600
- ----------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, MA 02266-8600
- ----------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, PA 15222
- ----------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRIME OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET
OBLIGATIONS TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
A Diversified Portfolio of Money Market
Obligations Trust, an Open-End Management
Investment Company
Prospectus dated September 30, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 60934N203
9110205A-SS (9/95)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRIME OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
The Institutional Service Shares of Prime Obligations Fund (the "Fund") offered
by this prospectus represent interests in a diversified portfolio of Money
Market Obligations Trust (the "Trust"), an open-end management investment
company (a mutual fund). The Fund invests in money market securities to provide
current income consistent with stability of principal.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR 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 THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE FUND
ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN BE
NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Combined Statement of Additional Information dated
September 30, 1995, with the Securities and Exchange Commission. The information
contained in the Combined Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Combined Statement
of Additional Information, which is in paper form only, or a paper copy of this
prospectus, if you have received your prospectus electronically, free of charge
by calling 1-800-235-4669. To obtain other information, or make inquiries about
the Fund, contact the Fund at the address listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated September 30, 1995
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Risks 7
Investment Limitations 7
Regulatory Compliance 7
TRUST INFORMATION 8
- ------------------------------------------------------
Management of the Trust 8
Distribution of Shares 9
Administration of the Trust 9
NET ASSET VALUE 10
- ------------------------------------------------------
INVESTING IN THE FUND 10
- ------------------------------------------------------
Share Purchases 10
Minimum Investment Required 10
Subaccounting Services 11
Certificates and Confirmations 11
Dividends 11
Capital Gains 11
REDEEMING SHARES 11
- ------------------------------------------------------
By Mail 11
Telephone Redemption 12
Accounts with Low Balances 13
SHAREHOLDER INFORMATION 13
- ------------------------------------------------------
Voting Rights 13
Massachusetts Partnership Law 13
TAX INFORMATION 14
- ------------------------------------------------------
Federal Income Tax 14
Pennsylvania Corporate and
Personal Property Taxes 14
OTHER CLASSES OF SHARES 14
- ------------------------------------------------------
PERFORMANCE INFORMATION 15
- ------------------------------------------------------
FINANCIAL STATEMENTS 16
- ------------------------------------------------------
INDEPENDENT AUDITORS' REPORT 30
- ------------------------------------------------------
ADDRESSES 31
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INSTITUTIONAL SERVICE SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)......... None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)............................................... None
Contingent Deferred Sales Charge (as a percentage of original purchase price or
redemption proceeds, as applicable)............................................... None
Redemption Fee (as a percentage of amount redeemed, if applicable).................. None
Exchange Fee........................................................................ None
</TABLE>
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<S> <C> <C>
Management Fee (after waiver)(1)..................................................... 0.07%
12b-1 Fee............................................................................ None
Total Other Expenses................................................................. 0.38%
Shareholder Services Fee................................................ 0.25%
Total Operating Expenses(2).......................................................... 0.45%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
0.20%.
(2) The total operating expenses would have been 0.58% absent the voluntary
waiver of a portion of the management fee.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL SERVICE SHARES OF
THE FUND WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE
DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES, SEE "INVESTING IN THE FUND" AND
"TRUST INFORMATION". WIRE-TRANSFERRED REDEMPTIONS OF LESS THAN $5,000 MAY BE
SUBJECT TO ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
- ----------------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and (2)
redemption at the end of each time period.......... $5 $14 $25 $ 57
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
PRIME OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of the Independent Public Accountants on page
30.
<TABLE>
<CAPTION>
YEAR ENDED JULY
31,
-----------------
1995 1994(A)
------ ------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
- -------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------
Net investment income 0.05 0.003
- -------------------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------------------
Distributions from net investment income (0.05) (0.003)
- ------------------------------------------------------------- ------ ------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
- ------------------------------------------------------------- ------ ------
TOTAL RETURN (B) 5.38% 0.30%
- -------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------
Expenses 0.45% 0.34%(c)
- -------------------------------------------------------------
Net investment income 5.66% 4.68%(c)
- -------------------------------------------------------------
Expense waiver/reimbursement (d) 0.13% 0.14%(c)
- -------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------
Net assets, end of period (000 omitted) $500,954 $9,387
- -------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from July 5, 1994 (date of initial public
offering) to July 31, 1994.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated October 3, 1988. The Declaration of Trust permits the Trust to
offer separate series of shares representing interests in separate portfolios of
securities. The shares in any one portfolio may be offered in separate classes.
With respect to this Fund, as of the date of this prospectus, the Trustees have
established two classes of shares known as Institutional Shares and
Institutional Service Shares. This prospectus relates only to Institutional
Service Shares of the Fund, which are designed primarily for financial
institutions as a convenient means of accumulating an interest in a
professionally managed, diversified portfolio primarily investing in short-term
money market securities. A minimum initial investment of $25,000 is required.
Eligibility for investment in the Fund is contingent upon an investor
accumulating and maintaining a minimum aggregate investment of $200,000,000 in
Federated funds within a twelve-month period. For this purpose, 1) an investor
is defined as a financial institution or its collective customers, including
affiliate financial institutions and their collective customers, or other
institutions that are determined to qualify by Federated Securities Corp., and
2) Federated funds are those mutual funds which are distributed by Federated
Securities Corp., or are advised by or administered by investment advisers or
administrators affiliated with Federated Securities Corp. ("Federated Funds").
An investor's minimum investment will be calculated by combining all accounts
the investor maintains with the Federated Funds, which includes the Fund.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income consistent
with stability of principal. This investment objective cannot be changed without
shareholder approval. While there is no assurance that the Fund will achieve its
investment objective, it endeavors to do so by following the investment policies
described in this prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing primarily in a portfolio
of money market securities maturing in 13 months or less. The average maturity
of the securities in the Fund's portfolio, computed on a dollar-weighted basis,
will be 90 days or less. Unless indicated otherwise, investment policies may be
changed by the Trustees without shareholder approval. Shareholders will be
notified before any material change in these policies becomes effective.
ACCEPTABLE INVESTMENTS. The Fund invests in high quality money market
instruments that are either rated in the highest short-term rating category by
one or more nationally recognized statistical rating organizations ("NRSROs") or
are of comparable quality to securities having such ratings. Examples of these
instruments include, but are not limited to:
- domestic issues of corporate debt obligations, including variable rate
demand notes;
- commercial paper (including Canadian Commercial Paper and Europaper);
- certificates of deposit, demand and time deposits, bankers' acceptances
and other instruments of domestic and foreign banks and other deposit
institutions ("Bank Instruments");
- short-term credit facilities;
- asset-backed securities;
- obligations issued or guaranteed as to payment of principal and interest
by the U.S. government or one of its agencies or instrumentalities; and
- other money market instruments.
The Fund invests only in instruments denominated and payable in U.S. dollars.
VARIABLE RATE DEMAND NOTES. Variable rate demand notes are long-term debt
instruments that have variable or floating interest rates and provide the
Fund with the right to tender the security for repurchase at its stated
principal amount plus accrued interest. Such securities typically bear
interest at a rate that is intended to cause the securities to trade at
par. The interest rate may float or be adjusted at regular intervals
(ranging from daily to annually), and is normally based on a published
interest rate or interest rate index. Most variable rate demand notes allow
the Fund to demand the repurchase of the security on not more than seven
days prior notice. Other notes only permit the Fund to tender the security
at the time of each interest rate adjustment or at other fixed intervals.
See "Demand Features." The Fund treats variable rate demand notes as
maturing on the later of the date of the next interest rate adjustment or
the date on which the Fund may next tender the security for repurchase.
BANK INSTRUMENTS. The Fund only invests in Bank Instruments either issued
by an institution having capital, surplus and undivided profits over $100
million, or insured by the Bank Insurance Fund ("BIF") or the Savings
Association Insurance Fund ("SAIF"). Bank Instruments may include
Eurodollar Certificates of Deposit ("ECDs"), Yankee Certificates of Deposit
("Yankee CDs") and Eurodollar Time Deposits ("ETDs"). The Fund will treat
securities credit enhanced with a bank's letter of credit as Bank
Instruments.
ASSET-BACKED SECURITIES. Asset-backed securities are securities issued by
special purpose entities whose primary assets consist of a pool of loans or
accounts receivable. The securities may take the form of beneficial
interests in special purpose trusts, limited partnership interests, or
commercial paper or other debt securities issued by a special purpose
corporation. Although the securities often have some form of credit or
liquidity enhancement, payments on the securities depend predominantly upon
collections of the loans and receivables held by the issuer.
SHORT-TERM CREDIT FACILITIES. The Fund may enter into, or acquire
participations in, short-term borrowing arrangements with corporations,
consisting of either a short-term revolving credit facility or a master
note agreement payable upon demand. Under these arrangements, the
borrower may reborrow funds during the term of the facility. The Fund
treats any commitments to provide such advances as a standby commitment to
purchase the borrower's notes.
RATINGS. An NRSRO's highest rating category is determined without regard for
sub-categories and gradations. For example, securities rated A-1 or A-1+ by
Standard & Poor's Ratings Group ("S&P"), Prime-1 by Moody's Investors Service,
Inc. ("Moody's"), or F-1 (+ or -) by Fitch Investors Service, Inc. ("Fitch") are
all considered rated in the highest short-term rating category. The Fund will
follow applicable regulations in determining whether a security rated by more
than one NRSRO can be treated as being in the highest short-term rating
category; currently, such securities must be rated by two NRSROs in their
highest rating category. See "Regulatory Compliance."
REPURCHASE AGREEMENTS. Certain securities in which the Fund invests may be
purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, broker/dealers, and other recognized financial
institutions sell securities to the Fund and agree at the time of sale to
repurchase them at a mutually agreed upon time and price. To the extent that the
seller does not repurchase the securities from the Fund, the Fund could receive
less than the repurchase price on any sale of such securities.
CREDIT ENHANCEMENT. Certain of the Fund's acceptable investments may be credit
enhanced by a guaranty, letter of credit, or insurance. The Fund typically
evaluates the credit quality and ratings of credit-enhanced securities based
upon the financial condition and ratings of the party providing the credit
enhancement (the "credit enhancer"), rather than the issuer. Generally, the Fund
will not treat credit-enhanced securities as having been issued by the credit
enhancer for diversification purposes. However, under certain circumstances
applicable regulations may require the Fund to treat the securities as having
been issued by both the issuer and the credit enhancer. The bankruptcy,
receivership, or default of the credit enhancer will adversely affect the
quality and marketability of the underlying security.
DEMAND FEATURES. The Fund may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount (usually with accrued interest) within a fixed period (usually
seven days) following a demand by the Fund. The demand feature may be issued by
the issuer of the underlying securities, a dealer in the securities, or by
another third party, and may not be transferred separately from the underlying
security. The Fund uses these arrangements to provide the Fund with liquidity
and not to protect against changes in the market value of the underlying
securities. The bankruptcy, receivership, or default by the issuer of the demand
feature, or a default on the underlying security or other event that terminates
the demand feature before its exercise, will adversely affect the liquidity of
the underlying security. Demand features that are exercisable even after a
payment default on the underlying security may be treated as a form of credit
enhancement.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Fund to miss a price or yield considered to be advantageous. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the
securities purchased may vary from the purchase prices. Accordingly, the Fund
may pay more or less than the market value of the securities on the settlement
date.
The Fund may dispose of a commitment prior to settlement if the adviser deems it
appropriate to do so. In addition, the Fund may enter into transactions to sell
its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Fund may realize short-term profits or losses upon the sale of such
commitments.
LENDING OF PORTFOLIO SECURITIES. In order to generate additional income, the
Fund may lend its portfolio securities on a short-term or long-term basis, or
both, to broker/dealers, banks, or other institutional borrowers of securities.
The Fund will only enter into loan arrangements with broker/dealers, banks, or
other institutions which the adviser has determined are creditworthy under
guidelines established by the Fund's Trustees and will receive collateral at all
times equal to at least 100% of the value of the securities loaned. There is the
risk that when lending portfolio securities, the securities may not be available
to the Fund on a timely basis and the Fund may, therefore, lose the opportunity
to sell the securities at a desirable price. In addition, in the event that a
borrower of securities would file for bankruptcy or become insolvent,
disposition of the securities may be delayed pending court action.
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest in restricted
securities. Restricted securities are any securities in which the Fund may
otherwise invest pursuant to its investment objective and policies but which are
subject to restrictions on resale under federal securities law. However, the
Fund will limit investments in illiquid securities, including certain restricted
securities not determined by the Trustees to be liquid, non-negotiable time
deposits, and repurchase agreements providing for settlement in more than seven
days after notice, to 10% of its net assets.
The Fund may invest in commercial paper issued in reliance on the exemption from
registration afforded by Section 4(2) of the Securities Act of 1933. Section
4(2) commercial paper is restricted as to disposition under federal securities
law, and is generally sold to institutional investors, such as the Fund, who
agree that they are purchasing the paper for investment purposes and not with a
view to public distribution. Any resale by the purchaser must be in an exempt
transaction. Section 4(2) commercial paper is normally resold to other
institutional investors like the Fund through or with the assistance of the
issuer or investment dealers who make a market in Section 4(2) commercial paper,
thus providing liquidity. The Fund believes that Section 4(2) commercial paper
and possibly certain other restricted securities which meet the criteria for
liquidity established by the Trustees of the Fund are quite liquid. The Fund
intends, therefore, to treat the restricted securities which meet the criteria
for liquidity established by the Trustees, including Section 4(2) commercial
paper, as determined by the Fund's investment adviser, as liquid and not subject
to the investment limitation applicable to illiquid securities. In addition,
because Section 4(2) commercial paper is liquid, the Fund intends to not subject
such paper to the limitation applicable to restricted securities.
CONCENTRATION OF INVESTMENTS. The Fund may invest 25% or more of its total
assets in commercial paper issued by finance companies. The finance companies in
which the Fund intends to invest can be divided into two categories, commercial
finance companies and consumer finance companies. Commercial finance companies
are principally engaged in lending to corporations or other businesses. Consumer
finance companies are primarily engaged in lending to individuals. Captive
finance
companies or finance subsidiaries which exist to facilitate the marketing and
financial activities of their parent will, for purposes of industry
concentration, be classified in the industry of their parent's corporation.
Concentrating investments in any one industry may subject the Fund to more risk
than if it did not concentrate investments.
In addition, the Fund may invest 25% or more of the value of its total assets in
instruments issued by a U.S. branch of a domestic bank or savings and loan
having capital, surplus, and undivided profits in excess of $100,000,000 at the
time of investment.
INVESTMENT RISKS
ECDs, ETDs, Yankee CDs, Canadian Commercial Paper, and Europaper are subject to
different risks than domestic obligations of domestic banks or corporations.
Examples of these risks include international economic and political
developments, foreign governmental restrictions that may adversely affect the
payment of principal or interest, foreign withholding or other taxes on interest
income, difficulties in obtaining or enforcing a judgment against the issuing
entity, and the possible impact of interruptions in the flow of international
currency transactions. Risks may also exist for ECDs, ETDs, and Yankee CDs
because the banks issuing these instruments, or their domestic or foreign
branches, are not necessarily subject to the same regulatory requirements that
apply to domestic banks, such as reserve requirements, loan limitations,
examinations, accounting, auditing, recordkeeping, and the public availability
of information. These factors will be carefully considered by the Fund's adviser
in selecting investments for the Fund.
INVESTMENT LIMITATIONS
The Fund will not borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a money market instrument for a percentage
of its cash value with an agreement to buy it back on a set date) or pledge
securities except, under certain circumstances, the Fund may borrow up to
one-third of the value of its total assets and pledge assets to secure such
borrowings. This investment limitation cannot be changed without shareholder
approval.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Combined Statement of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940, as amended. In particular,
the Fund will comply with the various requirements of Rule 2a-7 which regulates
money market mutual funds. For example, with limited exceptions, Rule 2a-7
prohibits the investment of more than 5% of the Fund's total assets in the
securities of any one issuer, although the Fund's investment limitation only
requires such 5% diversification with respect to 75% of its assets. The Fund
will invest more than 5% of its assets in any one issuer only under the
circumstances permitted by Rule 2a-7. The Fund will also determine the effective
maturity of its investments, as well as its ability to consider a security as
having received the requisite short-term ratings by NRSROs, according to Rule
2a-7. The Fund may change these operational policies to reflect changes in the
laws and regulations without the approval of its shareholders.
TRUST INFORMATION
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MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the Fund's business affairs and for exercising all
the Trust's powers except those reserved for the shareholders. An Executive
Committee of the Board of Trustees handles the Board's responsibilities between
meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the Trustees.
The adviser continually conducts investment research and supervision for the
Fund and is responsible for the purchase and sale of portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment advisory fee
equal to .20 of 1% of the Fund's average daily net assets. The adviser has
undertaken to reimburse the Fund up to the amount of the advisory fee for
operating expenses in excess of limitations established by certain states.
The adviser also may voluntarily choose to waive a portion of its fee or
reimburse other expenses of the Fund, but reserves the right to terminate
such waiver or reimbursement at any time at its sole discretion.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. With over $72 billion invested across
more than 260 funds under management and/or administration by its
subsidiaries, as of December 31, 1994, Federated Investors is one of the
largest mutual fund investment managers in the United States. With more
than 1,750 employees, Federated continues to be led by the management who
founded the company in 1955. Federated funds are presently at work in and
through 4,000 financial institutions nationwide. More than 100,000
investment professionals have selected Federated funds for their clients.
Both the Trust and the adviser have adopted strict codes of ethics governing the
conduct of all employees who manage the Fund and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Fund's
shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Board of Trustees,
and could result in severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for Institutional
Service Shares of the Fund. It is a Pennsylvania corporation organized on
November 14, 1969, and is the principal distributor for a number of investment
companies. Federated Securities Corp. is a subsidiary of Federated Investors.
SHAREHOLDER SERVICES. The Fund has entered into a Shareholder Services Agreement
with Federated Shareholder Services, a subsidiary of Federated Investors, under
which the Fund may make payments up to .25 of 1% of the average daily net asset
value of the Institutional Service Shares, computed at an annual rate, to obtain
personal services for shareholders and provide maintenance of shareholder
accounts ("shareholder services"). From time to time and for such periods as
deemed appropriate, the amount stated above may be reduced voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services will
either perform shareholder services directly or will select financial
institutions fees to perform shareholder services based upon shares owned by
their clients or customers. Financial institutions will receive fees based upon
shares owned by their clients or customers. The schedules of such fees and the
basis upon which such fees will be paid will be determined from time to time by
the Fund and Federated Shareholder Services.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate as specified
below:
<TABLE>
<CAPTION>
AVERAGE AGGREGATE
MAXIMUM FEE DAILY NET ASSETS
-------------------------------- --------------------------------
<S> <C>
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
on assets in excess of $750
.075 of 1% million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares. Average
aggregate daily net assets include those of all mutual funds advised by
affiliates of Federated Investors. Federated Administrative Services may choose
voluntarily to waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, MA, is custodian for the
securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Boston, MA, is transfer agent for the shares of, and dividend disbursing agent
for, the Fund. Federated Services Company is a subsidiary of Federated
Investors.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the Fund
are Arthur Andersen LLP, Pittsburgh, PA.
NET ASSET VALUE
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The Fund attempts to stabilize the net asset value of shares at $1.00 by valuing
the portfolio securities using the amortized cost method. The net asset value
per share is determined by subtracting liabilities attributable to shares from
the value of Fund assets attributable to shares, and dividing the remainder by
the number of shares outstanding. The Fund cannot guarantee that its net asset
value will always remain at $1.00 per share.
The net asset value is determined at 12:00 noon, 3:00 p.m. (Eastern time), and
as of the close of trading (normally 4:00 p.m., Eastern time) on the New York
Stock Exchange, Monday through Friday, except on New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares may
be purchased either by wire or mail. The Fund reserves the right to reject any
purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
BY WIRE. To purchase by Federal Reserve wire, call the Fund before 5:00 p.m.
(Eastern time) to place an order. The order is considered received immediately.
Payment by federal funds must be received before 5:00 p.m. (Eastern time) that
day. Federal funds should be wired as follows: Federated Services Company, c/o
State Street Bank and Trust Company, Boston, MA; Attention: EDGEWIRE; For Credit
to: Prime Obligations Fund-Institutional Service Shares; Fund Number (this
number can be found on the account statement or by contacting the Fund); Group
Number or Order Number; Nominee or Institution Name; and ABA Number 011000028.
The Fund reserves the right to refuse any request made by wire or telephone and
may limit the amount involved or the number of telephone redemptions. This
procedure may be modified or terminated by the transfer agent or the Fund.
BY MAIL. To purchase by mail, send a check made payable to Prime Obligations
Fund-Institutional Service Shares to: Federated Services Company, Prime
Obligations Fund, P.O. Box 8600, Boston, MA 02266-8600. Orders by mail are
considered received when payment by check is converted into federal funds. This
is normally the next business day after the check is received.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $25,000. Eligibility for investment in the
Fund is contingent upon an investor accumulating and maintaining a minimum
aggregate investment of $200,000,000 in Federated Funds within a twelve-month
period.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent charges a fee based on the level of subaccounting services
rendered. Financial institutions may charge or pass through subaccounting fees
as part of or in addition to normal trust or agency account fees. They may also
charge fees for other services provided which may be related to the ownership of
Fund shares. This prospectus should, therefore, be read together with any
agreement between the customer and the financial institution with regard to the
services provided, the fees charged for those services, and any restrictions and
limitations imposed. State securities laws may require certain financial
institutions such as depository institutions to register as dealers.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases and
redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional shares of the Fund unless cash
payments are requested by writing to the Fund. Shares purchased by wire before
5:00 p.m. (Eastern time) begin earning dividends that day. Shares purchased by
check begin earning dividends the day after the check is converted into federal
funds.
CAPITAL GAINS
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund will distribute in cash or additional shares any realized
net long-term capital gains at least once every 12 months.
REDEEMING SHARES
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Shares are redeemed at their net asset value next determined after Federated
Services Company receives the redemption request. Redemptions will be made on
days on which the Fund computes its net asset value. Redemption requests must be
received in proper form and can be made as described below.
BY MAIL
Shares may be redeemed by sending a written request to: Prime Obligations Fund,
Federated Services Company, P.O. Box 8600, Boston, MA 02266-8600. The written
request should state: Prime Obligations Fund-Institutional Service Shares;
shareholder's name; the account number; and the share or dollar
amount requested. Sign the request exactly as the shares are registered.
Shareholders should call the Fund for assistance in redeeming by mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or overnight insured mail with the written request
to Federated Services Company, 500 Victory Road-2nd Floor, North Quincy, MA
02171.
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Fund, or a redemption payable other than to
the shareholder of record must have their signatures guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and the transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of the
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Fund. Telephone instructions may be
recorded and if reasonable procedures are not followed by the Fund, it may be
liable for losses due to unauthorized or fraudulent telephone instructions. An
authorization form permitting the Fund to accept telephone requests must first
be completed. Authorization forms and information on this service are available
from Federated Securities Corp.
If the redemption request is received before 5:00 p.m. (Eastern time), the
proceeds will be wired the same day to the shareholder's account at a domestic
commercial bank which is a member of the Federal Reserve System, and those
shares redeemed will not be entitled to that day's dividend. A daily dividend
will be paid on shares redeemed if the redemption request is received after 5:00
p.m. (Eastern time). However, the proceeds are not wired until the following
business day. Under limited circumstances, arrangements may be made with the
distributor for same-day payment of proceeds, without that day's dividend, for
redemption requests received before 5:00 p.m. (Eastern time). The Fund reserves
the right to refuse any request made by wire or telephone and may limit the
amount involved or the number of telephone redemptions. This procedure may be
modified or terminated by the transfer agent or the Fund.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail", should be considered. If at any time
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000, or the
aggregate investment in Federated Funds falls below the required minimum of
$200,000,000 to be maintained from and after twelve months from account opening,
due to shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
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VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights, except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder approval will be
sought only for certain changes in the Trust's or the Fund's operation and for
the election of Trustees under certain circumstances. As of September 6, 1995,
Peoples Bank, Bridgeport, CT, owned approximately 149,257,858 shares (36.34%) of
the voting securities of the Fund's Institutional Service Shares and, therefore,
may, for certain purposes, be deemed to control the Fund and be able to affect
the outcome of certain matters presented for a vote of shareholders.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders for this purpose shall be called by the
Trustees upon the written request of shareholders owning at least 10% of the
outstanding shares of the Trust.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur
only if the Trust itself cannot meet its obligations to indemnify shareholders
and pay judgments against them.
TAX INFORMATION
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FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies whether dividends
and distributions are received in cash or as additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston, & Donnelly, counsel to the Trust, Fund
shares may be subject to personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania to the extent that the
portfolio securities in the Fund would be subject to such taxes if owned
directly by residents of those jurisdictions.
OTHER STATE AND LOCAL TAXES. Shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax laws.
OTHER CLASSES OF SHARES
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The Fund also offers another class of shares called Institutional Shares.
Institutional Shares are sold at net asset value primarily to accounts for which
financial institutions act in an agency or fiduciary capacity and are subject to
a minimum initial investment of $25,000.
All classes are subject to certain of the same expenses.
Institutional Shares are distributed with no 12b-1 fees. Currently,
Institutional Shares are accruing no shareholder services fees.
Expense differences between classes may affect the performance of each class.
To obtain more information and a prospectus for any other class, investors may
call 1-800-235-4669.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time, the Fund advertises its yield and effective yield for shares.
Performance figures will be calculated separately for each class of shares.
Yield represents the annualized rate of income earned on an investment over a
seven-day period. It is the annualized dividends earned during the period on an
investment shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but when annualized, the income earned by an
investment is assumed to be reinvested daily. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.
Advertisements and sales literature may also refer to total return. Total return
represents the change, over a specified period of time, in the value of an
investment in the shares after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
PRIME OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------- --------------
<C> <C> <S> <C>
BANK NOTES--2.9%
- ---------------------------------------------------------------------------------
BANKING--2.9%
-------------------------------------------------------------
$ 15,000,000 Bank One, Milwaukee, WI N.A., 5.960%, 9/11/1995 $ 15,000,989
-------------------------------------------------------------
72,000,000 Mellon Bank NA, Pittsburgh, 6.000%-6.240%,
10/20/1995-11/28/1995 72,000,000
------------------------------------------------------------- --------------
TOTAL BANK NOTES 87,000,989
------------------------------------------------------------- --------------
(A)COMMERCIAL PAPER--62.2%
- ---------------------------------------------------------------------------------
BANKING--19.0%
-------------------------------------------------------------
15,000,000 ABN AMRO N.A., Finance, Inc., (Guaranteed by ABN AMRO Bank
N.V., Amsterdam), 5.809%, 12/27/1995 14,651,583
-------------------------------------------------------------
140,000,000 Abbey National N.A. Corp., (Guaranteed by Abbey National Bank
PLC, London), 5.709%-6.348%, 8/9/1995-1/22/1996 138,243,523
-------------------------------------------------------------
108,000,000 Canadian Imperial Holdings, Inc., (Guaranteed by Canadian
Imperial Bank of Commerce, Toronto), 5.754%-6.452%,
8/16/1995-10/23/1995 107,135,856
-------------------------------------------------------------
24,700,000 City of Cleveland, (Union Bank of Switzerland, Zurich LOC),
5.950%, 10/4/1995 24,700,000
-------------------------------------------------------------
79,100,000 Commerzbank U.S. Finance, Inc., (Guaranteed by Commerzbank
AG, Frankfurt), 5.749%-5.841%, 10/25/1995-1/22/1996 77,608,628
-------------------------------------------------------------
45,000,000 Dresdner US Finance, 5.936%-5.984%, 9/5/1995-12/21/1995 44,486,209
-------------------------------------------------------------
24,000,000 J.P. Morgan & Co., Inc., 5.756%, 1/22/1996 23,351,560
-------------------------------------------------------------
70,547,000 Queensland Alumina Ltd., (Credit Suisse, Zurich LOC),
5.940%-6.101%, 8/1/1995-9/14/1995 70,285,776
-------------------------------------------------------------
19,800,000 Royal Bank of Canada, Montreal, 5.636%, 1/11/1996 19,308,718
-------------------------------------------------------------
1,000,000 Societe Generale North America, Inc., (Guaranteed by Societe
Generale, Paris), 5.724%, 1/23/1996 972,972
-------------------------------------------------------------
40,000,000 Toronto Dominion Holdings (USA), Inc., (Guaranteed by
Toronto-Dominion Bank), 5.870%-6.390%, 9/7/1995-12/8/1995 39,464,261
------------------------------------------------------------- --------------
Total 560,209,086
------------------------------------------------------------- --------------
</TABLE>
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------- --------------
<C> <C> <S> <C>
(A)COMMERCIAL PAPER--CONTINUED
- ---------------------------------------------------------------------------------
DIVERSIFIED--0.7%
-------------------------------------------------------------
$ 20,000,000 Rockwell International Corp., 6.336%, 9/13/1995 $ 19,853,322
------------------------------------------------------------- --------------
ELECTRONICS--0.3%
-------------------------------------------------------------
10,000,000 Hewlett-Packard Co., 5.918%, 9/28/1995 9,906,072
------------------------------------------------------------- --------------
FINANCE-COMMERCIAL--23.6%
-------------------------------------------------------------
90,400,000 Asset Securitization Cooperative Corp., 5.740%-5.969%,
8/30/1995-10/20/1995 89,658,264
-------------------------------------------------------------
122,700,000 Beta Finance, Inc., 5.630%-6.450%, 8/14/1995-1/29/1996 121,182,697
-------------------------------------------------------------
80,700,000 CIESCO, Inc., 5.687%-6.356%, 8/25/1995-10/27/1995 79,963,340
-------------------------------------------------------------
116,000,000 CIT Group Holdings, Inc., 5.760%-6.217%, 8/29/1995-12/22/1995 114,015,734
-------------------------------------------------------------
31,000,000 Corporate Asset Funding Co., Inc. (CAFCO), 5.843%-6.271%,
9/15/1995-11/7/1995 30,721,169
-------------------------------------------------------------
24,620,000 Falcon Asset Securitization Corp., 5.752%-5.815%,
10/26/1995-1/22/1996 24,135,125
-------------------------------------------------------------
135,000,000 General Electric Capital Corp., 5.750%-6.317%,
9/5/1995-1/23/1996 133,106,685
-------------------------------------------------------------
81,575,000 PREFCO-Preferred Receivables Funding Co., 5.868%-6.113%,
8/9/1995-11/15/1995 80,720,284
-------------------------------------------------------------
26,300,000 Sheffield Receivables Corp., 6.100%-6.101%,
8/9/1995-8/10/1995 26,263,600
------------------------------------------------------------- --------------
Total 699,766,898
------------------------------------------------------------- --------------
FINANCE-RETAIL--10.7%
-------------------------------------------------------------
109,000,000 Associates Corp. of North America, 5.699%-6.163%,
8/4/1995-10/31/1995 108,314,529
-------------------------------------------------------------
118,700,000 Ford Credit Receivables Funding, Inc., 5.720%-6.207%,
8/24/1995-10/23/1995 117,685,863
-------------------------------------------------------------
67,000,000 New Center Asset Trust, A1+/P1 Series, 6.214%-6.314%,
10/10/1995-10/20/1995 66,164,109
-------------------------------------------------------------
25,000,000 Norwest Financial, Inc., 5.833%, 10/2/1995 24,752,431
------------------------------------------------------------- --------------
Total 316,916,932
------------------------------------------------------------- --------------
</TABLE>
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------- --------------
<C> <C> <S> <C>
(A)COMMERCIAL PAPER--CONTINUED
- ---------------------------------------------------------------------------------
INSURANCE--1.6%
-------------------------------------------------------------
$ 15,000,000 City of New York G.O. 1995-B, (FGIC-SPI Gtd.),
6.241%, 8/22/1995 $ 15,000,000
-------------------------------------------------------------
10,175,000 Marsh & McLennan Cos., Inc., 5.944%-6.453%,
9/25/1995-12/1/1995 10,027,975
-------------------------------------------------------------
22,783,000 Prospect Street Senior Portfolio, L.P., (Guaranteed by
Financial Security Assurance, Inc.), 5.805%-6.273%,
9/6/1995-11/10/1995 22,506,070
------------------------------------------------------------- --------------
Total 47,534,045
------------------------------------------------------------- --------------
MISCELLANEOUS--0.5%
-------------------------------------------------------------
15,000,000 Procter & Gamble Co., 5.845%, 10/16/1995 14,817,917
------------------------------------------------------------- --------------
OIL & OIL FINANCE--1.1%
-------------------------------------------------------------
33,000,000 Koch Industries, Inc., 5.851%, 8/1/1995 33,000,000
------------------------------------------------------------- --------------
TELECOMMUNICATIONS--4.7%
-------------------------------------------------------------
139,620,000 AT&T Corp., 5.739%-6.373%, 8/11/1995-12/1/1995 138,331,098
------------------------------------------------------------- --------------
TOTAL COMMERCIAL PAPER 1,840,335,370
------------------------------------------------------------- --------------
CORPORATE NOTES--1.2%
- ---------------------------------------------------------------------------------
BANKING--1.2%
-------------------------------------------------------------
33,787,467 Banc One Corp., 6.363%, 4/15/1996 33,787,468
------------------------------------------------------------- --------------
TOTAL CORPORATE NOTES 33,787,468
------------------------------------------------------------- --------------
(B)VARIABLE RATE INSTRUMENTS--18.3%
- ---------------------------------------------------------------------------------
BANKING--13.1%
-------------------------------------------------------------
4,045,000 500 South Front St. L.P., Series A, (Huntington National
Bank, Columbus, OH LOC), 5.890%, 8/3/1995 4,045,000
-------------------------------------------------------------
6,500,000 500 South Front St. L.P., Series B, (Huntington National
Bank, Columbus, OH LOC), 5.890%, 8/3/1995 6,500,000
-------------------------------------------------------------
10,927,000 Adesa Funding Corp., (Bank One, Indianapolis, IN LOC),
5.840%, 8/3/1995 10,927,000
-------------------------------------------------------------
8,455,000 Alexandria Executive Club L.P., (Huntington National Bank,
Columbus, OH LOC), 5.890%, 8/3/1995 8,455,000
-------------------------------------------------------------
</TABLE>
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------- --------------
<C> <C> <S> <C>
(B)VARIABLE RATE INSTRUMENTS--CONTINUED
- ---------------------------------------------------------------------------------
BANKING--CONTINUED
-------------------------------------------------------------
$ 9,000,000 Arrow N.A., Inc., (Huntington National Bank, Columbus, OH
LOC), 5.885%, 8/3/1995 $ 9,000,000
-------------------------------------------------------------
16,900,000 Beverly California Corp., (PNC Bank, N.A. LOC),
5.869%, 8/7/1995 16,900,000
-------------------------------------------------------------
1,642,790 Bowling Green Manor L.P., (Huntington National Bank,
Columbus, OH LOC), 5.885%, 8/3/1995 1,642,790
-------------------------------------------------------------
17,400,000 CMH Funding, (Huntington National Bank, Columbus, OH LOC),
6.060%, 1/3/1996 17,400,000
-------------------------------------------------------------
21,558,000 Capital One Funding Corp. 1994-C, Series 1994-C, (Bank One,
Cleveland, N.A. LOC), 6.069%, 8/3/1995 21,558,000
-------------------------------------------------------------
26,300,000 Capital One Funding Corp. 1995-A, (Bank One, Indianapolis, IN
LOC), 5.885%, 8/3/1995 26,300,000
-------------------------------------------------------------
17,446,000 Capital One Funding Corp. 1995-B, (Liberty National Bank &
Trust Co. LOC), 5.840%, 8/3/1995 17,446,000
-------------------------------------------------------------
1,062,337 Clyde Manor L.P., (Huntington National Bank, Columbus, OH
LOC), 5.885%, 8/3/1995 1,062,337
-------------------------------------------------------------
2,500,000 Crystal Enterprises, Inc., Series 1995, (NBD Bank, N.A.,
Detroit, MI LOC), 5.900%, 8/3/1995 2,500,000
-------------------------------------------------------------
4,020,000 Eastwinds Investment, Ltd., (Huntington National Bank,
Columbus, OH LOC), 5.890%, 8/3/1995 4,020,000
-------------------------------------------------------------
5,000,000 G.M.H. Enterprises, Inc., Series 1995, (National City Bank,
Cleveland, OH LOC), 5.950%, 8/3/1995 5,000,000
-------------------------------------------------------------
2,420,000 Grote Family L.P., (Huntington National Bank, Columbus, OH
LOC), 5.885%, 8/3/1995 2,420,000
-------------------------------------------------------------
12,300,000 Hunt Club Apartments, Inc., (Huntington National Bank,
Columbus, OH LOC), 5.890%, 8/2/1995 12,300,000
-------------------------------------------------------------
1,700,000 Jade Sterling Steel Co., Inc., (Huntington National Bank,
Columbus, OH LOC), 5.885%, 8/3/1995 1,700,000
-------------------------------------------------------------
4,200,000 Kokosing Construction Co., Inc., (National City Bank,
Cleveland, OH LOC), 5.950%, 8/2/1995 4,200,000
-------------------------------------------------------------
</TABLE>
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------- --------------
<C> <C> <S> <C>
(B)VARIABLE RATE INSTRUMENTS--CONTINUED
- ---------------------------------------------------------------------------------
BANKING--CONTINUED
-------------------------------------------------------------
$ 8,600,000 Mississippi Business Finance Corp., (Comerica Bank, Detroit,
MI LOC), 5.885%, 8/3/1995 $ 8,600,000
-------------------------------------------------------------
2,000,000 Mississippi Business Finance Corp., Series 1995 Plantation
Pointe, LP Project, (Amsouth Bank N.A., Birmingham LOC),
5.885%, 8/3/1995 2,000,000
-------------------------------------------------------------
4,885,000 Olen Corp., (National City Bank, Cleveland, OH LOC), 5.950%,
8/2/1995 4,885,000
-------------------------------------------------------------
1,800,000 Roby Company Ltd. Partnership, (Huntington National Bank,
Columbus, OH LOC), 5.850%, 8/3/1995 1,800,000
-------------------------------------------------------------
7,730,000 Roby Company Ltd. Partnership, (Huntington National Bank,
Columbus, OH LOC), 5.890%, 8/3/1995 7,730,000
-------------------------------------------------------------
13,450,000 Rooker, J.W., (Wachovia Bank of Georgia NA, Atlanta LOC),
5.896%, 8/2/1995 13,450,000
-------------------------------------------------------------
6,100,000 S.I.D.A. (Alabama) Miltope Project, Series 1994, (First
Alabama Bank, Birmingham LOC), 6.135%, 8/3/1995 6,100,000
-------------------------------------------------------------
11,100,000 S.I.D.A. (Alabama),TRB (Wellborn Cabinet, Inc.), (Amsouth
Bank N.A., Birmingham LOC), 5.930%, 8/2/1995 11,100,000
-------------------------------------------------------------
20,000,000 (c) SMM Trust, Series 1994-B, (Guaranteed by Morgan Guaranty
Trust Co., New York), 6.205%, 8/11/1995 19,999,686
-------------------------------------------------------------
101,000,000 (c) SMM Trust, Series 1995-I, (Guaranteed by Morgan Guaranty
Trust Co., New York), 5.895%, 8/1/1995 100,975,741
-------------------------------------------------------------
7,040,000 Shenandoah Partners L.P., (Huntington National Bank,
Columbus, OH LOC), 5.890%, 8/3/1995 7,040,000
-------------------------------------------------------------
3,418,000 Vista Funding Corp., (Bank One, Akron, N.A. LOC), 5.840%,
8/3/1995 3,418,000
-------------------------------------------------------------
6,569,000 Vista Funding Corp., (Fifth Third Bank of Northwestern OH
LOC), 5.885%, 8/3/1995 6,569,000
-------------------------------------------------------------
11,500,000 Vista Funding Corp., 1995-B, (Fifth Third Bank of
Northwestern OH LOC), 5.885%, 8/3/1995 11,500,000
-------------------------------------------------------------
1,011,431 Wauseon Manor II L.P., (Huntington National Bank, Columbus,
OH LOC), 5.885%, 8/3/1995 1,011,431
-------------------------------------------------------------
</TABLE>
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------- --------------
<C> <C> <S> <C>
(B)VARIABLE RATE INSTRUMENTS--CONTINUED
- ---------------------------------------------------------------------------------
BANKING--CONTINUED
-------------------------------------------------------------
$ 3,775,000 Wexner Heritage House, (Huntington National Bank, Columbus,
OH LOC), 5.885%, 8/3/1995 $ 3,775,000
-------------------------------------------------------------
2,445,000 YMCA of Central, OH, (Huntington National Bank, Columbus, OH
LOC), 5.890%, 8/3/1995 2,445,000
------------------------------------------------------------- --------------
Total 385,774,985
------------------------------------------------------------- --------------
ELECTRICAL EQUIPMENT--1.2%
-------------------------------------------------------------
8,840,838 GS Funding Corp., (Guaranteed by General Electric Co.),
5.869%, 7/31/1995 8,840,838
-------------------------------------------------------------
6,000,000 Lauda Air, Luftfahrt, (Guaranteed by General Electric Co.),
5.881%, 8/1/1995 6,000,000
-------------------------------------------------------------
19,918,165 Northwest Airlines, Inc., (Guaranteed by General Electric
Co.), 5.897%, 7/31/1995 19,918,165
------------------------------------------------------------- --------------
Total 34,759,003
------------------------------------------------------------- --------------
FINANCE-COMMERCIAL--1.2%
-------------------------------------------------------------
36,000,000 Money Market Auto Loan Trust, (Guaranteed by Cap MAC),
6.015%, 8/15/1995 36,000,000
------------------------------------------------------------- --------------
FINANCE-RETAIL--1.1%
-------------------------------------------------------------
31,825,493 Carco Auto Loan Master Trust, Series 1993-2, Class A1,
5.785%, 8/15/1995 31,825,493
------------------------------------------------------------- --------------
INSURANCE--0.8%
-------------------------------------------------------------
25,000,000 (c) Peoples Security Life Insurance, 6.300%, 8/1/1995 25,000,000
------------------------------------------------------------- --------------
MUNICIPAL--0.9%
-------------------------------------------------------------
26,700,000 (c) Columbus, OH, 6.135%, 8/3/1995 26,700,000
------------------------------------------------------------- --------------
TOTAL VARIABLE RATE INSTRUMENTS 540,059,481
------------------------------------------------------------- --------------
(D)REPURCHASE AGREEMENTS--15.6%
- ---------------------------------------------------------------------------------
700,000 Bear, Stearns & Co., Inc., 5.81%, dated 7/31/1995, due
8/1/1995 700,000
-------------------------------------------------------------
135,748,000 First Chicago Capital Markets, Inc., 5.82%, dated 7/31/1995,
due 8/1/1995 135,748,000
-------------------------------------------------------------
147,451,000 Fuji Securities, Inc., 5.82%, dated 7/31/1995, due 8/1/1995 147,451,000
-------------------------------------------------------------
</TABLE>
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------- --------------
<C> <C> <S> <C>
(D)REPURCHASE AGREEMENTS--CONTINUED
- ---------------------------------------------------------------------------------
$ 10,516,000 PaineWebber, Inc., 5.85%, dated 7/31/1995, due 8/1/1995 $ 10,516,000
-------------------------------------------------------------
211,000 State Street Bank and Trust Co., 5.82%, dated 7/31/1995, due
8/1/1995 211,000
-------------------------------------------------------------
167,090,000 UBS Securities, Inc., 5.80%, dated 7/31/1995, due 8/1/1995 167,090,000
------------------------------------------------------------- --------------
TOTAL REPURCHASE AGREEMENTS 461,716,000
------------------------------------------------------------- --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (E) $2,962,899,308
------------------------------------------------------------- --------------
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
(b) Current rate and next reset date shown.
(c) Restricted Securities--Investment in securities not registered under the
Securities Act of 1933. At the end of the period, these amounted to 6.0% of
net assets.
(d) Repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated funds.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($2,958,751,318) at July 31, 1995.
The following acronyms are used throughout this portfolio:
<TABLE>
<S> <C>
LOC -- Letter of Credit
LP -- Limited Partnership
PLC -- Public Limited Company
TRB -- Taxable Revenue Bond
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------
Investments in repurchase agreements $ 461,716,000
- --------------------------------------------------------------
Investments in securities 2,501,183,308
- -------------------------------------------------------------- --------------
Total investments, at amortized cost and value $2,962,899,308
- -------------------------------------------------------------------------------
Income receivable 5,325,668
- -------------------------------------------------------------------------------
Receivable for shares sold 8,182,417
- ------------------------------------------------------------------------------- --------------
Total assets 2,976,407,393
- -------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------
Payable for shares redeemed 3,166,500
- --------------------------------------------------------------
Income distribution payable 10,170,581
- --------------------------------------------------------------
Accrued expenses 707,730
- --------------------------------------------------------------
Payable to Bank 3,611,264
- -------------------------------------------------------------- --------------
Total liabilities 17,656,075
- ------------------------------------------------------------------------------- --------------
NET ASSETS for 2,958,751,318 shares outstanding $2,958,751,318
- ------------------------------------------------------------------------------- --------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- -------------------------------------------------------------------------------
Institutional Shares:
($2,457,797,173/2,457,797,173 shares outstanding) $1.00
- ------------------------------------------------------------------------------- --------------
Institutional Service Shares:
($500,954,145/500,954,145 shares outstanding) $1.00
- ------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME OBLIGATIONS FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------
Interest $127,412,842
- ----------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------
Investment advisory fee $ 4,370,903
- -------------------------------------------------------------------
Administrative personnel and services fee 1,654,387
- -------------------------------------------------------------------
Custodian fees 244,453
- -------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 67,443
- -------------------------------------------------------------------
Directors'/Trustees' fees 8,283
- -------------------------------------------------------------------
Auditing fees 12,951
- -------------------------------------------------------------------
Legal fees 28,075
- -------------------------------------------------------------------
Portfolio accounting fees 190,089
- -------------------------------------------------------------------
Shareholder services fee--Institutional Shares 4,908,345
- -------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 554,723
- -------------------------------------------------------------------
Share registration costs 503,411
- -------------------------------------------------------------------
Printing and postage 25,638
- -------------------------------------------------------------------
Insurance premiums 49,287
- -------------------------------------------------------------------
Taxes 38,556
- -------------------------------------------------------------------
Miscellaneous 27,683
- ------------------------------------------------------------------- -----------
Total expenses 12,684,227
- -------------------------------------------------------------------
Deduct--
- ------------------------------------------------------
Waiver of investment advisory fee $2,828,160
- ------------------------------------------------------
Waiver of shareholder services fee--Institutional
Shares 4,908,345 7,736,505
- ------------------------------------------------------ ---------- -----------
Net expenses 4,947,722
- ---------------------------------------------------------------------------------- ------------
Net investment income $122,465,120
- ---------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME OBLIGATIONS FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
-----------------------------------
1995 1994
---------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------
Net investment income $ 122,465,120 $ 41,204,591
- ----------------------------------------------------------- ---------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------
Distributions from net investment income:
- -----------------------------------------------------------
Institutional Shares (109,911,005) (41,183,125)
- -----------------------------------------------------------
Institutional Service Shares (12,554,115) (21,466)
- ----------------------------------------------------------- ---------------- ---------------
Change in net assets resulting from distributions to
shareholders (122,465,120) (41,204,591)
- ----------------------------------------------------------- ---------------- ---------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------
Proceeds from sale of Shares 28,128,464,929 8,598,402,134
- -----------------------------------------------------------
Net asset value of Shares issued to shareholders in payment
of distributions declared 34,127,138 6,605,494
- -----------------------------------------------------------
Cost of Shares redeemed (26,464,207,220) (8,442,800,343)
- ----------------------------------------------------------- ---------------- ---------------
Change in net assets resulting from share transactions 1,698,384,847 162,207,285
- ----------------------------------------------------------- ---------------- ---------------
Change in net assets 1,698,384,847 162,207,285
- ----------------------------------------------------------- ---------------- ---------------
NET ASSETS:
- -----------------------------------------------------------
Beginning of period 1,260,366,471 1,098,159,186
- ----------------------------------------------------------- ---------------- ---------------
End of period $ 2,958,751,318 $ 1,260,366,471
- ----------------------------------------------------------- ---------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
1. ORGANIZATION
Money Market Obligations 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 six, diversified portfolios. The
financial statements presented herein present only those of Prime Obligations
Fund (the "Fund"). The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held. The
Fund offers two classes of shares; Institutional Shares and Institutional
Service Shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Fund could
receive less than the repurchase price on the sale of collateral
securities.
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.
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
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.
OTHER--Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At July 31, 1995, capital paid-in aggregated $2,958,751,318.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------------------
1995 1994
--------------- --------------
<S> <C> <C>
INSTITUTIONAL SHARES
- -----------------------------------------------------------
Shares Sold 23,850,176,668 8,582,784,664
- -----------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 27,352,248 6,585,754
- -----------------------------------------------------------
Shares redeemed (22,670,711,004) (8,436,550,343)
- ----------------------------------------------------------- --------------- --------------
Net change resulting from Institutional share
transactions 1,206,817,912 152,820,075
- ----------------------------------------------------------- --------------- --------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------------------
1995 1994*
--------------- --------------
<S> <C> <C>
INSTITUTIONAL SERVICE SHARES
- -----------------------------------------------------------
Shares Sold 4,278,288,261 15,617,470
- -----------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 6,774,890 19,740
- -----------------------------------------------------------
Shares redeemed (3,793,496,216) (6,250,000)
- ----------------------------------------------------------- --------------- --------------
Net change resulting from Institutional Service share
transactions 491,566,935 9,387,210
- ----------------------------------------------------------- --------------- --------------
Net change resulting from share transactions 1,698,384,847 162,207,285
- ----------------------------------------------------------- --------------- --------------
</TABLE>
* Reflects operations for the period from July 5, 1994, (date of initial public
offering) to July 31, 1994.
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .20 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive a portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") under the
Administrative Services Agreement provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain shareholder accounts. FSS may
voluntarily choose to waive a portion of this fee. FSS can modify or terminate
this voluntary waiver at any time at its sole discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ")serves as transfer and dividend disbursing agent for
the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
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 Trustees. The Fund will not incur any registration
costs upon such resales. Restricted securities are valued at amortized cost
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
in accordance with Rule 2a-7 under the Investment Company Act of 1940.
Additional information on each restricted security held at July 31, 1995 is as
follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
---------------------------------------------------- ----------- ------------
<S> <C> <C>
SMM Trust Series 1995-I 01/06/95 $100,970,760
SMM Trust Series 1994-B 05/31/95 20,144,056
Peoples Security Life Insurance, 6.300%, 8/1/1995 07/06/95 25,000,000
Columbus, OH, 6.135%, 8/3/1995 01/30/95 26,700,000
</TABLE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
MONEY MARKET OBLIGATIONS TRUST
(Prime Obligations Fund):
We have audited the accompanying statement of assets and liabilities of Prime
Obligations Fund (an investment portfolio of Money Market Obligations Trust, a
Massachusetts business trust), including the schedule of portfolio investments,
as of July 31, 1995, the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for the periods presented. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of July
31, 1995, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Prime
Obligations Fund (an investment portfolio of Money Market Obligations Trust) as
of July 31, 1995, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for the periods presented, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
September 8, 1995
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Prime Obligations Fund
Institutional Service Shares Federated Investors Tower
Pittsburgh, PA 15222-3779
- -----------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, PA 15222-3779
- -----------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, PA 15222-3779
- -----------------------------------------------------------------------------------------------
Custodian
State Street Bank and Trust Company P.O. Box 8600
Boston, MA 02266-8600
- -----------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, MA 02266-8600
- -----------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, PA 15222
- -----------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRIME OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET
OBLIGATIONS TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
A Diversified Portfolio of Money Market
Obligations Trust, an Open-End Management
Investment Company
Prospectus dated September 30, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 60934N708
9110204A-SS (9/95)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-FREE OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
The Institutional Shares of Tax-Free Obligations Fund (the "Fund") offered by
this prospectus represent interests in a diversified portfolio of Money Market
Obligations Trust (the "Trust"), an open-end management investment company (a
mutual fund). The Fund invests in municipal securities to provide dividend
income exempt from federal regular income tax consistent with stability of
principal.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR 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 THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE FUND
ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN BE
NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Combined Statement of Additional Information dated
September 30, 1995, with the Securities and Exchange Commission. The information
contained in the Combined Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Combined Statement
of Additional Information, which is in paper form only, or a paper copy of this
prospectus, if you have received your prospectus electronically, free of charge
by calling 1-800-235-4669. To obtain other information, or make inquiries about
the Fund, contact the Fund at the address listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated September 30, 1995
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS--
INSTITUTIONAL SHARES 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Municipal Securities 6
Investment Risks 6
Investment Limitations 7
Regulatory Compliance 7
TRUST INFORMATION 7
- ------------------------------------------------------
Management of the Trust 7
Distribution of Shares 8
Administration of the Fund 9
NET ASSET VALUE 9
- ------------------------------------------------------
INVESTING IN THE FUND 10
- ------------------------------------------------------
Share Purchases 10
Minimum Investment Required 10
Subaccounting Services 10
Certificates and Confirmations 11
Dividends 11
Capital Gains 11
REDEEMING SHARES 11
- ------------------------------------------------------
By Mail 11
Telephone Redemption 12
Accounts with Low Balances 12
SHAREHOLDER INFORMATION 13
- ------------------------------------------------------
Voting Rights 13
Massachusetts Partnership Law 13
TAX INFORMATION 13
- ------------------------------------------------------
Federal Income Tax 13
Pennsylvania Corporate and
Personal Property Taxes 14
OTHER CLASSES OF SHARES 14
- ------------------------------------------------------
PERFORMANCE INFORMATION 15
- ------------------------------------------------------
FINANCIAL STATEMENTS 16
- ------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS 45
- ------------------------------------------------------
ADDRESSES 46
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)........................................ None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)........................................ None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable)...................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)........... None
Exchange Fee................................................................. None
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)(1)............................................. 0.06%
12b-1 Fee.................................................................... None
Total Other Expenses......................................................... 0.14%
Shareholder Services Fee (after waiver)(2)................................. 0.00%
Total Operating Expenses(3)............................................. 0.20%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary waiver
at any time at its sole discretion. The maximum management fee is 0.20%.
(2) The maximum shareholder services fee is 0.25%.
(3) The total operating expenses would have been 0.59% absent the voluntary
waiver of a portion of the management fee and the shareholder services fee.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "INVESTING IN THE FUND" AND "TRUST INFORMATION". WIRE-TRANSFERRED
REDEMPTIONS OF LESS THAN $5,000 MAY BE SUBJECT TO ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and (2)
redemption at the end of each time period........ $ 2 $ 6 $ 11 $ 26
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
TAX-FREE OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Independent Public Accountants on page 45.
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
------------------------------------------------------------------
1995 1994 1993 1992 1991 1990(A)
------ ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------
Net investment income 0.04 0.02 0.03 0.04 0.05 0.04
- --------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------
Distributions from net investment
income (0.04) (0.02) (0.03) (0.04) (0.05) (0.04)
- -------------------------------------- ------ ------ ------ ------ ------ -------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------- ------ ------ ------ ------ ------ -------
TOTAL RETURN (B) 3.64% 2.45% 2.54% 3.73% 5.13% 3.70%
- --------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------
Expenses 0.20% 0.20% 0.20% 0.20% 0.20% 0.20%(c)
- --------------------------------------
Net investment income 3.62% 2.41% 2.49% 3.58% 4.93% 5.75%(c)
- --------------------------------------
Expense waiver/reimbursement (d) 0.39% 0.15% 0.14% 0.17% 0.26% 0.21%(c)
- --------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------
Net assets, end of period (000
omitted) $1,295,458 $789,755 $454,119 $308,855 $165,669 $145,552
- --------------------------------------
</TABLE>
(a) Reflects operations for the period from December 12, 1989 (date of initial
public investment) to July 31, 1990.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated October 3, 1988. The Declaration of Trust permits the Trust to
offer separate series of shares representing interests in separate portfolios of
securities. The shares in any one portfolio may be offered in separate classes.
With respect to the Fund, as of the date of this prospectus, the Trustees have
established two classes of shares known as Institutional Shares and
Institutional Service Shares. This prospectus relates only to Institutional
Shares of the Fund, which are designed primarily for financial institutions as a
convenient means of accumulating an interest in a professionally managed,
diversified portfolio investing primarily in short-term municipal securities.
The Fund may not be a suitable investment for retirement plans since it invests
in municipal securities. A minimum initial investment of $25,000 is required.
Eligibility for investment in the Fund is contingent upon an investor
accumulating and maintaining a minimum aggregate investment of $200,000,000 in
Federated funds within a twelve-month period. For this purpose, 1) an investor
is defined as a financial institution or its collective customers, including
affiliate financial institutions and their collective customers, or other
institutions that are determined to qualify by Federated Securities Corp., and
2) Federated funds are those mutual funds which are distributed by Federated
Securities Corp., or are advised by or administered by investment advisers or
administrators affiliated with Federated Securities Corp. ("Federated Funds").
An investor's minimum investment will be calculated by combining all accounts
the investor maintains with the Federated Funds, which includes the Fund.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide dividend income exempt from
federal regular income tax consistent with stability of principal. This
investment objective cannot be changed without shareholder approval. While there
is no assurance that the Fund will achieve its investment objective, it
endeavors to do so by following the investment policies described in this
prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing in a portfolio of
municipal securities (as defined below) maturing in 13 months or less. As a
matter of investment policy, which cannot be changed without shareholder
approval, at least 80% of the Fund's annual interest income will be exempt from
federal regular income tax. (Federal regular income tax does not include the
federal individual alternative minimum tax or the federal alternative minimum
tax for corporations.) The average maturity of the securities in the Fund's
portfolio, computed on a dollar-weighted basis, will be 90 days or less. Unless
indicated otherwise, the investment policies may be changed by the Trustees
without
shareholder approval. Shareholders will be notified before any material change
in these policies becomes effective.
ACCEPTABLE INVESTMENTS. The Fund invests primarily in debt obligations issued by
or on behalf of states, territories, and possessions of the United States,
including the District of Columbia, and any political subdivision or financing
authority of any of these, the income from which is, in the opinion of qualified
legal counsel, exempt from federal regular income tax ("Municipal Securities").
Examples of Municipal Securities include, but are not limited to:
- tax and revenue anticipation notes ("TRANs") issued to finance working
capital needs in anticipation of receiving taxes or other revenues;
- bond anticipation notes ("BANs") that are intended to be refinanced
through a later issuance of longer-term bonds;
- municipal commercial paper and other short-term notes;
- variable rate demand notes;
- municipal bonds (including bonds having serial maturities and
pre-refunded bonds) and leases; and
- participation, trust, and partnership interests in any of the foregoing
obligations.
VARIABLE RATE DEMAND NOTES. Variable rate demand notes are long-term debt
instruments that have variable or floating interest rates and provide the
Fund with the right to tender the security for repurchase at its stated
principal amount plus accrued interest. Such securities typically bear
interest at a rate that is intended to cause the securities to trade at
par. The interest rate may float or be adjusted at regular intervals
(ranging from daily to annually), and is normally based on a published
interest rate or interest rate index. Most variable rate demand notes allow
the Fund to demand the repurchase of the security on not more than seven
days prior notice. Other notes only permit the Fund to tender the security
at the time of each interest rate adjustment or at other fixed intervals.
See "Demand Features." The Fund treats variable rate demand notes as
maturing on the later of the date of the next interest rate adjustment or
the date on which the Fund may next tender the security for repurchase.
PARTICIPATION INTERESTS. The Fund may purchase interests in Municipal
Securities from financial institutions such as commercial and investment
banks, savings and loan associations, and insurance companies. These
interests may take the form of participations, beneficial interests in a
trust, partnership interests or any other form of indirect ownership that
allows the Fund to treat the income from the investment as exempt from
federal income tax. The Fund invests in these participation interests in
order to obtain credit enhancement or demand features that would not be
available through direct ownership of the underlying Municipal Securities.
MUNICIPAL LEASES. Municipal leases are obligations issued by state and
local governments or authorities to finance the acquisition of equipment
and facilities. They may take the form of a lease, an installment purchase
contract, a conditional sales contract, or a participation interest in any
of the above.
RATINGS. The securities in which the Fund invests must be rated in the highest
short-term rating category by one or more nationally recognized statistical
rating organizations ("NRSROs") or be of comparable quality to securities having
such ratings. An NRSRO's highest rating category is deter-
mined without regard for sub-categories and gradations. For example, securities
rated SP-1+ or SP-1 by Standard & Poor's Ratings Group ("S&P"), MIG-1 by Moody's
Investors Service, Inc. ("Moody's"), or FIN-1+ or FIN-1 by Fitch Investors
Service, Inc. ("Fitch") are all considered rated in the highest short-term
rating category. The Fund will follow applicable regulations in determining
whether a security rated by more than one NRSRO can be treated as being in the
highest short-term rating category; currently, such securities must be rated by
two NRSROs in their highest rating category. See "Regulatory Compliance."
Further, the Fund has the ability but no present intention of investing in:
securities that are rated MIG-2 or VMIG-2 by Moody's, SP-2 by S&P, FIN-2 by
Fitch; tax-exempt commercial paper that is rated P-2 by Moody's, A-2 by S&P, or
F-2 by Fitch; and securities that are not rated but are deemed to be of
comparable quality. Shareholders will be notified should the Fund decide to
invest in these securities.
CREDIT ENHANCEMENT. Certain of the Fund's acceptable investments may be credit
enhanced by a guaranty, letter of credit, or insurance. The Fund typically
evaluates the credit quality and ratings of credit-enhanced securities based
upon the financial condition and ratings of the party providing the credit
enhancement (the "credit enhancer"), rather than the issuer. However,
credit-enhanced securities will not be treated as having been issued by the
credit enhancer for diversification purposes, unless the Fund has invested more
than 10% of its assets in securities issued, guaranteed or otherwise credit
enhanced by the credit enhancer, in which case the securities will be treated as
having been issued by both the issuer and the credit enhancer. The bankruptcy,
receivership, or default of the credit enhancer will adversely affect the
quality and marketability of the underlying security.
DEMAND FEATURES. The Fund may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount (usually with accrued interest) within a fixed period (usually
seven days) following a demand by the Fund. The demand feature may be issued by
the issuer of the underlying securities, a dealer in the securities, or by
another third party, and may not be transferred separately from the underlying
security. The Fund uses these arrangements to provide the Fund with liquidity
and not to protect against changes in the market value of the underlying
securities. The bankruptcy, receivership, or default by the issuer of the demand
feature, or a default on the underlying security or other event that terminates
the demand feature before its exercise, will adversely affect the liquidity of
the underlying security. Demand features that are exercisable even after a
payment default on the underlying security may be treated as a form of credit
enhancement.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Fund to miss a price or yield considered to be advantageous. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices.
Accordingly, the Fund may pay more or less than the market value of the
securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the adviser deems it
appropriate to do so. In addition, the Fund may enter into transactions to sell
its purchase commitments to third parties at
current market values and simultaneously acquire other commitments to purchase
similar securities at later dates. The Fund may realize short-term profits or
losses upon the sale of such commitments.
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest in restricted
securities. Restricted securities are any securities in which the Fund may
invest pursuant to its investment objective and policies but which are subject
to restrictions on resale under federal securities laws. Under criteria
established by the Trustees, certain restricted securities are determined to be
liquid. To the extent that restricted securities are not determined to be
liquid, the Fund will limit their purchase, together with other illiquid
securities, to 10% of its total assets.
TEMPORARY INVESTMENTS. From time to time, when the investment adviser determines
that market conditions call for a temporary defensive posture, the Fund may
invest in tax-exempt or taxable securities such as: obligations issued by or on
behalf of municipal or corporate issuers having the same quality characteristics
as described above; obligations issued or guaranteed by the U.S. government, its
agencies, or instrumentalities; instruments issued by a U.S. branch of a
domestic bank or other deposit institution having capital, surplus, and
undivided profits in excess of $100,000,000 at the time of investment; and
repurchase agreements (arrangements in which the organization selling the Fund a
temporary investment agrees at the time of sale to repurchase it at a mutually
agreed upon time and price).
Although the Fund is permitted to make taxable, temporary investments, there is
no current intention to do so. However, the interest from certain Municipal
Securities is subject to the federal alternative minimum tax.
MUNICIPAL SECURITIES
Municipal Securities are generally issued to finance public works, such as
airports, bridges, highways, housing, hospitals, mass transportation projects,
schools, streets, and water and sewer works. They are also issued to repay
outstanding obligations, to raise funds for general operating expenses, and to
make loans to other public institutions and facilities.
Municipal Securities include industrial development bonds issued by or on behalf
of public authorities to provide financing aid to acquire sites or construct and
equip facilities for privately or publicly owned corporations. The availability
of this financing encourages these corporations to locate within the sponsoring
communities and thereby increases local employment.
The two principal classifications of Municipal Securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. Interest on and principal of revenue bonds, however, are
payable only from the revenue generated by the facility financed by the bond or
other specified sources of revenue. Revenue bonds do not represent a pledge of
credit or create any debt of or charge against the general revenues of a
municipality or public authority. Industrial development bonds are typically
classified as revenue bonds.
INVESTMENT RISKS
Yields on Municipal Securities depend on a variety of factors, including: the
general conditions of the short-term municipal note market and of the municipal
bond market; the size of the particular offering;
the maturity of the obligations; and the rating of the issue. The ability of the
Fund to achieve its investment objective also depends on the continuing ability
of the issuers of Municipal Securities and participation interests, or the
credit enhancers of either, to meet their obligations for the payment of
interest and principal when due. In addition, from time to time, the supply of
Municipal Securities acceptable for purchase by the Fund could become limited.
The Fund may invest in Municipal Securities which are repayable out of revenue
streams generated from economically related projects or facilities and/or whose
issuers are located in the same state. Sizable investments in these Municipal
Securities could involve an increased risk to the Fund should any of these
related projects or facilities experience financial difficulties.
Obligations of issuers of Municipal Securities are subject to the provisions of
bankruptcy, insolvency, and other laws affecting the rights and remedies of
creditors. In addition, the obligations of such issuers may become subject to
laws enacted in the future by Congress, state legislators, or referenda
extending the time for payment of principal and/or interest, or imposing other
constraints upon enforcement of such obligations or upon the ability of states
or municipalities to levy taxes. There is also the possibility that, as a result
of litigation or other conditions, the power or ability of any issuer to pay,
when due, the principal of and interest on its municipal securities may be
materially affected.
INVESTMENT LIMITATIONS
The Fund will not borrow money or pledge securities except, under certain
circumstances, the Fund may borrow up to one-third of the value of its total
assets and pledge assets to secure such borrowings. This investment limitation
cannot be changed without shareholder approval.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Combined Statement of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940, as amended. In particular,
the Fund will comply with the various requirements of Rule 2a-7, which regulates
money market mutual funds. The Fund will determine the effective maturity of its
investments, as well as its ability to consider a security as having received
the requisite short-term ratings by NRSROs, according to Rule 2a-7. The Fund may
change these operational policies to reflect changes in the laws and regulations
without the approval of its shareholders.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees are
responsible for managing the Fund's business affairs and for exercising all the
Trust's powers except those reserved for the shareholders. An Executive
Committee of the Board of Trustees handles the Board's responsibilities between
meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the Trustees.
The adviser continually conducts investment research and supervision for the
Fund and is responsible for the purchase and sale of portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment advisory fee equal
to .20 of 1% of the Fund's average daily net assets. The adviser has
undertaken to reimburse the Fund up to the amount of the advisory fee for
operating expenses in excess of limitations established by certain states.
The adviser also may voluntarily choose to waive a portion of its fee or
reimburse other expenses of the Fund, but reserves the right to terminate
such waiver or reimbursement at any time at its sole discretion.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. With over $72 billion invested across
more than 260 funds under management and/or administration by its
subsidiaries, as of December 31, 1994, Federated Investors is one of the
largest mutual fund investment managers in the United States. With more
than 1,750 employees, Federated continues to be led by the management who
founded the company in 1955. Federated funds are presently at work in and
through 4,000 financial institutions nationwide. More than 100,000
investment professionals have selected Federated funds for their clients.
Both the Trust and the adviser have adopted strict codes of ethics governing the
conduct of all employees who manage the Fund and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Fund's
shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Trustees, and could
result in severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for Institutional Shares
of the Fund. It is a Pennsylvania corporation organized on November 14, 1969,
and is the principal distributor for a number of investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors.
SHAREHOLDER SERVICES. The Fund has entered into a Shareholder Services Agreement
with Federated Shareholder Services, a subsidiary of Federated Investors, under
which the Fund may make payments up to .25 of 1% of the average daily net asset
value of the Institutional Shares, computed at an annual
rate, to obtain personal services for shareholders and provide maintenance of
shareholder accounts ("shareholder services"). From time to time and for such
periods as deemed appropriate, the amount stated above may be reduced
voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services will
either perform shareholder services directly or will select financial
institutions fees to perform shareholder services based upon shares owned by
their clients or customers. Financial institutions will receive fees based upon
shares owned by their clients or customers. The schedules of such fees and the
basis upon which such fees will be paid will be determined from time to time by
the Fund and Federated Shareholder Services.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate as specified
below:
<TABLE>
<CAPTION>
MAXIMUM FEE AVERAGE AGGREGATE DAILY NET ASSETS
- --------------------- -----------------------------------
<S> <C>
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares. Average
aggregate daily net assets include those of all mutual funds advised by
affiliates of Federated Investors. Federated Administrative Services may choose
voluntarily to waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, MA, is custodian for the
securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Boston, MA, is transfer agent for the shares of, and dividend disbursing agent
for, the Fund. Federated Services Company is a subsidiary of Federated
Investors.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the Fund
are Arthur Andersen LLP, Pittsburgh, PA.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund attempts to stabilize the net asset value of shares at $1.00 by valuing
the portfolio securities using the amortized cost method. The net asset value
per share is determined by subtracting liabilities attributable to shares from
the value of Fund assets attributable to shares, and dividing the remainder by
the number of shares outstanding. The Fund cannot guarantee that its net asset
value will always remain at $1.00 per share.
The net asset value is determined at 12:00 noon, 3:00 p.m. (Eastern time), and
as of the close of trading (normally 4:00 p.m., Eastern time) on the New York
Stock Exchange, Monday through Friday, except on New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares may
be purchased either by wire or mail. The Fund reserves the right to reject any
purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
BY WIRE. To purchase by Federal Reserve wire, call the Fund before 3:00 p.m.
(Eastern time) to place an order. The order is considered received immediately.
Payment by federal funds must be received before 3:00 p.m. (Eastern time) that
day. Federal funds should be wired as follows: Federated Services Company, c/o
State Street Bank and Trust Company, Boston, MA; Attention: EDGEWIRE; For Credit
to: Tax-Free Obligations Fund -- Institutional Shares; Fund Number (this number
can be found on the account statement or by contacting the Fund); Group Number
or Order Number; Nominee or Institution Name; and ABA Number 011000028.
BY MAIL. To purchase by mail, send a check made payable to Tax-Free Obligations
Fund -- Institutional Shares to: Federated Services Company, Tax-Free
Obligations Fund, P.O. Box 8600, Boston, MA 02266-8600. Orders by mail are
considered received when payment by check is converted into federal funds. This
is normally the next business day after the check is received.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $25,000. Eligibility for investment in the
Fund is contingent upon an investor accumulating and maintaining a minimum
aggregate investment of $200,000,000 in Federated Funds within a twelve-month
period.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent charges a fee based on the level of subaccounting services
rendered. Financial institutions may charge or pass through subaccounting fees
as part of or in addition to normal trust or agency account fees. They may also
charge fees for other services provided which may be related to the ownership of
Fund shares. This prospectus should, therefore, be read together with any
agreement between the customer and the financial institution with regard to the
services provided, the fees charged for those services, and any restrictions and
limitations imposed.
State securities laws may require certain financial institutions such as
depository institutions to register as dealers.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases and
redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional shares of the Fund unless cash
payments are requested by writing to the Fund. Shares purchased by wire before
3:00 p.m. (Eastern time) begin earning dividends that day. Shares purchased by
check begin earning dividends the day after the check is converted into federal
funds.
CAPITAL GAINS
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund will distribute in cash or additional shares any realized
net long-term capital gains at least once every 12 months.
REDEEMING SHARES
- --------------------------------------------------------------------------------
Shares are redeemed at their net asset value next determined after Federated
Services Company receives the redemption request. Redemptions will be made on
days on which the Fund computes its net asset value. Redemption requests must be
received in proper form and can be made as described below.
BY MAIL
Shares may be redeemed by sending a written request to: Tax-Free Obligations
Fund, Federated Services Company, P.O. Box 8600, Boston, MA 02266-8600. The
written request should state: Tax-Free Obligations Fund -- Institutional Shares;
shareholder's name; the account number; and the share or dollar amount
requested. Sign the request exactly as the shares are registered. Shareholders
should call the Fund for assistance in redeeming by mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or overnight insured mail with the written request
to Federated Services Company, 500 Victory Road -- 2nd Floor, North Quincy, MA
02171.
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Fund, or a redemption payable other than to
the shareholder of record must have their signatures guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and the transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of the
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Fund. Telephone instructions may be
recorded and if reasonable procedures are not followed by the Fund, it may be
liable for losses due to unauthorized or fraudulent telephone instructions. An
authorization form permitting the Fund to accept telephone requests must first
be completed. Authorization forms and information on this service are available
from Federated Securities Corp.
If the redemption request is received before 3:00 p.m. (Eastern time), the
proceeds will be wired the same day to the shareholder's account at a domestic
commercial bank which is a member of the Federal Reserve System, and those
shares redeemed will not be entitled to that day's dividend. A daily dividend
will be paid on shares redeemed if the redemption request is received after 3:00
p.m. (Eastern time). However, the proceeds are not wired until the following
business day.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail", should be considered. If at any time
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000, or the
aggregate investment in Federated Funds falls below the required minimum of
$200,000,000 to be maintained from and after twelve months from account opening,
due to shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights, except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder approval will be
sought only for certain changes in the Trust's or the Fund's operation and for
the election of Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders for this purpose shall be called by the
Trustees upon the written request of shareholders owning at least 10% of the
outstanding shares of the Trust.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by the Fund.
Shareholders are not required to pay the federal regular income tax on any
dividends received from the Fund that represent net interest on tax-exempt
municipal bonds. However, under the Tax Reform Act
of 1986, dividends representing net interest earned on certain "private
activity" bonds issued after August 7, 1986, may be included in calculating the
federal individual alternative minimum tax or the federal alternative minimum
tax for corporations. The Fund may purchase all types of municipal bonds,
including private activity bonds.
The alternative minimum tax applies when it exceeds the regular tax for the
taxable year. Alternative minimum taxable income is equal to the regular taxable
income of the taxpayer increased by certain "tax preference" items not included
in regular taxable income and reduced by only a portion of the deductions
allowed in the calculation of the regular tax.
Dividends of the Fund representing net interest income earned on some temporary
investments and any realized net short-term gains are taxed as ordinary income.
These tax consequences apply whether dividends are received in cash or as
additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston, & Donnelly, counsel to the Trust, Fund
shares may be subject to personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania to the extent that the
portfolio securities in the Fund would be subject to such taxes if owned
directly by residents of those jurisdictions.
OTHER STATE AND LOCAL TAXES. Because interest received by the Fund may not be
exempt from all state and local income taxes, shareholders may be required to
pay state and local taxes on dividends received from the Fund. Shareholders are
urged to consult their own tax advisers regarding the status of their accounts
under state and local tax laws.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
The Fund also offers another class of shares called Institutional Service
Shares. Institutional Service Shares are sold at net asset value primarily to
accounts for which financial institutions act in an agency of fiduciary capacity
and are subject to a minimum initial investment of $25,000.
All classes are subject to certain of the same expenses.
Institutional Service Shares are distributed with no 12b-1 fees but are subject
to shareholder services fees.
Expense differences between classes may affect the performance of each class.
To obtain more information and a prospectus for any other class, investors may
call 1-800-235-4669.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time, the Fund advertises its yield, effective yield, and
tax-equivalent yield for shares. The performance figures will be calculated
separately for each class of shares.
Yield represents the annualized rate of income earned on an investment over a
seven-day period. It is the annualized dividends earned during the period on an
investment shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but when annualized, the income earned by an
investment is assumed to be reinvested daily. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment. The tax-equivalent yield is calculated similarly to the yield, but
is adjusted to reflect the taxable yield that would have to be earned to equal
the tax-exempt yield, assuming a specific tax rate.
Advertisements and sales literature may also refer to total return. Total return
represents the change, over a specified period of time, in the value of an
investment in the shares after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
TAX-FREE OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--100.4%
- ----------------------------------------------------------------------
ALABAMA--2.8%
------------------------------------------------------
$ 9,010,000 Alabama Special Care Facilities Finance Authority
Weekly VRDNs (Providence Hospital)/(Daughters of
Charity GTD) VMIG1 $ 9,010,000
------------------------------------------------------
2,000,000 Birmingham, AL IDA, Revenue Refunding Bonds Weekly
VRDNs (S.P. Hotel Company)/(Amsouth Bank N.A.,
Birmingham LOC) VMIG1 2,000,000
------------------------------------------------------
3,140,000 Birmingham, AL Special Care Facilities Financing
Authority, Capital Improvement Revenue Bonds (Series
1995) Weekly VRDNs (Methodist Home for the Aging,
AL)/(SouthTrust Bank of Alabama, Birmingham LOC) P-1 3,140,000
------------------------------------------------------
2,850,000 Birmingham, AL, GO (Series 1995-A), 5.625% BANs,
1/5/1996 NR(2) 2,852,538
------------------------------------------------------
4,600,000 Birmingham, AL, GO (Series 1992-A) Weekly VRDNs (First
Alabama Bank, Birmingham LOC) A-1+ 4,600,000
------------------------------------------------------
1,000,000 Bon Air, AL IDB Weekly VRDNs (Avondale Mills,
Inc.)/(Trust Company Bank, Atlanta LOC) A-1+ 1,000,000
------------------------------------------------------
3,000,000 Homewood, AL IDA Weekly VRDNs (Mountain Brook Inn
(Homewood AL))/(SouthTrust Bank of Alabama, Birmingham
LOC) P-1 3,000,000
------------------------------------------------------
8,500,000 Huntsville, AL Health Care Authority/Health Care
Facilities (Series 1994-A) Weekly VRDNs (MBIA
INS)/(Amsouth Bank N.A., Birmingham LIQ) A-1 8,500,000
------------------------------------------------------
1,700,000 Huntsville, AL Health Care Authority/Health Care
Facilities, Health Care Facilities Revenue Bonds
(Series 1994-B) Weekly VRDNs (MBIA INS)/(Amsouth Bank
N.A., Birmingham LIQ) A-1 1,700,000
------------------------------------------------------
300,000 Huntsville, AL IDA Weekly VRDNs (Parkway Project
(Huntsville, AL))/(First Alabama Bank, Birmingham LOC) A-1+ 300,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
ALABAMA--CONTINUED
------------------------------------------------------
$ 1,500,000 Marshall County, AL, Special Obligation School
Refunding Warrant (Series 1994) Weekly VRDNs (Marshall
County, AL Board of Education)/
(First Alabama Bank, Birmingham LOC) A-1+ $ 1,500,000
------------------------------------------------------
3,000,000 Mobile, AL IDB, PCR (Series 1993-B) Weekly VRDNs
(Alabama Power Co.) A-1 3,000,000
------------------------------------------------------
995,000 Tuscaloosa County, AL Port Authority (Series 1989-A)
Weekly VRDNs (Capstone Hotel Ltd.)/(SouthTrust Bank of
Alabama, Birmingham LOC) P-1 995,000
------------------------------------------------------
1,630,000 Tuscaloosa, AL IDB, Revenue Refunding Bonds (Series
1994) Weekly VRDNs (Harco, Inc.)/
(Amsouth Bank N.A., Birmingham LOC) P-1 1,630,000
------------------------------------------------------ --------------
Total 43,227,538
------------------------------------------------------ --------------
ARIZONA--1.9%
------------------------------------------------------
15,000,000 Apache County, AZ IDA (Series 1983-A) Weekly
VRDNs (Tucson Electric Power Co.)/(Barclays Bank PLC,
London LOC) A-1+ 15,000,000
------------------------------------------------------
4,000,000 Arizona Health Facilities Authority, Variable Rate
Demand Bond Weekly VRDNs (University Physicians,
Inc.)/
(Bank One, Arizona N.A. LOC) P-1 4,000,000
------------------------------------------------------
4,400,000 Maricopa County, AZ (Series 1994-F) Daily VRDNs
(Arizona Public Service Corp.)/(Bank of America NT and
SA, San Francisco LOC) A-1 4,400,000
------------------------------------------------------
6,000,000 Pima County, AZ IDA, Floating Rate Notes (Series A)
Weekly VRDNs (Tucson Electric Power Co.)/
(Barclays Bank PLC, London LOC) P-1 6,000,000
------------------------------------------------------ --------------
Total 29,400,000
------------------------------------------------------ --------------
ARKANSAS--0.1%
------------------------------------------------------
1,000,000 Sheridan, AR IDA Weekly VRDNs (H.H. Robertson
Co.)/(PNC Bank, N.A. LOC) VMIG1 1,000,000
------------------------------------------------------ --------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
CALIFORNIA--16.6%
------------------------------------------------------
$27,350,000 California School Cash Reserve Program Authority,
(Series 1995-A), 4.75% TRANs (MBIA Insured), 7/3/1996 SP-1+ $ 27,577,341
------------------------------------------------------
35,000,000 California State, Revenue Anticipation Warrants
(Series C), 5.75% RANs (Bank of America NT and SA, San
Francisco, Bank of Nova Scotia, Toronto, Banque
Nationale de Paris, Canadian Imperial Bank of
Commerce, Toronto, Chemical Bank, New York, Citibank,
N.A., Credit Suisse, Zurich, Morgan Guaranty Trust
Co., New York, National Westminster Bank, PLC, London,
Societe Generale North America, Inc., Sumitomo Bank
Ltd., Osaka, Swiss Bank Corp., Westdeusche Landesbank
Girozentrale & Toronto Dominion Bank LOCs) SP-1 35,274,544
------------------------------------------------------
16,100,000 California State, Revenue Anticipation Warrants
(Series C), 5.75% RANs (FGIC INS), 4/25/1996 SP-1 16,355,231
------------------------------------------------------
40,350,000 California Student Loan, Revenue Bonds (Series A)
Weekly VRDNs (Student Loan Marketing
Association LOC) P-1 40,350,000
------------------------------------------------------
10,000,000 Clipper CAL Tax-Exempt Trust, (94-2) Weekly VRDNs
(California State)/(State Street Bank and Trust Co.
LIQ)/(Bank of America NT and SA, San Francisco, Bank
of Nova Scotia, Toronto, Banque Nationale de Paris,
Canadian Imperial Bank of Commerce, Toronto, Chemical
Bank, Citibank N.A. and Credit Suisse LOCs) VMIG1 10,000,000
------------------------------------------------------
12,995,000 Kern County, CA Board of Education, 4.50% TRANs,
6/28/1996 SP-1+ 13,057,372
------------------------------------------------------
10,000,000 Los Angeles County, CA Unified School District, 4.50%
TRANs, 7/3/1996 SP-1+ 10,071,011
------------------------------------------------------
41,000,000 Los Angeles County, CA, 4.50% TRANs (Bank of America
NT and SA, San Francisco, Credit Suisse, Zurich,
Morgan Guaranty Trust Co., New York, Swiss Bank Corp.,
New York, NY, Union Bank of Switzerland, Zurich and
Westdeutsche Landesbank Girozentrale LOCs), 7/1/1996 SP-1 41,266,907
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
CALIFORNIA--CONTINUED
------------------------------------------------------
$23,500,000 Los Angeles, CA Wastewater System, Tender Option
Certificates (Series 1995-H) Weekly VRDNs (MBIA
INS)/(Swiss Bank Corp., New York, NY LIQ) A-1+ $ 23,500,000
------------------------------------------------------
10,000,000 Orange County, CA IDA, (Series 1991-A) Weekly VRDNs
(The Lakes)/(Citibank, N.A. LOC) A-1 10,000,000
------------------------------------------------------
6,000,000 Orange County, CA Local Transportation Authority,
Sales Tax Revenue Notes, 4.00% CP (Industrial Bank of
Japan Ltd., Tokyo LOC), Mandatory Tender 9/13/1995 A-1 6,000,000
------------------------------------------------------
5,000,000 San Francisco, CA Unified School District (Series
1994), 4.75% TRANs, 8/24/1995 SP-1+ 5,001,722
------------------------------------------------------
7,000,000 Temecula Valley Unified School District, CA, 4.50%
TRANs, 7/5/1996 SP-1+ 7,031,142
------------------------------------------------------
10,800,000 Ventura County, CA Community College District, 4.50%
TRANs, 6/28/1996 SP-1+ 10,851,836
------------------------------------------------------ --------------
Total 256,337,106
------------------------------------------------------ --------------
COLORADO--1.8%
------------------------------------------------------
25,000,000 Arapahoe County, CO Improvement Authority, (Series G),
4.45% TOBs (Swiss Bank Corp., New York, NY LOC),
Optional Tender 8/31/1995 SP-1+ 25,000,000
------------------------------------------------------
2,625,000 Denver (City & County), CO, 5.20% TOBs (Blake Street
Compendium)/(Norwest Bank Minnesota, Minneapolis LOC),
Optional Tender 12/15/1995 A-1+ 2,625,000
------------------------------------------------------ --------------
Total 27,625,000
------------------------------------------------------ --------------
CONNECTICUT--2.6%
------------------------------------------------------
39,780,000 Connecticut State Transportation Infrastructure
Authority Weekly VRDNs (Connecticut State)/(Industrial
Bank of Japan Ltd., Tokyo LOC) A-1 39,780,000
------------------------------------------------------ --------------
DELAWARE--0.3%
------------------------------------------------------
5,100,000 Delaware Health Facilities Authority, (Series
1985-BTP-19A) Weekly VRDNs (Medical Center of
Delaware)/
(MBIA INS)/(Bankers Trust Co., New York LIQ) NR(1) 5,100,000
------------------------------------------------------ --------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
FLORIDA--13.7%
------------------------------------------------------
$ 3,000,000 Alachua County, FL Health Facilities Authority, Health
Facility Revenue Bonds (Series 1991) Weekly VRDNs
(North Florida Retirement Village)/(Kredietbank N.V.,
Brussels LOC) A-1 $ 3,000,000
------------------------------------------------------
3,000,000 Broward County, FL Health Facility Authority, Revenue
Bonds Weekly VRDNs (John Knox Village of Florida)/
(First Union National Bank, Charlotte, N.C. LOC) P-1 3,000,000
------------------------------------------------------
4,470,000 Dade County, FL IDA Weekly VRDNs (Futernick
Associates, Inc.)/(First Union National Bank,
Charlotte, N.C. LOC) P-1 4,470,000
------------------------------------------------------
1,200,000 Dade County, FL IDA, Industrial Development Revenue
Refunding Bonds Weekly VRDNs (Continental Farms,
Inc.)/(Nationsbank of North Carolina N.A. LOC) P-1 1,200,000
------------------------------------------------------
2,000,000 Dade County, FL Water & Sewer System Weekly VRDNs
(FGIC INS)/(Industrial Bank of Japan Ltd., Tokyo LIQ) A-1 2,000,000
------------------------------------------------------
12,490,000 Florida HFA Weekly VRDNs (Cornerstone)/
(PNC Bank, N.A. LOC) A-1 12,490,000
------------------------------------------------------
1,400,000 Florida HFA, Multi-Family Housing Revenue Refunding
Bonds (Series 1985-D) Weekly VRDNs (Park Colony
Project, FL)/(Mellon Bank NA, Pittsburgh LOC) A-1 1,400,000
------------------------------------------------------
3,285,000 Florida State Board of Education Administration,
(CR49)/(Series 1989-A), 4.00% TOBs (Citibank, N.A.
LIQ), Optional Tender 12/1/1995 NR(2) 3,285,000
------------------------------------------------------
4,235,000 Florida State Board of Education Administration,
(CR49D), 4.00% TOBs (Citibank, N.A. LIQ),
Optional Tender 12/1/1995 NR(2) 4,235,000
------------------------------------------------------
1,210,000 Florida State Board of Education Administration,
(CR55), (Series 1989-A), 4.00% TOBs (Citibank, N.A.
LIQ), Optional Tender 12/1/1995 NR(2) 1,210,000
------------------------------------------------------
17,975,000 Hillsborough County, FL IDA, PCR Refunding Bonds
(Series 1994) Weekly VRDNs (Tampa Electric
Company)/(MBIA INS) NR(2) 17,975,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
FLORIDA--CONTINUED
------------------------------------------------------
$22,000,000 Jacksonville Electric Authority, FL, Tender Option
Certificates (Series 1995-C) Weekly VRDNs (Bayerische
Hypotheken-Und Wechsel-Bank Ag LOC) A-1+ $ 22,000,000
------------------------------------------------------
9,200,000 Jacksonville, FL PCR, (Series 1994), 4.10% CP (Florida
Power & Light Co.), Mandatory Tender 12/14/1995 VMIG1 9,200,000
------------------------------------------------------
6,100,000 Jacksonville, FL, Hospital Revenue Bonds (Series 1989)
Weekly VRDNs (Baptist Medical Center, AL)/
(First Union National Bank, Charlotte, N.C. LOC) VMIG1 6,100,000
------------------------------------------------------
4,200,000 Key West, FL Community Redevelopment Authority Weekly
VRDNs (Pier House Joint Venture)/
(PNC Bank, N.A. LOC) P-1 4,200,000
------------------------------------------------------
4,000,000 Lake Shore, FL Hospital Authority, Health Facilities
Revenue Bonds (Series 1991) Weekly VRDNs (Lake Shore
Hospital)/(Kredietbank N.V., Brussels LOC) P-1 4,000,000
------------------------------------------------------
2,925,000 Lee County, FL IDA, Health Care Facilities Revenue
Bonds Weekly VRDNs (Hope Hospice Project)/
(Sun Bank N.A., Orlando LOC) VMIG1 2,925,000
------------------------------------------------------
5,000,000 Lee County, FL, (PA-104) Weekly VRDNs (MBIA
INS)/(Merrill Lynch Capital Services, Inc. LIQ) VMIG1 5,000,000
------------------------------------------------------
5,410,000 Manatee County, FL HFA Weekly VRDNs (Carriage
Club)/(Mellon Bank N.A., Pittsburgh LOC) VMIG1 5,410,000
------------------------------------------------------
1,900,000 Manatee County, FL HFA, Multi-Family Mortgage Revenue
Refunding Bonds (Series 1989-A) Weekly VRDNs
(Hampton/McGuire L.P.)/(Nationsbank of
North Carolina N.A. LOC) A-1 1,900,000
------------------------------------------------------
6,230,000 Orange County, FL HFA, Multifamily Housing Revenue
Bonds Weekly VRDNs (Sutton Place. Ltd. Project)/
(Nationsbank of Maryland, N.A. LOC) A-1+ 6,230,000
------------------------------------------------------
1,715,000 Palm Beach County, FL IDA Weekly VRDNs
(Palm Beach Jewish Community Campus)/
(Sun Bank N.A., Orlando LOC) A-1+ 1,715,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
FLORIDA--CONTINUED
------------------------------------------------------
$ 5,500,000 Pinellas County, FL Health Facility Authority Daily
VRDNs (Chemical Bank, New York LOC) A-1 $ 5,500,000
------------------------------------------------------
10,870,000 Pinellas County, FL Health Facility Authority, (Series
1987) Weekly VRDNs (St. Mark Village
Project)/(Nationsbank of Florida, N.A. LOC) A-1 10,870,000
------------------------------------------------------
1,000,000 Pinellas County, FL Health Facility Authority, Multi-
Family Mortage Revenue Refunding Bonds (Series 1989-A)
Weekly VRDNs (McGregor Place Project)/(Nationsbank of
North Carolina N.A. LOC) A-1 1,000,000
------------------------------------------------------
4,325,000 Polk County, FL IDA, PCR Refunding Bonds Weekly VRDNs
(IMC Fertilizer, Inc. Project)/(Rabobank Nederland,
Utrecht LOC) P-1 4,325,000
------------------------------------------------------
9,300,000 Sarasota County, FL Public Hospital District, 4.15% CP
(Sarasota Memorial Hospital), Mandatory Tender
8/23/1995 A-1 9,300,000
------------------------------------------------------
9,100,000 Sarasota County, FL Public Hospital District, 4.15% CP
(Sarasota Memorial Hospital), Mandatory Tender
8/29/1995 A-1 9,100,000
------------------------------------------------------
1,800,000 Seminole County, FL Health Facility Authority IDA,
(Series 1991) Weekly VRDNs (Florida Living Nursing
Center)/(Barnett Bank of Central Florida, Orlando LOC) VMIG1 1,800,000
------------------------------------------------------
10,900,000 Southeast Volusia Hospital District, Revenue Bonds
(Series 1995) Weekly VRDNs (Bert Fish Medical Center,
FL)/(SouthTrust Bank of Alabama, Birmingham LOC) A-1 10,900,000
------------------------------------------------------
7,000,000 St. Lucie County, FL, IDR Bonds (Series 1985) Weekly
VRDNs (Savannahs Hospital)/(Nationsbank of Georgia,
N.A. LOC) P-1 7,000,000
------------------------------------------------------
4,800,000 Sunshine State Governmental Finance Commission, FL,
3.90% CP (Morgan Guaranty Trust Co., New York,
National Westminster Bank, PLC, London and Union Bank
of Switzerland, Zurich LOCs), Mandatory Tender
10/27/1995 VMIG1 4,800,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
FLORIDA--CONTINUED
------------------------------------------------------
$ 9,750,000 Suwannee County, FL, (Series 1989) Weekly VRDNs
(Advent Christian Village Project)/(Barnett Bank of
Jacksonville LOC) VMIG1 $ 9,750,000
------------------------------------------------------
6,400,000 Titusville, FL, Multi-Purpose Revenue Bonds,
Installment 1995A Weekly VRDNs (Banque Paribas, Paris
LOC) VMIG1 6,400,000
------------------------------------------------------
6,065,000 Volusia County, FL HFA Weekly VRDNs (Fisherman's
Landing)/(Mellon Bank N.A., Pittsburgh LOC) P-1 6,065,000
------------------------------------------------------
1,675,000 Volusia County, FL IDA Weekly VRDNs (Crane Cams)/
(First Interstate Bank of Arizona, N.A. LOC) P-1 1,675,000
------------------------------------------------------ --------------
Total 211,430,000
------------------------------------------------------ --------------
GEORGIA--1.5%
------------------------------------------------------
4,000,000 Atlanta, GA, Urban Residential Finance Authority,
Residential Construction Revenue Bonds, Summerhill
Neighborhood Bond Program (Series 1995) Weekly VRDNs
(First Union National Bank, Charlotte, N.C. LOC) A-1 4,000,000
------------------------------------------------------
1,500,000 Coweta County, GA IDA Daily VRDNs (Eckerds
Warehouse)/(Union Bank of Switzerland, Zurich LOC) A-1 1,500,000
------------------------------------------------------
1,600,000 DeKalb County, GA, (Series 1992) Weekly VRDNs
(American Cancer Society, GA)/(Trust Company Bank,
Atlanta LOC) P-1 1,600,000
------------------------------------------------------
3,395,000 Georgia State, HFA, Single Family Mortgage Revenue,
3.90% TOBs (Citibank, N.A. LIQ), Optional Tender
9/1/1995 NR(2) 3,395,000
------------------------------------------------------
12,000,000 Municipal Electric Authority of Georgia, (Series B),
4.25% TOBs, Optional Tender 6/1/1996 VMIG1 12,014,500
------------------------------------------------------
1,000,000 Rockdale County, GA Hospital Authority, Revenue
Anticipation Certificates (Series 1994) Weekly VRDNs
(Trust Company Bank, Atlanta LOC) VMIG1 1,000,000
------------------------------------------------------ --------------
Total 23,509,500
------------------------------------------------------ --------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
HAWAII--0.4%
------------------------------------------------------
$ 6,400,000 Hawaii State, Puttable Tax Exempt Receipts (Series 31)
Weekly VRDNs (Morgan Guaranty Trust Co.,
New York LIQ) VMIG1 $ 6,400,000
------------------------------------------------------ --------------
ILLINOIS--8.1%
------------------------------------------------------
13,000,000 Chicago O'Hare International Airport, Second Lien
Revenue Bonds, (Series 1984-B), 3.80% TOBs (Westpac
Banking, Corp., Sydney LOC), Optional Tender 1/1/1996 A-1 13,000,000
------------------------------------------------------
3,000,000 Illinois Development Finance Authority Weekly VRDNs
(Newlywed Food)/(Mellon Bank N.A., Pittsburgh LOC) A-1 3,000,000
------------------------------------------------------
5,000,000 Illinois Development Finance Authority, (Series
1993-A) Weekly VRDNs (Loyola Academy)/(Northern Trust
Co., Chicago, IL LOC) A-1+ 5,000,000
------------------------------------------------------
3,000,000 Illinois Educational Facilities Authority (Series
1992) Weekly VRDNs (Depaul University)/(Sanwa Bank
Ltd, Osaka LOC) VMIG1 3,000,000
------------------------------------------------------
7,500,000 Illinois Educational Facilities Authority, 4.25% CP
(Field Museum of Natural History)/(Sanwa Bank Ltd,
Osaka LOC), Mandatory Tender 9/7/1995 VMIG1 7,500,000
------------------------------------------------------
11,500,000 Illinois Educational Facilities Authority, Adjustable
Demand Revenue Bonds (Series 1995) Weekly VRDNs
(Ravinia Festival Association, IL)/(NBD Bank, N.A.,
Detroit, MI LOC) A-1+ 11,500,000
------------------------------------------------------
5,000,000 Illinois Health Facilities Authority Weekly VRDNs
(OSF Health Care Systems) VMIG1 5,000,000
------------------------------------------------------
14,000,000 Illinois Health Facilities Authority (Series 1989A)
Weekly VRDNs (Methodist Health Services Corp.)/
(Fuji Bank, Ltd., Tokyo LOC) A-1 14,000,000
------------------------------------------------------
14,940,000 Illinois Health Facilities Authority, 4.00% CP (Rush-
Presbyterian St. Luke's Medical)/(Northern Trust Co.,
Chicago, IL LIQ), Mandatory Tender 10/19/1995 A-1+ 14,940,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
ILLINOIS--CONTINUED
------------------------------------------------------
$35,000,000 Illinois Health Facilities Authority (Series 1985-B)
Weekly VRDNs (OSF Health Care Systems)/
(Bank of America Illinois LIQ) VMIG1 $ 35,000,000
------------------------------------------------------
13,900,000 Illinois State Toll Highway Authority, (Series 1993-B)
Weekly VRDNs (MBIA INS)/(Societe Generale,
Paris LIQ) VMIG1 13,900,000
------------------------------------------------------ --------------
Total 125,840,000
------------------------------------------------------ --------------
INDIANA--1.3%
------------------------------------------------------
1,115,000 Dale, IN IDA Weekly VRDNs (Spencer Industries)/
(National City Bank, Kentucky LOC) P-1 1,115,000
------------------------------------------------------
17,000,000 Indiana Bond Bank, Advance Funding Program Notes
(Series 1995-A3) VRNs, 1/10/1996 SP-1+ 17,000,000
------------------------------------------------------
2,445,000 Indiana Health Facilities Finance Authority
Rehabilitation Center Weekly VRDNs (Crossroads
Rehabilitation Center)/(Bank One, Indianapolis, IN
LOC) A-1 2,445,000
------------------------------------------------------ --------------
Total 20,560,000
------------------------------------------------------ --------------
KENTUCKY--0.1%
------------------------------------------------------
1,530,000 Boone County, KY, Adjustable Rate Revenue Refunding
Bonds Weekly VRDNs (Spring Meadow Associates)/
(Huntington National Bank, Columbus, OH LOC) P-1 1,530,000
------------------------------------------------------ --------------
LOUISIANA--1.9%
------------------------------------------------------
10,000,000 Louisiana PFA, 3.80% CP (Our Lady of Lake)/(FSA INS),
Mandatory Tender 8/21/1995 A-1 10,000,000
------------------------------------------------------
9,865,000 Louisiana PFA, Advance Funding Notes (Series 1994-B),
4.60% TANs (Orleans Parish, LA School Board),
8/31/1995 SP-1+ 9,868,120
------------------------------------------------------
9,130,000 St. James Parish, LA, PCR Refunding Bonds (Series
1988-B), 4.20% CP (Texaco, Inc.), Mandatory Tender
8/8/1995 A-1 9,130,000
------------------------------------------------------ --------------
Total 28,998,120
------------------------------------------------------ --------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
MARYLAND--3.6%
------------------------------------------------------
$24,200,000 Maryland Health & Higher Educational Facilities
Authority (Series 1985-B) Weekly VRDNs
(First National Bank of Chicago LOC) VMIG1 $ 24,200,000
------------------------------------------------------
4,000,000 Maryland Health & Higher Educational Facilities
Authority, Revenue Bonds (Series 1985-A) Weekly VRDNs
(Dai-Ichi Kangyo Bank Ltd., Tokyo LOC) VMIG1 4,000,000
------------------------------------------------------
10,110,000 Maryland State Community Development Administration
(Series 1987-2), 4.35% TOBs (First National Bank of
Chicago LIQ), Optional Tender 10/1/1995 NR(3) 10,110,000
------------------------------------------------------
300,000 Maryland State IDFA Kelly Springfield Tire, Economic
Development Revenue Refunding Bonds (Series 1994)
Weekly VRDNs (Johnson Controls, Inc.) VMIG1 300,000
------------------------------------------------------
2,000,000 Montgomery County, MD EDA Weekly VRDNs
(Howard Hughes Medical Center) A-1+ 2,000,000
------------------------------------------------------
9,300,000 Montgomery County, MD EDA Weekly VRDNs
(U.S. Pharmacopeial Convention Facility)/
(Chemical Bank, New York LOC) VMIG1 9,300,000
------------------------------------------------------
6,000,000 Montgomery County, MD Housing Opportunities
Commission, Single Family Mortgage Revenue Bonds
(Series 1994-C), 4.35% TOBs, Optional Tender
10/25/1995 VMIG1 6,000,000
------------------------------------------------------ --------------
Total 55,910,000
------------------------------------------------------ --------------
MASSACHUSETTS--0.9%
------------------------------------------------------
13,300,000 Massachusetts HEFA (Series I) Weekly VRDNs
(Harvard University) A-1+ 13,300,000
------------------------------------------------------ --------------
MICHIGAN--1.3%
------------------------------------------------------
4,350,000 Dearborn, MI Economic Development Corp. (Series 1991)
Weekly VRDNs (Oakbrook Common Project)/
(Mellon Bank N.A., Pittsburgh LOC) A-1 4,350,000
------------------------------------------------------
2,000,000 Michigan Municipal Bond Authority, 4.50% RANs,
7/3/1996 SP-1+ 2,012,412
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
MICHIGAN--CONTINUED
------------------------------------------------------
$ 1,700,000 Michigan State Hospital Finance Authority, Hospital
Equipment Loan Program Bonds (Series A) Weekly VRDNs
(First of America Bank Corp. LOC) VMIG1 $ 1,700,000
------------------------------------------------------
9,500,000 Michigan State, GO Notes, 5.00% TRANs, 9/29/1995 SP-1+ 9,511,856
------------------------------------------------------
2,695,000 Ottawa County, MI Economic Development Corp., Limited
Obligation Revenue Bonds (Series 1995-B) Weekly VRDNs
(Sunset Manor, Inc. Project)/
(Old Kent Bank & Trust Co., Grand Rapids LOC) A-1 2,695,000
------------------------------------------------------ --------------
Total 20,269,268
------------------------------------------------------ --------------
MINNESOTA--3.4%
------------------------------------------------------
2,065,000 Dakota County, MN Housing & Redevelopment Authority,
Multifamily Rental Housing Revenue Bonds (Series
1994-B) Weekly VRDNs (Westwood Ridge Senior Residence
Project)/(First Bank N.A., Minneapolis LOC) A-1 2,065,000
------------------------------------------------------
5,040,000 Minneapolis CDA, Revenue Refunding Bonds (Series 1995)
Weekly VRDNs (Walker Methodist Health Center, Inc.
Project)/(First Bank N.A., Minneapolis LOC) A+ 5,040,000
------------------------------------------------------
10,000,000 Minneapolis, MN (Series 1993) Weekly VRDNs
(Market Square Real Estate, Inc.)/(Norwest Bank
Minnesota, Minneapolis LOC) A-1+ 10,000,000
------------------------------------------------------
4,105,000 Minnesota State HFA, Single Family Mortgage Bonds
(Series 1993-T), 4.85% TOBs (Bayerische Landesbank
Girozentrale LOC), Mandatory Tender 12/14/1995 A-1+ 4,105,000
------------------------------------------------------
7,400,000 Minnesota State Higher Education Coordinating Board,
Supplemental Student Loan Program Variable Rate
Refunding Revenue Bonds (Series 1994-A) Weekly VRDNs
(Norwest Bank Minnesota, Minneapolis LIQ) VMIG1 7,400,000
------------------------------------------------------
19,500,000 Rochester, MN Health Care Facility Authority Weekly
VRDNs (Mayo Foundation) VMIG1 19,500,000
------------------------------------------------------
800,000 St. Paul, MN Port Authority (Series 1991) Weekly VRDNs
(West Gate Office)/(First Bank N.A., Minneapolis LOC) A-1 800,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
MINNESOTA--CONTINUED
------------------------------------------------------
$ 4,200,000 University of Minnesota (Series G), 4.50% TOBs
(Regents of University of Minnesota), Optional Tender
8/1/1995 VMIG1 $ 4,200,000
------------------------------------------------------ --------------
Total 53,110,000
------------------------------------------------------ --------------
MISSISSIPPI--1.2%
------------------------------------------------------
1,770,000 Hinds County, MS (Series 1991) Weekly VRDNs (North
State St. Project)/(Amsouth Bank N.A., Birmingham LOC) VMIG1 1,770,000
------------------------------------------------------
16,600,000 Jackson County, MS Port Facility Daily VRDNs
(Chevron U.S.A., Inc.) P-1 16,600,000
------------------------------------------------------ --------------
Total 18,370,000
------------------------------------------------------ --------------
MISSOURI--0.3%
------------------------------------------------------
4,200,000 Poplar Bluff, MO IDA (Series 1987) Weekly VRDNs (Gates
Rubber Co.)/(NBD Bank, N.A., Detroit, MI LOC) A-1+ 4,200,000
------------------------------------------------------ --------------
NEW JERSEY--1.1%
------------------------------------------------------
11,600,000 Essex County, NJ, (Series 1995-B), 5.00% TANs
(Chemical Bank, New York LOC), 8/22/1995 MIG1 11,605,114
------------------------------------------------------
5,000,000 Mercer County, NJ, 5.50% BANs, 9/20/1995 NR(2) 5,003,952
------------------------------------------------------ --------------
Total 16,609,066
------------------------------------------------------ --------------
NEW YORK--8.9%
------------------------------------------------------
16,600,000 New York City Municipal Water Finance Authority, Water
and Sewer System Revenue Bonds (Series 1995-A) Daily
VRDNs (FGIC INS)/(FGIC Securities Purchase, Inc. LIQ) A-1+ 16,600,000
------------------------------------------------------
29,800,000 New York Metropolitan Transportation Authority Weekly
VRDNs (Bank of Tokyo Ltd., Tokyo, Industrial Bank of
Japan Ltd., Tokyo, J.P. Morgan Wilmington, Delaware,
Mitsubishi Bank Ltd, Tokyo, Morgan Guaranty Trust Co.,
New York, National Westminster Bank, PLC, London and
Sumitomo Bank Ltd., Osaka LOCs) A-1 29,800,000
------------------------------------------------------
29,900,000 New York State Local Government Assistance Corp.
(Series D), 3.20% TOBs (Societe Generale, Paris LOC),
Mandatory Tender 8/2/1995 A-1+ 29,900,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
NEW YORK--CONTINUED
------------------------------------------------------
$21,600,000 New York State Local Government Assistance Corp.
(Series E), 3.20% TOBs (Canadian Imperial Bank of
Commerce, Toronto LOC), Mandatory Tender 8/2/1995 A-1+ $ 21,600,000
------------------------------------------------------
23,110,000 Niagara County, NY IDA, Solid Waste Disposal Facility
Revenue Bonds (Series 1994-A) Weekly VRDNs (American
Ref-Fuel Company)/(Air Products & Chemicals, Inc. and
Browning-Ferris Industries,
Inc. GTDs) A-1 23,110,000
------------------------------------------------------
14,000,000 Suffolk County, NY, 1995 (RA Series I), 5.25% TANs
(Westdeutsche Landesbank Girozentrale LOC), 8/15/1995 SP-1+ 14,002,354
------------------------------------------------------
3,800,000 Syracuse, NY IDA Syracuse, Multi Modal Civic
Facility Revenue Bonds (Series 1993) Daily VRDNs
(Syracuse University Eggers Halls Project)/
(Morgan Guaranty Trust Co., New York LOC) A-1+ 3,800,000
------------------------------------------------------ --------------
Total 138,812,354
------------------------------------------------------ --------------
NORTH CAROLINA--4.4%
------------------------------------------------------
30,000,000 Charlotte-Mecklenburg Hospital Authority, NC, Loan
Participation Certificates (1995) VRNs (The Charlotte-
Mecklenburg Hospital Authority), 5/22/1996 NR(2) 30,000,000
------------------------------------------------------
4,320,000 Fayetteville, NC Public Works Commission, Revenue
Refunding Bonds Weekly VRDNs (FGIC INS)/
(Merrill Lynch Capital Services, Inc. LIQ) VMIG1 4,320,000
------------------------------------------------------
4,000,000 Greensboro, NC, Certificates of Participation 1994
Equipment Project Weekly VRDNs (Greensboro, NC Center
City Corp.)/(Wachovia Bank of Georgia N.A., Atlanta
LIQ) A-1+ 4,000,000
------------------------------------------------------
15,000,000 Martin County, NC IFA, (Series 1993) Weekly VRDNs
(Weyerhaeuser Co.) A-1 15,000,000
------------------------------------------------------
745,000 NCNB Pooled Tax-Exempt Trust (Series 1990-A)
Weekly VRDNs (NCNB Tax Exempt Trust 1990a)/
(Nationsbank of North Carolina N.A. LOC) P-1 745,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
NORTH CAROLINA--CONTINUED
------------------------------------------------------
$ 4,700,000 North Carolina Medical Care Commission Hospital,
Revenue Bonds (Series 1994) Weekly VRDNs
(Hugh Chatam Memorial/Rutherford Hospitals)/
(First Union National Bank, Charlotte, N.C. LOC) VMIG1 $ 4,700,000
------------------------------------------------------
10,000,000 North Carolina Municipal Power Agency No 1, 3.50% CP
(Bank of America NT and SA, San Francisco, Canadian
Imperial Bank of Commerce, Toronto, First Union
National Bank, Charlotte, N.C., Industrial Bank of
Japan Ltd., Tokyo, Morgan Guaranty Trust Co., New York
and Nationsbank of North Carolina N.A. LIQs),
Mandatory Tender 10/26/1995 P-1 10,000,000
------------------------------------------------------ --------------
Total 68,765,000
------------------------------------------------------ --------------
OHIO--5.7%
------------------------------------------------------
2,700,000 Akron, Bath & Copley, OH Joint Township Weekly VRDNs
(Visiting Nurses)/(National City Bank, Cleveland, OH
LOC) A-1 2,700,000
------------------------------------------------------
2,585,000 Ashland County, OH Health Care Weekly VRDNs (Brethren
Care, Inc.)/(National City Bank,
Cleveland, OH LOC) P-1 2,585,000
------------------------------------------------------
8,850,000 Cincinnati City School District, OH, 5.80% TANs,
12/29/1995 NR(3) 8,863,842
------------------------------------------------------
1,100,000 Cuyahoga County, OH Hospital Authority Weekly VRDNs
(St. Lukes Hospital)/(First National Bank of Chicago
LOC) VMIG1 1,100,000
------------------------------------------------------
2,650,000 Cuyahoga County, OH IDA Weekly VRDNs (H.P. Parking
Co.)/(Society National Bank, Cleveland, OH LOC) P-1 2,650,000
------------------------------------------------------
2,000,000 Dayton, OH, Revenue Refunding Bonds (Series 1993-E)
Weekly VRDNs (Emery Air Freight Corp.)/(Mellon Bank
N.A., Pittsburgh LOC) VMIG1 2,000,000
------------------------------------------------------
6,100,000 Franklin County, OH Hospital Facility Authority
Weekly VRDNs (Riverside United Methodist Hospital)/
(National City Bank, Cleveland, OH LOC) VMIG1 6,100,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
OHIO--CONTINUED
------------------------------------------------------
$12,400,000 Hamilton County, OH Hospital Facilities Authority,
Revenue Bonds (Series 1986-A) Weekly VRDNs
(Good Samaritan Hospital) A-1 $ 12,400,000
------------------------------------------------------
2,500,000 Kettering, OH IDA Weekly VRDNs (Center-Plex
Venture)/(Society National Bank, Cleveland, OH LOC) P-1 2,500,000
------------------------------------------------------
2,885,000 Lorain County, OH, Health Facilities Revenue Bonds
(Series 1992-A) Weekly VRDNs (Elyria United Methodist
Home)/(Fifth Third Bancorp LOC) P-1 2,885,000
------------------------------------------------------
2,000,000 Lucas County, OH IDA (Series 1991) Weekly
VRDNs (Ohio Citizens Bank)/(National City Bank,
Cleveland, OH LOC) P-1 2,000,000
------------------------------------------------------
295,000 Lucas County, OH, Hospital Improvement Revenue Weekly
VRDNs (Sunshine Children's Home)/
(National City Bank, Cleveland, OH LOC) P-1 295,000
------------------------------------------------------
4,300,000 Lucas County, OH, Hospital Refunding Revenue
Bonds Weekly VRDNs (Riverside Hospital, OH)/
(Huntington National Bank, Columbus, OH LOC) P-1 4,300,000
------------------------------------------------------
6,900,000 Mahoning County, OH, Housing Revenue Bonds (Series
1995) Weekly VRDNs (Copeland Oaks Project)/(Bank One,
Akron, N.A. LOC) A-1+ 6,900,000
------------------------------------------------------
2,210,000 Marion County, OH Hospital Authority (Series 1991),
4.25% TOBs (Marion County, OH Pooled Hospital
Program)/(Bank One, Columbus, N.A. LOC)
Optional Tender 11/1/1995 A-1+ 2,210,000
------------------------------------------------------
4,250,000 Mayfield Village, OH IDA Weekly VRDNs (Beta Campus
Co.)/(First Union National Bank, Charlotte, N.C. LOC) P-1 4,250,000
------------------------------------------------------
5,400,000 Medina County, OH, Solid Waste Disposal Revenue Bonds
(Series 1995) Weekly VRDNs (Valley City
Steel Company Project)/(Society National Bank,
Cleveland, OH LOC) P-1 5,400,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
OHIO--CONTINUED
------------------------------------------------------
$ 800,000 Montgomery County, OH IDA Weekly VRDNs
(Center-Plex Venture)/(Society National Bank,
Cleveland, OH LOC) P-1 $ 800,000
------------------------------------------------------
1,700,000 Montgomery, OH IDA Weekly VRDNs (Bethesda Two Limited
Partnership)/(Huntington National Bank, Columbus, OH
LOC) A-1 1,700,000
------------------------------------------------------
4,700,000 Muskingham County, OH Hospital Facilities
Authority Weekly VRDNs (Bethesda Care System)/
(National City Bank, Columbus, OH LOC) VMIG1 4,700,000
------------------------------------------------------
1,800,000 Ohio State Air Quality Development Authority (Series
1998-A) Weekly VRDNs (PPG Industries, Inc.) P-1 1,800,000
------------------------------------------------------
4,080,000 Ohio State Water Development Authority,
Pure Water Refunding & Improvement Bonds
(Series PA-56) Weekly VRDNs (AMBAC INS)/
(Merrill Lynch Capital Services, Inc. LIQ) VMIG1 4,080,000
------------------------------------------------------
1,800,000 Rickenbacker, OH Port Authority (Series 1992)
Weekly VRDNs (Rickenbacker Holdings, Inc.)/
(Bank One, Columbus, N.A. LOC) P-1 1,800,000
------------------------------------------------------
1,900,000 Seneca County, OH Hospital Facility Authority Weekly
VRDNs (St. Francis Home)/(National City Bank,
Cleveland, OH LOC) VMIG1 1,900,000
------------------------------------------------------
800,000 Solon, OH, IDA Weekly VRDNs (Solon Industries)/
(Society National Bank, Cleveland, OH LOC) P-1 800,000
------------------------------------------------------
1,100,000 Twinsburg, OH IDA Weekly VRDNs (Care of Massara)/
(Society National Bank, Cleveland, OH LOC) P-1 1,100,000
------------------------------------------------------ --------------
Total 87,818,842
------------------------------------------------------ --------------
OKLAHOMA--0.6%
------------------------------------------------------
10,000,000 Holdenville, OK Industrial Authority, Correctional
Facility Revenue Bonds (Series 1995) Weekly VRDNs
(Holdenville, OK Correctional Facility)/
(First Union National Bank, Charlotte, N.C. LOC) VMIG1 10,000,000
------------------------------------------------------ --------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
OREGON--0.1%
------------------------------------------------------
$ 2,000,000 Oregon Health, Housing & Cultural Facilities
Authority, Adjustable Rate Revenue Bonds (Series
1995-A) Weekly VRDNs (Guide Dogs for the Blind, Inc.
Project)/
(Banque Nationale de Paris LOC) MIG1 $ 2,000,000
------------------------------------------------------ --------------
PENNSYLVANIA--2.5%
------------------------------------------------------
5,000,000 Allegheny County, PA IDA, PCR (Series 1992-A),
4.80% TOBs (Duquesne Light Power Co.)/
(Canadian Imperial Bank of Commerce, Toronto LOC),
Mandatory Tender 10/17/1995 P-1 5,000,000
------------------------------------------------------
4,000,000 Beaver County, PA IDA, PCR Refunding Bonds (1994
Series), 4.50% CP (Duquesne Light Power Co.)/ (Swiss
Bank Corp., New York, NY LOC), Mandatory Tender
10/10/1995 A-1+ 4,000,000
------------------------------------------------------
6,300,000 Delaware County, PA PCR (Series C), 4.00% CP
(Philadelphia Electric Co.)/(FGIC INS), Mandatory
Tender 10/6/1995 A-1+ 6,300,000
------------------------------------------------------
4,200,000 Delaware County, PA Weekly VRDNs
(American College)/(PNC Bank, N.A. LOC) P-1 4,200,000
------------------------------------------------------
5,600,000 Erie County, PA Hospital Authority Weekly VRDNs (St.
Vincent Health System)/(Fuji Bank, Ltd., Tokyo LOC) A-1 5,600,000
------------------------------------------------------
1,300,000 Pennsylvania State Higher Education Facilities
Authority Weekly VRDNs (Carnegie-Mellon University) A-1 1,300,000
------------------------------------------------------
6,000,000 Philadelphia, PA, GO (Series 1990), 3.90% CP (Fuji
Bank, Ltd., Tokyo LOC), Mandatory Tender 8/23/1995 A-1 6,000,000
------------------------------------------------------
3,690,000 Pittsburgh, PA, GO Unlimited Bonds (Series B), 4.10%
BONDs (AMBAC INS), 9/1/1995 NR(1) 3,690,300
------------------------------------------------------
500,000 Sayre, PA, Health Care Facilities Authority Weekly
VRDNs (VHA of Pennsylvania)/(AMBAC INS)/
(First National Bank of Chicago LIQ) A-1 500,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
------------------------------------------------------
$ 2,000,000 Washington County, PA Hospital Authority Weekly VRDNs
(Keystone Diversified Management Corp.)/
(Mellon Bank N.A., Pittsburgh LOC) A-1 $ 2,000,000
------------------------------------------------------ --------------
Total 38,590,300
------------------------------------------------------ --------------
PUERTO RICO--0.6%
------------------------------------------------------
10,000,000 Puerto Rico Government Development Bank Weekly VRDNs
(Credit Suisse, Zurich LOC) A-1+ 10,000,000
------------------------------------------------------ --------------
SOUTH CAROLINA--0.5%
------------------------------------------------------
3,000,000 Greenville, SC Hospital System Board of Trustees,
(Series 1993-B) Weekly VRDNs (Greenville County, SC
Hospital Authority) A-1+ 3,000,000
------------------------------------------------------
5,000,000 University of South Carolina, Athletic Facilities
(Series 1995), 5.25% BANs, 3/1/1996 NR(3) 5,031,756
------------------------------------------------------ --------------
Total 8,031,756
------------------------------------------------------ --------------
TENNESSEE--3.1%
------------------------------------------------------
10,000,000 Chattanooga, TN HEFA Weekly VRDNs
(Mccallie School)/(Trust Company Bank, Atlanta LOC) A-1+ 10,000,000
------------------------------------------------------
22,400,000 Chattanooga, TN HEFA Weekly VRDNs
(Sisken Hospital)/(Sumitomo Bank Ltd., Osaka LOC) A-1 22,400,000
------------------------------------------------------
2,200,000 Metropolitan Nashville Tennessee AA, (Series 1993)
Weekly VRDNs (FGIC INS)/(Societe Generale, Paris LIQ) A-1+ 2,200,000
------------------------------------------------------
7,330,000 Nashville and Davidson County, NC IDB, Metropolitan
Government Revenue Bonds (Series 1995) Weekly VRDNs
(YMCA Projects)/(Nationsbank of Tennessee LOC) P-1 7,330,000
------------------------------------------------------
6,200,000 Roane, TN IDB, (Series 1982) Monthly VRDNs
(Fortafil Fibers, Inc. Project)/(ABN AMRO Bank N.V.,
Amsterdam LOC) A-1+ 6,200,000
------------------------------------------------------ --------------
Total 48,130,000
------------------------------------------------------ --------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
TEXAS--2.0%
------------------------------------------------------
$ 4,325,000 Dallas, TX (Series C), 3.90% TOBs, Optional Tender
6/15/1996 NR(1) $ 4,325,000
------------------------------------------------------
11,050,000 Harris County, TX HFDC (Series B), 3.90% TOBs
(San Jacinto Methodist Hospital)/(Morgan Guaranty
Trust Co., New York LOC), Mandatory Tender 9/1/1995 A-1+ 11,050,000
------------------------------------------------------
7,000,000 Harris County, TX, Toll Road Unlimited Tax & Sub Lien
Revenue (Series 1994-G) Weekly VRDNs A-1+ 7,000,000
------------------------------------------------------
2,000,000 Montgomery County, TX IDC, IDRB Weekly VRDNs (Houston
Area Research Center)/(Morgan Guaranty Trust Co., New
York LOC) A-1+ 2,000,000
------------------------------------------------------
1,920,000 North Richland Hills, TX IDC Weekly VRDNs (Tecnol,
Inc.)/(Nationsbank of North Carolina N.A. LOC) P-1 1,920,000
------------------------------------------------------
5,000,000 Texas State Department of Housing & Community
Affairs, Multifamily Housing Revenue Refunding Bonds
(Remington Hill Series B) Weekly VRDNs
(Trust Company Bank, Atlanta LOC) A-1+ 5,000,000
------------------------------------------------------ --------------
Total 31,295,000
------------------------------------------------------ --------------
UTAH--1.3%
------------------------------------------------------
19,670,000 Utah State HFA, Single Family Mortgage
Bonds (Series 1995-1) Weekly VRDNs
(Westdeutsche Landesbank Girozentrale LIQ) A-1+ 19,670,000
------------------------------------------------------ --------------
VIRGINIA--0.8%
------------------------------------------------------
1,500,000 Arlington County, VA Weekly VRDNs
(Ballston Public Parking)/(Citibank, NA LOC) A-1+ 1,500,000
------------------------------------------------------
6,200,000 Henrico County, VA IDA, (Series 1994) Daily
VRDNs (Virginia United Methodist Homes, Inc.)/
(Nationsbank of Virginia, N.A. LOC) VMIG1 6,200,000
------------------------------------------------------
5,000,000 Virginia State Housing Development Authority, (Series
1993-A), 3.45% TOBs, Mandatory Tender 9/12/1995 A-1+ 5,000,000
------------------------------------------------------ --------------
Total 12,700,000
------------------------------------------------------ --------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
WASHINGTON--0.4%
------------------------------------------------------
$ 5,535,000 Pierce County, WA (Series 1995), 4.50% TANs,
12/27/1995 NR(3) $ 5,537,682
------------------------------------------------------ --------------
WEST VIRGINIA--0.5%
------------------------------------------------------
7,960,000 Cabell County Commission, WV, Life Care Facilities
Multi-Option Adjustable Rate Revenue Bonds (Series
1995) Weekly VRDNs (Foster Foundation)/(Huntington
National Bank, Columbus, OH LOC) A-1 7,960,000
------------------------------------------------------ --------------
WISCONSIN--2.3%
------------------------------------------------------
1,100,000 Seymour, WI IDA Weekly VRDNs (Beatrice Cheese,
Inc.)/(Bank of New York, New York LOC) P-1 1,100,000
------------------------------------------------------
34,000,000 Wisconsin HEFA Weekly VRDNs (St. Luke's Medical
Center)/(Sumitomo Bank Ltd., Osaka LOC) VMIG1 34,000,000
------------------------------------------------------ --------------
Total 35,100,000
------------------------------------------------------ --------------
WYOMING--0.4%
------------------------------------------------------
1,125,000 Natrona County, WY, Hospital Revenue, 5.85% TOBs
(Grainger W.W., Inc.), Optional Tender 12/1/1995 P-1 1,125,000
------------------------------------------------------
4,400,000 Sweetwater County, WY IDA, PCR Refunding
Bonds (Series 1990-A) Weekly VRDNs (Pacificorp)/
(Credit Suisse, Zurich LOC) VMIG1 4,400,000
------------------------------------------------------ --------------
Total 5,525,000
------------------------------------------------------ --------------
NO STATE--1.4%
------------------------------------------------------
10,000,000 Clipper Tax Exempt Trust (Series 1993-1) Weekly VRDNs
(State Street Bank and Trust Co. LIQ) A-1+ 10,000,000
------------------------------------------------------
6,440,583 LaSalle National Bank Leasetops Trust (Series 1994-B)
Weekly VRDNs (Lasalle National Bank, Chicago LIQ)/
(Lasalle National Bank, Chicago LOC) A-1+ 6,440,583
------------------------------------------------------
1,934,628 LaSalle National Bank Tax-Exempt Trust (Series 1993-A)
Weekly VRDNs (Lasalle National Bank, Chicago LIQ)/
(Lasalle National Bank, Chicago LOC) A-1+ 1,934,628
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
NO STATE--CONTINUED
------------------------------------------------------
$ 3,040,000 Merrill Lynch Puttable FLOATs/RITES Trust
(Series PP2) Weekly VRDNs VMIG1 $ 3,040,000
------------------------------------------------------ --------------
Total 21,415,211
------------------------------------------------------ --------------
TOTAL INVESTMENTS, AT AMORTIZED COST(A) $1,553,856,743
------------------------------------------------------ --------------
</TABLE>
(a) Also represents cost for federal tax purposes.
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
Note: The categories of investments are shown as a percentage of net assets
($1,547,473,496) at July 31, 1995.
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
The following acronyms are used throughout this portfolio:
<TABLE>
<S> <C>
AMBAC --American Municipal Bond Assurance Corporation
BANs --Bond Anticipation Notes
CDA --Community Development Administration
CP --Commercial Paper
EDA --Economic Development Authority
FGIC --Financial Guaranty Insurance Company
FSA --Financial Security Assurance
GO --General Obligation
GTDs --Guarantees
HEFA --Health and Education Facilities Authority
HFA --Housing Finance Authority
HFDC --Health Facility Development Corporation
IDA --Industrial Development Authority
IDB --Industrial Development Bond
IDC --Industrial Development Corporation
IDR --Industrial Development Revenue
IDRB --Industrial Development Revenue Bonds
IDFA --Industrial Development Finance Authority
IFA --Industrial Finance Authority
INS --Insurance
LIQ --Liquidity Agreement
LOCs --Letter(s) of Credit
LOC --Letter of Credit
MBIA --Municipal Bond Investors Assurance
PCR --Pollution Control Revenue
PFA --Public Facility Authority
PLC --Public Limited Company
RANs --Revenue Anticipation Notes
TANs --Tax Anticipation Notes
TOBs --Tender Option Bonds
TRANs --Tax and Revenue Anticipation Notes
VHA --Veterans Housing Administration
VRDNs --Variable Rate Demand Notes
VRNs --Variable Rate Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TAX-FREE OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $1,553,856,743
- ------------------------------------------------------------------------------
Cash 933,463
- ------------------------------------------------------------------------------
Income receivable 9,103,589
- ------------------------------------------------------------------------------ --------------
Total assets 1,563,893,795
- ------------------------------------------------------------------------------
LIABILITIES:
- ------------------------------------------------------------------------------
Payable for investments purchased $11,518,668
- ----------------------------------------------------------------
Income distribution payable 4,394,007
- ----------------------------------------------------------------
Accrued expenses 507,624
- ---------------------------------------------------------------- -----------
Total liabilities 16,420,299
- ------------------------------------------------------------------------------ --------------
NET ASSETS for 1,547,494,731 shares outstanding $1,547,473,496
- ------------------------------------------------------------------------------ --------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Paid in capital 1,547,494,731
- ------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments (21,235)
- ------------------------------------------------------------------------------ --------------
Total Net Assets $1,547,473,496
- ------------------------------------------------------------------------------ --------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
Institutional Shares:
($1,295,457,878 / 1,295,478,935 shares outstanding) $1.00
- ------------------------------------------------------------------------------ --------------
Institutional Service Shares:
($252,015,618 / 252,015,796 shares outstanding) $1.00
- ------------------------------------------------------------------------------ --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TAX-FREE OBLIGATIONS FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest $44,477,152
- -----------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Investment advisory fee $2,318,805
- ----------------------------------------------------------------------
Administrative personnel and services fee 877,668
- ----------------------------------------------------------------------
Custodian fees 110,650
- ----------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 43,928
- ----------------------------------------------------------------------
Directors'/Trustees' fees 5,202
- ----------------------------------------------------------------------
Auditing fees 12,951
- ----------------------------------------------------------------------
Legal fees 16,729
- ----------------------------------------------------------------------
Portfolio accounting fees 128,996
- ----------------------------------------------------------------------
Shareholder services fee--Institutional Shares 2,520,292
- ----------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 378,074
- ----------------------------------------------------------------------
Share registration costs 337,930
- ----------------------------------------------------------------------
Printing and postage 28,823
- ----------------------------------------------------------------------
Insurance premiums 15,420
- ----------------------------------------------------------------------
Taxes 22
- ----------------------------------------------------------------------
Miscellaneous 14,033
- ---------------------------------------------------------------------- ----------
Total expenses 6,809,523
- ----------------------------------------------------------------------
Deduct--
- ----------------------------------------------------------
Waiver of investment advisory fee $1,581,210
- ----------------------------------------------------------
Waiver of shareholder services fee--Institutional Shares 2,520,292 4,101,502
- ---------------------------------------------------------- ---------- ----------
Net expenses 2,708,021
- ----------------------------------------------------------------------------------- -----------
Net investment income 41,769,131
- ----------------------------------------------------------------------------------- -----------
Net realized gain (loss) on investments (1,395)
- ----------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $41,767,736
- ----------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TAX-FREE OBLIGATIONS FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
---------------------------------
1995 1994
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------
Net investment income $ 41,769,131 $ 16,807,122
- -------------------------------------------------------------
Net realized gain/loss on investments ($40 net gain and
$19,220 net loss, respectively, as computed for federal
income tax purposes) (1,395) 3,986
- ------------------------------------------------------------- --------------- ---------------
Change in assets resulting from operations 41,767,736 16,811,108
- ------------------------------------------------------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------
Distributions from net investment income:
- -------------------------------------------------------------
Institutional Shares (36,508,581) (16,783,291)
- -------------------------------------------------------------
Institutional Service Shares (5,260,550) (23,831)
- ------------------------------------------------------------- --------------- ---------------
Change in net assets resulting from distributions
to shareholders (41,769,131) (16,807,122)
- ------------------------------------------------------------- --------------- ---------------
SHARE TRANSACTIONS--
- -------------------------------------------------------------
Proceeds from sale of Shares 7,385,500,551 3,346,441,976
- -------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment
of distributions declared 2,286,899 460,949
- -------------------------------------------------------------
Cost of Shares redeemed (6,655,215,610) (2,986,122,657)
- ------------------------------------------------------------- --------------- ---------------
Change in net assets resulting from share transactions 732,571,840 360,780,268
- ------------------------------------------------------------- --------------- ---------------
Change in net assets 732,570,445 360,784,254
- -------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------
Beginning of period 814,903,051 454,118,797
- ------------------------------------------------------------- --------------- ---------------
End of period $ 1,547,473,496 $ 814,903,051
- ------------------------------------------------------------- --------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TAX-FREE OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Money Market Obligations 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 six diversified portfolios. The
financial statements included herein are only those of Tax-Free Obligations Fund
(the "Fund"). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held. The Fund offers
two classes of shares: Institutional Shares and Institutional Service Shares.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
At July 31, 1995, the Fund, for federal tax purposes, had a capital loss
carryforward of $19,800, which will reduce the Fund's taxable income
arising from future net realized gain on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of the distributions
to shareholders which would otherwise be necessary to relieve the Fund of
any liability for federal tax. Pursuant to the Code, such capital loss
carryforward will expire as follows:
<TABLE>
<CAPTION>
EXPIRATION YEAR EXPIRATION AMOUNT
- --------------- -----------------
<S> <C>
2001 $580
2002 $19,220
</TABLE>
Additionally, net capital losses of $1,435 attributable to security
transactions incurred after October 31, 1994 are treated as arising on
August 1, 1995, the first day of the Fund's next taxable year.
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
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.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At July 31, 1995, capital paid-in aggregated $1,547,494,731.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
--------------------------------
INSTITUTIONAL SHARES 1995 1994
- -------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Shares sold 6,466,015,512 3,312,845,513
- --------------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 1,609,289 460,949
- --------------------------------------------------------------
Shares redeemed (5,961,920,320) (2,977,674,630)
- -------------------------------------------------------------- -------------- --------------
Net change resulting from Institutional Share transactions 505,704,481 335,631,832
- -------------------------------------------------------------- -------------- --------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
--------------------------------
INSTITUTIONAL SERVICE SHARES 1995 1994*
- -------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Shares sold 919,485,039 33,596,463
- --------------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 677,610 --
- --------------------------------------------------------------
Shares redeemed (693,295,290) (8,448,027)
- -------------------------------------------------------------- -------------- --------------
Net change resulting from Institutional Service Share
transactions 226,867,359 25,148,436
- -------------------------------------------------------------- -------------- --------------
Net change resulting from share transactions 732,571,840 360,780,268
- -------------------------------------------------------------- -------------- --------------
</TABLE>
* For the period from July 5, 1994 (date of initial public offering) to July 31,
1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser,
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .20 of 1% of the Fund's average daily net assets.
The Adviser may voluntarily choose to waive a portion of its fee and/or
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. This fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services (FSS), the Fund will pay FSS up to 0.25 of
1% of daily average net assets of the Fund for the period. This fee is to obtain
certain personal services for shareholders and to maintain shareholder accounts.
FSS may voluntarily choose to waive a portion of this fee. FSS can modify or
terminate this voluntary waiver at any time at its sole discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. The FServ fee is based on the size, type, and number of accounts and
transactions made by shareholders.
INTERFUND TRANSACTIONS--During the year ended July 31, 1995, the Fund engaged in
purchase and sale transactions with funds that have a common investment adviser
(or affiliated investment advisers), common Directors/Trustees, and/or common
Officers. These transactions were made at current market value pursuant to Rule
17a-7 under the Act amounting to $2,395,054,229 and $2,346,849,715,
respectively.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Trust's accounting records
for which it receives a fee. The fee is based on the level of the Trust's
average daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors of the above companies.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
MONEY MARKET OBLIGATIONS TRUST:
(Tax-Free Obligations Fund)
We have audited the accompanying statement of assets and liabilities of Tax-Free
Obligations Fund (an investment portfolio of Money Market Obligations Trust, a
Massachusetts business trust), including the schedule of portfolio investments,
as of July 31, 1995, the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for the periods presented. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of July
31, 1995, by correspondence with the custodian and broker. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Tax-Free Obligations Fund (an investment portfolio of Money Market Obligations
Trust) as of July 31, 1995, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for the periods presented, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
September 8, 1995
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Tax-Free Obligations Fund
Institutional Shares Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8600
Trust Company Boston, Massachusetts 02266-8600
- ------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, Massachusetts 02266-8600
- ------------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-FREE
OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET
OBLIGATIONS TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
A Diversified Portfolio of Money Market
Obligations Trust, an Open-End Management
Investment Company
Prospectus dated September 30, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 60934N401
9110207A-IS (9/95)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-FREE OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
The Institutional Service Shares of Tax-Free Obligations Fund (the "Fund")
offered by this prospectus represent interests in a diversified portfolio of
Money Market Obligations Trust (the "Trust"), an open-end management investment
company (a mutual fund). The Fund invests in municipal securities to provide
dividend income exempt from federal regular income tax consistent with stability
of principal.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR 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 THESE
SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE FUND
ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE; THERE CAN BE
NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Combined Statement of Additional Information dated
September 30, 1995, with the Securities and Exchange Commission. The information
contained in the Combined Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Combined Statement
of Additional Information, which is in paper form only, or a paper copy of this
prospectus, if you have received your prospectus electronically, free of charge
by calling 1-800-235-4669. To obtain other information, or make inquiries about
the Fund, contact the Fund at the address listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated September 30, 1995
TABLE OF CONTENTS
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SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS--
INSTITUTIONAL SERVICE SHARES 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Municipal Securities 6
Investment Risks 6
Investment Limitations 7
Regulatory Compliance 7
TRUST INFORMATION 7
- ------------------------------------------------------
Management of the Trust 7
Distribution of Shares 8
Administration of the Fund 9
NET ASSET VALUE 9
- ------------------------------------------------------
INVESTING IN THE FUND 10
- ------------------------------------------------------
Share Purchases 10
Minimum Investment Required 10
Subaccounting Services 10
Certificates and Confirmations 11
Dividends 11
Capital Gains 11
REDEEMING SHARES 11
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By Mail 11
Telephone Redemption 12
Accounts with Low Balances 12
SHAREHOLDER INFORMATION 13
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Voting Rights 13
Massachusetts Partnership Law 13
TAX INFORMATION 13
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Federal Income Tax 13
Pennsylvania Corporate and
Personal Property Taxes 14
OTHER CLASSES OF SHARES 14
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PERFORMANCE INFORMATION 15
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FINANCIAL STATEMENTS 16
- ------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS 45
- ------------------------------------------------------
ADDRESSES 46
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INSTITUTIONAL SERVICE SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)........................................ None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)........................................ None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable)...................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)........... None
Exchange Fee................................................................. None
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)(1)............................................. 0.06%
12b-1 Fee.................................................................... None
Total Other Expenses......................................................... 0.39%
Shareholder Services Fee................................................... 0.25%
Total Operating Expenses(2)............................................. 0.45%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary waiver
at any time at its sole discretion. The maximum management fee is 0.20%.
(2) The total operating expenses would have been 0.59% absent the voluntary
waiver of a portion of the management fee.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF INSTITUTIONAL SERVICE SHARES OF
THE FUND WILL BEAR, EITHER DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE
DESCRIPTIONS OF THE VARIOUS COSTS AND EXPENSES, SEE "INVESTING IN THE FUND" AND
"TRUST INFORMATION." WIRE-TRANSFERRED REDEMPTIONS OF LESS THAN $5,000 MAY BE
SUBJECT TO ADDITIONAL FEES.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and (2)
redemption at the end of each time period........ $5 $14 $25 $57
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
TAX-FREE OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Independent Public Accountants, on page 45.
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------
1995 1994(A)
------ ------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
- ---------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------
Net investment income 0.03 0.002
- ---------------------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------------------
Distributions from net investment income (0.03) (0.002)
- --------------------------------------------------------------- ------ ------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
- --------------------------------------------------------------- ------ ------
TOTAL RETURN (B) 3.39% 0.18%
- ---------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------------
Expenses 0.45% 0.39%(c)
- ---------------------------------------------------------------
Net investment income 3.48% 3.04%(c)
- ---------------------------------------------------------------
Expense waiver/reimbursement (d) 0.14% 0.15%(c)
- ---------------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------------
Net assets, end of period (000 omitted) $252,016 $25,148
- ---------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from July 5, 1994 (date of initial public
investment) to July 31, 1994.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated October 3, 1988. The Declaration of Trust permits the Trust to
offer separate series of shares representing interests in separate portfolios of
securities. The shares in any one portfolio may be offered in separate classes.
With respect to the Fund, as of the date of this prospectus, the Trustees have
established two classes of shares known as Institutional Shares and
Institutional Service Shares. This prospectus relates only to Institutional
Service Shares of the Fund, which are designed primarily for financial
institutions as a convenient means of accumulating an interest in a
professionally managed, diversified portfolio investing primarily in short-term
municipal securities. The Fund may not be a suitable investment for retirement
plans since it invests in municipal securities. A minimum initial investment of
$25,000 is required.
Eligibility for investment in the Fund is contingent upon an investor
accumulating and maintaining a minimum aggregate investment of $200,000,000 in
Federated funds within a twelve-month period. For this purpose, 1) an investor
is defined as a financial institution or its collective customers, including
affiliate financial institutions and their collective customers, or other
institutions that are determined to qualify by Federated Securities Corp., and
2) Federated funds are those mutual funds which are distributed by Federated
Securities Corp., or are advised by or administered by investment advisers or
administrators affiliated with Federated Securities Corp. ("Federated Funds").
An investor's minimum investment will be calculated by combining all accounts
the investor maintains with the Federated Funds, which includes the Fund.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide dividend income exempt from
federal regular income tax consistent with stability of principal. This
investment objective cannot be changed without shareholder approval. While there
is no assurance that the Fund will achieve its investment objective, it
endeavors to do so by following the investment policies described in this
prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing in a portfolio of
municipal securities (as defined below) maturing in 13 months or less. As a
matter of investment policy, which cannot be changed without shareholder
approval, at least 80% of the Fund's annual interest income will be exempt from
federal regular income tax. (Federal regular income tax does not include the
federal individual alternative minimum tax or the federal alternative minimum
tax for corporations.) The average maturity of the securities in the Fund's
portfolio, computed on a dollar-weighted basis, will be 90 days or less. Unless
indicated otherwise, the investment policies may be changed by the Trustees
without
shareholder approval. Shareholders will be notified before any material change
in these policies becomes effective.
ACCEPTABLE INVESTMENTS. The Fund invests primarily in debt obligations issued by
or on behalf of states, territories, and possessions of the United States,
including the District of Columbia, and any political subdivision or financing
authority of any of these, the income from which is, in the opinion of qualified
legal counsel, exempt from federal regular income tax ("Municipal Securities").
Examples of Municipal Securities include, but are not limited to:
- tax and revenue anticipation notes ("TRANs") issued to finance working
capital needs in anticipation of receiving taxes or other revenues;
- bond anticipation notes ("BANs") that are intended to be refinanced
through a later issuance of longer-term bonds;
- municipal commercial paper and other short-term notes;
- variable rate demand notes;
- municipal bonds (including bonds having serial maturities and
pre-refunded bonds) and leases; and
- participation, trust, and partnership interests in any of the foregoing
obligations.
VARIABLE RATE DEMAND NOTES. Variable rate demand notes are long-term debt
instruments that have variable or floating interest rates and provide the Fund
with the right to tender the security for repurchase at its stated principal
amount plus accrued interest. Such securities typically bear interest at a rate
that is intended to cause the securities to trade at par. The interest rate may
float or be adjusted at regular intervals (ranging from daily to annually), and
is normally based on a published interest rate or interest rate index. Most
variable rate demand notes allow the Fund to demand the repurchase of the
security on not more than seven days prior notice. Other notes only permit the
Fund to tender the security at the time of each interest rate adjustment or at
other fixed intervals. See "Demand Features." The Fund treats variable rate
demand notes as maturing on the later of the date of the next interest rate
adjustment or the date on which the Fund may next tender the security for
repurchase.
PARTICIPATION INTERESTS. The Fund may purchase interests in Municipal Securities
from financial institutions such as commercial and investment banks, savings and
loan associations, and insurance companies. These interests may take the form of
participations, beneficial interests in a trust, partnership interests or any
other form of indirect ownership that allows the Fund to treat the income from
the investment as exempt from federal income tax. The Fund invests in these
participation interests in order to obtain credit enhancement or demand features
that would not be available through direct ownership of the underlying Municipal
Securities.
MUNICIPAL LEASES. Municipal leases are obligations issued by state and local
governments or authorities to finance the acquisition of equipment and
facilities. They may take the form of a lease, an installment purchase contract,
a conditional sales contract, or a participation interest in any of the above.
RATINGS. The securities in which the Fund invests must be rated in the highest
short-term rating category by one or more nationally recognized statistical
rating organizations ("NRSROs") or be of comparable quality to securities having
such ratings. An NRSRO's highest rating category is deter-
mined without regard for sub-categories and gradations. For example, securities
rated SP-1+ or SP-1 by Standard & Poor's Ratings Group ("S&P"), MIG-1 by Moody's
Investors Service, Inc. ("Moody's"), or FIN-1+ or FIN-1 by Fitch Investors
Service, Inc. ("Fitch") are all considered rated in the highest short-term
rating category. The Fund will follow applicable regulations in determining
whether a security rated by more than one NRSRO can be treated as being in the
highest short-term rating category; currently, such securities must be rated by
two NRSROs in their highest rating category. See "Regulatory Compliance."
Further, the Fund has the ability but no present intention of investing in:
securities that are rated MIG-2 or VMIG-2 by Moody's, SP-2 by S&P, FIN-2 by
Fitch; tax-exempt commercial paper that is rated P-2 by Moody's, A-2 by S&P, or
F-2 by Fitch; and securities that are not rated but are deemed to be of
comparable quality. Shareholders will be notified should the Fund decide to
invest in these securities.
CREDIT ENHANCEMENT. Certain of the Fund's acceptable investments may be credit
enhanced by a guaranty, letter of credit, or insurance. The Fund typically
evaluates the credit quality and ratings of credit-enhanced securities based
upon the financial condition and ratings of the party providing the credit
enhancement (the "credit enhancer"), rather than the issuer. However,
credit-enhanced securities will not be treated as having been issued by the
credit enhancer for diversification purposes, unless the Fund has invested more
than 10% of its assets in securities issued, guaranteed or otherwise credit
enhanced by the credit enhancer, in which case the securities will be treated as
having been issued by both the issuer and the credit enhancer. The bankruptcy,
receivership, or default of the credit enhancer will adversely affect the
quality and marketability of the underlying security.
DEMAND FEATURES. The Fund may acquire securities that are subject to puts and
standby commitments ("demand features") to purchase the securities at their
principal amount (usually with accrued interest) within a fixed period (usually
seven days) following a demand by the Fund. The demand feature may be issued by
the issuer of the underlying securities, a dealer in the securities, or by
another third party, and may not be transferred separately from the underlying
security. The Fund uses these arrangements to provide the Fund with liquidity
and not to protect against changes in the market value of the underlying
securities. The bankruptcy, receivership, or default by the issuer of the demand
feature, or a default on the underlying security or other event that terminates
the demand feature before its exercise, will adversely affect the liquidity of
the underlying security. Demand features that are exercisable even after a
payment default on the underlying security may be treated as a form of credit
enhancement.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase securities
on a when-issued or delayed delivery basis. These transactions are arrangements
in which the Fund purchases securities with payment and delivery scheduled for a
future time. The seller's failure to complete these transactions may cause the
Fund to miss a price or yield considered to be advantageous. Settlement dates
may be a month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices.
Accordingly, the Fund may pay more or less than the market value of the
securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the adviser deems it
appropriate to do so. In addition, the Fund may enter into transactions to sell
its purchase commitments to third parties at
current market values and simultaneously acquire other commitments to purchase
similar securities at later dates. The Fund may realize short-term profits or
losses upon the sale of such commitments.
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest in restricted
securities. Restricted securities are any securities in which the Fund may
invest pursuant to its investment objective and policies but which are subject
to restrictions on resale under federal securities laws. Under criteria
established by the Trustees, certain restricted securities are determined to be
liquid. To the extent that restricted securities are not determined to be
liquid, the Fund will limit their purchase, together with other illiquid
securities, to 10% of its total assets.
TEMPORARY INVESTMENTS. From time to time, when the investment adviser determines
that market conditions call for a temporary defensive posture, the Fund may
invest in tax-exempt or taxable securities such as: obligations issued by or on
behalf of municipal or corporate issuers having the same quality characteristics
as described above; obligations issued or guaranteed by the U.S. government, its
agencies, or instrumentalities; instruments issued by a U.S. branch of a
domestic bank or other deposit institution having capital, surplus, and
undivided profits in excess of $100,000,000 at the time of investment; and
repurchase agreements (arrangements in which the organization selling the Fund a
temporary investment agrees at the time of sale to repurchase it at a mutually
agreed upon time and price).
Although the Fund is permitted to make taxable, temporary investments, there is
no current intention to do so. However, the interest from certain Municipal
Securities is subject to the federal alternative minimum tax.
MUNICIPAL SECURITIES
Municipal Securities are generally issued to finance public works, such as
airports, bridges, highways, housing, hospitals, mass transportation projects,
schools, streets, and water and sewer works. They are also issued to repay
outstanding obligations, to raise funds for general operating expenses, and to
make loans to other public institutions and facilities.
Municipal Securities include industrial development bonds issued by or on behalf
of public authorities to provide financing aid to acquire sites or construct and
equip facilities for privately or publicly owned corporations. The availability
of this financing encourages these corporations to locate within the sponsoring
communities and thereby increases local employment.
The two principal classifications of Municipal Securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the payment of
principal and interest. Interest on and principal of revenue bonds, however, are
payable only from the revenue generated by the facility financed by the bond or
other specified sources of revenue. Revenue bonds do not represent a pledge of
credit or create any debt of or charge against the general revenues of a
municipality or public authority. Industrial development bonds are typically
classified as revenue bonds.
INVESTMENT RISKS
Yields on Municipal Securities depend on a variety of factors, including: the
general conditions of the short-term municipal note market and of the municipal
bond market; the size of the particular offering;
the maturity of the obligations; and the rating of the issue. The ability of the
Fund to achieve its investment objective also depends on the continuing ability
of the issuers of Municipal Securities and participation interests, or the
credit enhancers of either, to meet their obligations for the payment of
interest and principal when due. In addition, from time to time, the supply of
Municipal Securities acceptable for purchase by the Fund could become limited.
The Fund may invest in Municipal Securities which are repayable out of revenue
streams generated from economically related projects or facilities and/or whose
issuers are located in the same state. Sizable investments in these Municipal
Securities could involve an increased risk to the Fund should any of these
related projects or facilities experience financial difficulties.
Obligations of issuers of Municipal Securities are subject to the provisions of
bankruptcy, insolvency, and other laws affecting the rights and remedies of
creditors. In addition, the obligations of such issuers may become subject to
laws enacted in the future by Congress, state legislators, or referenda
extending the time for payment of principal and/or interest, or imposing other
constraints upon enforcement of such obligations or upon the ability of states
or municipalities to levy taxes. There is also the possibility that, as a result
of litigation or other conditions, the power or ability of any issuer to pay,
when due, the principal of and interest on its municipal securities may be
materially affected.
INVESTMENT LIMITATIONS
The Fund will not borrow money or pledge securities except, under certain
circumstances, the Fund may borrow up to one-third of the value of its total
assets and pledge assets to secure such borrowings. This investment limitation
cannot be changed without shareholder approval.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in this
prospectus and its Combined Statement of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940, as amended. In particular,
the Fund will comply with the various requirements of Rule 2a-7, which regulates
money market mutual funds. The Fund will determine the effective maturity of its
investments, as well as its ability to consider a security as having received
the requisite short-term ratings by NRSROs, according to Rule 2a-7. The Fund may
change these operational policies to reflect changes in the laws and regulations
without the approval of its shareholders.
TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees are
responsible for managing the Fund's business affairs and for exercising all the
Trust's powers except those reserved for the shareholders. An Executive
Committee of the Board of Trustees handles the Board's responsibilities between
meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the Trustees.
The adviser continually conducts investment research and supervision for the
Fund and is responsible for the purchase and sale of portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment advisory fee equal
to .20 of 1% of the Fund's average daily net assets. The adviser has
undertaken to reimburse the Fund up to the amount of the advisory fee for
operating expenses in excess of limitations established by certain states.
The adviser also may voluntarily choose to waive a portion of its fee or
reimburse other expenses of the Fund, but reserves the right to terminate
such waiver or reimbursement at any time at its sole discretion.
ADVISER'S BACKGROUND. Federated Management, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. With over $72 billion invested across
more than 260 funds under management and/or administration by its
subsidiaries, as of December 31, 1994, Federated Investors is one of the
largest mutual fund investment managers in the United States. With more
than 1,750 employees, Federated continues to be led by the management who
founded the company in 1955. Federated funds are presently at work in and
through 4,000 financial institutions nationwide. More than 100,000
investment professionals have selected Federated funds for their clients.
Both the Trust and the adviser have adopted strict codes of ethics governing the
conduct of all employees who manage the Fund and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Fund's
shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Trustees, and could
result in severe penalties.
DISTRIBUTION OF SHARES
Federated Securities Corp. is the principal distributor for Institutional
Service Shares of the Fund. It is a Pennsylvania corporation organized on
November 14, 1969, and is the principal distributor for a number of investment
companies. Federated Securities Corp. is a subsidiary of Federated Investors.
SHAREHOLDER SERVICES. The Fund has entered into a Shareholder Services Agreement
with Federated Shareholder Services, a subsidiary of Federated Investors, under
which the Fund may make payments up to .25 of 1% of the average daily net asset
value of the Institutional Service Shares, computed at an
annual rate, to obtain personal services for shareholders and provide
maintenance of shareholder accounts ("shareholder services"). From time to time
and for such periods as deemed appropriate, the amount stated above may be
reduced voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services will
either perform shareholder services directly or will select financial
institutions fees to perform shareholder services based upon shares owned by
their clients or customers. Financial institutions will receive fees based upon
shares owned by their clients or customers. The schedules of such fees and the
basis upon which such fees will be paid will be determined from time to time by
the Fund and Federated Shareholder Services.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, a subsidiary of
Federated Investors, provides administrative personnel and services (including
certain legal and financial reporting services) necessary to operate the Fund.
Federated Administrative Services provides these at an annual rate as specified
below:
<TABLE>
<CAPTION>
MAXIMUM FEE AVERAGE AGGREGATE DAILY NET ASSETS
- --------------------- -----------------------------------
<S> <C>
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares. Average
aggregate daily net assets include those of all mutual funds advised by
affiliates of Federated Investors. Federated Administrative Services may choose
voluntarily to waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company, Boston, MA, is custodian for the
securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Boston, MA, is transfer agent for the shares of, and dividend disbursing agent
for, the Fund. Federated Services Company is a subsidiary of Federated
Investors.
INDEPENDENT PUBLIC ACCOUNTANTS. The independent public accountants for the Fund
are Arthur Andersen LLP, Pittsburgh, PA.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund attempts to stabilize the net asset value of shares at $1.00 by valuing
the portfolio securities using the amortized cost method. The net asset value
per share is determined by subtracting liabilities attributable to shares from
the value of Fund assets attributable to shares, and dividing the remainder by
the number of shares outstanding. The Fund cannot guarantee that its net asset
value will always remain at $1.00 per share.
The net asset value is determined at 12:00 noon, 3:00 p.m. (Eastern time), and
as of the close of trading (normally 4:00 p.m., Eastern time) on the New York
Stock Exchange, Monday through Friday, except on New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares may
be purchased either by wire or mail. The Fund reserves the right to reject any
purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
BY WIRE. To purchase by Federal Reserve wire, call the Fund before 3:00 p.m.
(Eastern time) to place an order. The order is considered received immediately.
Payment by federal funds must be received before 3:00 p.m. (Eastern time) that
day. Federal funds should be wired as follows: Federated Services Company, c/o
State Street Bank and Trust Company, Boston, MA; Attention: EDGEWIRE; For Credit
to: Tax-Free Obligations Fund-Institutional Service Shares; Fund Number (this
number can be found on the account statement or by contacting the Fund); Group
Number or Order Number; Nominee or Institution Name; and ABA Number 011000028.
BY MAIL. To purchase by mail, send a check made payable to Tax-Free Obligations
Fund -- Institutional Service Shares to: Federated Services Company, Tax-Free
Obligations Fund, P.O. Box 8600, Boston, MA 02266-8600. Orders by mail are
considered received when payment by check is converted into federal funds. This
is normally the next business day after the check is received.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment is $25,000. Eligibility for investment in the
Fund is contingent upon an investor accumulating and maintaining a minimum
aggregate investment of $200,000,000 in Federated Funds within a twelve-month
period.
SUBACCOUNTING SERVICES
Financial institutions are encouraged to open single master accounts. However,
certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent charges a fee based on the level of subaccounting services
rendered. Financial institutions may charge or pass through subaccounting fees
as part of or in addition to normal trust or agency account fees. They may also
charge fees for other services provided which may be related to the ownership of
Fund shares. This prospectus should, therefore, be read together with any
agreement between the customer and the financial institution with regard to the
services provided, the fees charged for those services, and any restrictions and
limitations imposed.
State securities laws may require certain financial institutions such as
depository institutions to register as dealers.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases and
redemptions as well as dividends paid during the month.
DIVIDENDS
Dividends are declared daily and paid monthly. Dividends are automatically
reinvested on payment dates in additional shares of the Fund unless cash
payments are requested by writing to the Fund. Shares purchased by wire before
3:00 p.m. (Eastern time) begin earning dividends that day. Shares purchased by
check begin earning dividends the day after the check is converted into federal
funds.
CAPITAL GAINS
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund will distribute in cash or additional shares any realized
net long-term capital gains at least once every 12 months.
REDEEMING SHARES
- --------------------------------------------------------------------------------
Shares are redeemed at their net asset value next determined after Federated
Services Company receives the redemption request. Redemptions will be made on
days on which the Fund computes its net asset value. Redemption requests must be
received in proper form and can be made as described below.
BY MAIL
Shares may be redeemed by sending a written request to: Tax-Free Obligations
Fund, Federated Services Company, P.O. Box 8600, Boston, MA 02266-8600. The
written request should state: Tax-Free Obligations Fund -- Institutional Service
Shares; shareholder's name; the account number; and the share or dollar amount
requested. Sign the request exactly as the shares are registered. Shareholders
should call the Fund for assistance in redeeming by mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or overnight insured mail with the written request
to Federated Services Company, 500 Victory Road -- 2nd Floor, North Quincy, MA
02171.
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Fund, or a redemption payable other than to
the shareholder of record must have their signatures guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund which is administered by the Federal Deposit Insurance
Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchanges;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund, which is administered by the
FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and the transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of the
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
TELEPHONE REDEMPTION
Shares may be redeemed by telephoning the Fund. Telephone instructions may be
recorded and if reasonable procedures are not followed by the Fund, it may be
liable for losses due to unauthorized or fraudulent telephone instructions. An
authorization form permitting the Fund to accept telephone requests must first
be completed. Authorization forms and information on this service are available
from Federated Securities Corp.
If the redemption request is received before 3:00 p.m. (Eastern time), the
proceeds will be wired the same day to the shareholder's account at a domestic
commercial bank which is a member of the Federal Reserve System, and those
shares redeemed will not be entitled to that day's dividend. A daily dividend
will be paid on shares redeemed if the redemption request is received after 3:00
p.m. (Eastern time). However, the proceeds are not wired until the following
business day.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "By Mail", should be considered. If at any time
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000, or the
aggregate investment in Federated Funds falls below the required minimum of
$200,000,000 to be maintained from and after twelve months from account opening,
due to shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights, except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder approval will be
sought only for certain changes in the Trust's or the Fund's operation and for
the election of Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders for this purpose shall be called by the
Trustees upon the written request of shareholders owning at least 10% of the
outstanding shares of the Trust.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust. These documents require notice of this disclaimer to be given in each
agreement, obligation, or instrument the Trust or its Trustees enter into or
sign.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by the Fund.
Shareholders are not required to pay the federal regular income tax on any
dividends received from the Fund that represent net interest on tax-exempt
municipal bonds. However, under the Tax Reform Act
of 1986, dividends representing net interest earned on certain "private
activity" bonds issued after August 7, 1986, may be included in calculating the
federal individual alternative minimum tax or the federal alternative minimum
tax for corporations. The Fund may purchase all types of municipal bonds,
including private activity bonds.
The alternative minimum tax applies when it exceeds the regular tax for the
taxable year. Alternative minimum taxable income is equal to the regular taxable
income of the taxpayer increased by certain "tax preference" items not included
in regular taxable income and reduced by only a portion of the deductions
allowed in the calculation of the regular tax.
Dividends of the Fund representing net interest income earned on some temporary
investments and any realized net short-term gains are taxed as ordinary income.
These tax consequences apply whether dividends are received in cash or as
additional shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES
In the opinion of Houston, Houston, & Donnelly, counsel to the Trust, Fund
shares may be subject to personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania to the extent that the
portfolio securities in the Fund would be subject to such taxes if owned
directly by residents of those jurisdictions.
OTHER STATE AND LOCAL TAXES. Because interest received by the Fund may not be
exempt from all state and local income taxes, shareholders may be required to
pay state and local taxes on dividends received from the Fund. Shareholders are
urged to consult their own tax advisers regarding the status of their accounts
under state and local tax laws.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
The Fund also offers another class of shares called Institutional Shares.
Institutional Shares are sold at net asset value primarily to accounts for which
financial institutions act in an agency or fiduciary capacity and are subject to
a minimum initial investment of $25,000.
All classes are subject to certain of the same expenses.
Institutional Shares are distributed with no 12b-1 fees. Currently,
Institutional Shares are accruing no shareholder services fees.
Expense differences between classes may affect the performance of each class.
To obtain more information and a prospectus for any other class, investors may
call 1-800-235-4669.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time, the Fund advertises its yield, effective yield, and
tax-equivalent yield for shares. The performance figures will be calculated
separately for each class of shares.
Yield represents the annualized rate of income earned on an investment over a
seven-day period. It is the annualized dividends earned during the period on an
investment shown as a percentage of the investment. The effective yield is
calculated similarly to the yield, but when annualized, the income earned by an
investment is assumed to be reinvested daily. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment. The tax-equivalent yield is calculated similarly to the yield, but
is adjusted to reflect the taxable yield that would have to be earned to equal
the tax-exempt yield, assuming a specific tax rate.
Advertisements and sales literature may also refer to total return. Total return
represents the change, over a specified period of time, in the value of an
investment in the shares after reinvesting all income distributions. It is
calculated by dividing that change by the initial investment and is expressed as
a percentage.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
TAX-FREE OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ----------- ------------------------------------------------------ ------- --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--100.4%
- ----------------------------------------------------------------------
ALABAMA--2.8%
------------------------------------------------------
$ 9,010,000 Alabama Special Care Facilities Finance Authority
Weekly VRDNs (Providence Hospital)/(Daughters of
Charity GTD) VMIG1 $ 9,010,000
------------------------------------------------------
2,000,000 Birmingham, AL IDA, Revenue Refunding Bonds Weekly
VRDNs (S.P. Hotel Company)/(Amsouth Bank N.A.,
Birmingham LOC) VMIG1 2,000,000
------------------------------------------------------
3,140,000 Birmingham, AL Special Care Facilities Financing
Authority, Capital Improvement Revenue Bonds (Series
1995) Weekly VRDNs (Methodist Home for the Aging,
AL)/(SouthTrust Bank of Alabama, Birmingham LOC) P-1 3,140,000
------------------------------------------------------
2,850,000 Birmingham, AL, GO (Series 1995-A), 5.625% BANs,
1/5/1996 NR(2) 2,852,538
------------------------------------------------------
4,600,000 Birmingham, AL, GO (Series 1992-A) Weekly VRDNs (First
Alabama Bank, Birmingham LOC) A-1+ 4,600,000
------------------------------------------------------
1,000,000 Bon Air, AL IDB Weekly VRDNs (Avondale Mills, Inc.)/
(Trust Company Bank, Atlanta LOC) A-1+ 1,000,000
------------------------------------------------------
3,000,000 Homewood, AL IDA Weekly VRDNs (Mountain Brook Inn
(Homewood AL))/(SouthTrust Bank of Alabama, Birmingham
LOC) P-1 3,000,000
------------------------------------------------------
8,500,000 Huntsville, AL Health Care Authority/Health Care
Facilities (Series 1994-A) Weekly VRDNs (MBIA
INS)/(Amsouth Bank N.A., Birmingham LIQ) A-1 8,500,000
------------------------------------------------------
1,700,000 Huntsville, AL Health Care Authority/Health Care
Facilities, Health Care Facilities Revenue Bonds
(Series 1994-B) Weekly VRDNs (MBIA INS)/(Amsouth Bank
N.A., Birmingham LIQ) A-1 1,700,000
------------------------------------------------------
300,000 Huntsville, AL IDA Weekly VRDNs (Parkway Project
(Huntsville, AL))/(First Alabama Bank, Birmingham LOC) A-1+ 300,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
ALABAMA--CONTINUED
------------------------------------------------------
$ 1,500,000 Marshall County, AL, Special Obligation School
Refunding Warrant (Series 1994) Weekly VRDNs (Marshall
County, AL Board of Education)/
(First Alabama Bank, Birmingham LOC) A-1+ $ 1,500,000
------------------------------------------------------
3,000,000 Mobile, AL IDB, PCR (Series 1993-B) Weekly VRDNs
(Alabama Power Co.) A-1 3,000,000
------------------------------------------------------
995,000 Tuscaloosa County, AL Port Authority (Series 1989-A)
Weekly VRDNs (Capstone Hotel Ltd.)/(SouthTrust Bank of
Alabama, Birmingham LOC) P-1 995,000
------------------------------------------------------
1,630,000 Tuscaloosa, AL IDB, Revenue Refunding Bonds (Series
1994) Weekly VRDNs (Harco, Inc.)/
(Amsouth Bank N.A., Birmingham LOC) P-1 1,630,000
------------------------------------------------------ --------------
Total 43,227,538
------------------------------------------------------ --------------
ARIZONA--1.9%
------------------------------------------------------
15,000,000 Apache County, AZ IDA (Series 1983-A) Weekly VRDNs
(Tucson Electric Power Co.)/(Barclays Bank PLC,
London LOC) A-1+ 15,000,000
------------------------------------------------------
4,000,000 Arizona Health Facilities Authority, Variable Rate
Demand Bond Weekly VRDNs (University Physicians,
Inc.)/
(Bank One, Arizona N.A. LOC) P-1 4,000,000
------------------------------------------------------
4,400,000 Maricopa County, AZ (Series 1994-F) Daily VRDNs
(Arizona Public Service Corp.)/(Bank of America NT
and SA, San Francisco LOC) A-1 4,400,000
------------------------------------------------------
6,000,000 Pima County, AZ IDA, Floating Rate Notes (Series A)
Weekly VRDNs (Tucson Electric Power Co.)/
(Barclays Bank PLC, London LOC) P-1 6,000,000
------------------------------------------------------ --------------
Total 29,400,000
------------------------------------------------------ --------------
ARKANSAS--0.1%
------------------------------------------------------
1,000,000 Sheridan, AR IDA Weekly VRDNs (H.H. Robertson Co.)/
(PNC Bank, N.A. LOC) VMIG1 1,000,000
------------------------------------------------------ --------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
CALIFORNIA--16.6%
------------------------------------------------------
$27,350,000 California School Cash Reserve Program Authority,
(Series 1995-A), 4.75% TRANs (MBIA Insured), 7/3/1996 SP-1+ $ 27,577,341
------------------------------------------------------
35,000,000 California State, Revenue Anticipation Warrants
(Series C), 5.75% RANs (Bank of America NT and SA, San
Francisco, Bank of Nova Scotia, Toronto, Banque
Nationale de Paris, Canadian Imperial Bank of
Commerce, Toronto, Chemical Bank, New York, Citibank,
N.A., Credit Suisse, Zurich, Morgan Guaranty Trust
Co., New York, National Westminster Bank, PLC, London,
Societe Generale North America, Inc., Sumitomo Bank
Ltd., Osaka, Swiss Bank Corp., Westdeusche Landesbank
Girozentrale & Toronto Dominion Bank LOCs) SP-1 35,274,544
------------------------------------------------------
16,100,000 California State, Revenue Anticipation Warrants
(Series C), 5.75% RANs (FGIC INS), 4/25/1996 SP-1 16,355,231
------------------------------------------------------
40,350,000 California Student Loan, Revenue Bonds (Series A)
Weekly VRDNs (Student Loan Marketing
Association LOC) P-1 40,350,000
------------------------------------------------------
10,000,000 Clipper CAL Tax-Exempt Trust, (94-2) Weekly VRDNs
(California State)/(State Street Bank and Trust Co.
LIQ)/(Bank of America NT and SA, San Francisco, Bank
of Nova Scotia, Toronto, Banque Nationale de Paris,
Canadian Imperial Bank of Commerce, Toronto, Chemical
Bank, Citibank N.A. and Credit Suisse LOCs) VMIG1 10,000,000
------------------------------------------------------
12,995,000 Kern County, CA Board of Education, 4.50% TRANs,
6/28/1996 SP-1+ 13,057,372
------------------------------------------------------
10,000,000 Los Angeles County, CA Unified School District, 4.50%
TRANs, 7/3/1996 SP-1+ 10,071,011
------------------------------------------------------
41,000,000 Los Angeles County, CA, 4.50% TRANs (Bank of America
NT and SA, San Francisco, Credit Suisse, Zurich,
Morgan Guaranty Trust Co., New York, Swiss Bank Corp.,
New York, NY, Union Bank of Switzerland, Zurich and
Westdeutsche Landesbank Girozentrale LOCs), 7/1/1996 SP-1 41,266,907
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
CALIFORNIA--CONTINUED
------------------------------------------------------
$23,500,000 Los Angeles, CA Wastewater System, Tender Option
Certificates (Series 1995-H) Weekly VRDNs (MBIA INS)/
(Swiss Bank Corp., New York, NY LIQ) A-1+ $ 23,500,000
------------------------------------------------------
10,000,000 Orange County, CA IDA, (Series 1991-A) Weekly VRDNs
(The Lakes)/(Citibank, N.A. LOC) A-1 10,000,000
------------------------------------------------------
6,000,000 Orange County, CA Local Transportation Authority,
Sales Tax Revenue Notes, 4.00% CP (Industrial Bank of
Japan Ltd., Tokyo LOC), Mandatory Tender 9/13/1995 A-1 6,000,000
------------------------------------------------------
5,000,000 San Francisco, CA Unified School District (Series
1994), 4.75% TRANs, 8/24/1995 SP-1+ 5,001,722
------------------------------------------------------
7,000,000 Temecula Valley Unified School District, CA, 4.50%
TRANs, 7/5/1996 SP-1+ 7,031,142
------------------------------------------------------
10,800,000 Ventura County, CA Community College District, 4.50%
TRANs, 6/28/1996 SP-1+ 10,851,836
------------------------------------------------------ --------------
Total 256,337,106
------------------------------------------------------ --------------
COLORADO--1.8%
------------------------------------------------------
25,000,000 Arapahoe County, CO Improvement Authority, (Series G),
4.45% TOBs (Swiss Bank Corp., New York, NY LOC),
Optional Tender 8/31/1995 SP-1+ 25,000,000
------------------------------------------------------
2,625,000 Denver (City & County), CO, 5.20% TOBs (Blake Street
Compendium)/(Norwest Bank Minnesota, Minneapolis LOC),
Optional Tender 12/15/1995 A-1+ 2,625,000
------------------------------------------------------ --------------
Total 27,625,000
------------------------------------------------------ --------------
CONNECTICUT--2.6%
------------------------------------------------------
39,780,000 Connecticut State Transportation Infrastructure
Authority Weekly VRDNs (Connecticut State)/(Industrial
Bank of Japan Ltd., Tokyo LOC) A-1 39,780,000
------------------------------------------------------ --------------
DELAWARE--0.3%
------------------------------------------------------
5,100,000 Delaware Health Facilities Authority, (Series
1985-BTP-19A) Weekly VRDNs (Medical Center of
Delaware)/(MBIA INS)/(Bankers Trust Co., New York LIQ) NR(1) 5,100,000
------------------------------------------------------ --------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
FLORIDA--13.7%
------------------------------------------------------
$ 3,000,000 Alachua County, FL Health Facilities Authority, Health
Facility Revenue Bonds (Series 1991) Weekly VRDNs
(North Florida Retirement Village)/(Kredietbank N.V.,
Brussels LOC) A-1 $ 3,000,000
------------------------------------------------------
3,000,000 Broward County, FL Health Facility Authority, Revenue
Bonds Weekly VRDNs (John Knox Village of Florida)/
(First Union National Bank, Charlotte, N.C. LOC) P-1 3,000,000
------------------------------------------------------
4,470,000 Dade County, FL IDA Weekly VRDNs
(Futernick Associates, Inc.)/(First Union National
Bank,
Charlotte, N.C. LOC) P-1 4,470,000
------------------------------------------------------
1,200,000 Dade County, FL IDA, Industrial Development Revenue
Refunding Bonds Weekly VRDNs (Continental Farms,
Inc.)/(Nationsbank of North Carolina N.A. LOC) P-1 1,200,000
------------------------------------------------------
2,000,000 Dade County, FL Water & Sewer System Weekly VRDNs
(FGIC INS)/(Industrial Bank of Japan Ltd., Tokyo LIQ) A-1 2,000,000
------------------------------------------------------
12,490,000 Florida HFA Weekly VRDNs (Cornerstone)/
(PNC Bank, N.A. LOC) A-1 12,490,000
------------------------------------------------------
1,400,000 Florida HFA, Multi-Family Housing Revenue Refunding
Bonds (Series 1985-D) Weekly VRDNs (Park Colony
Project, FL)/(Mellon Bank NA, Pittsburgh LOC) A-1 1,400,000
------------------------------------------------------
3,285,000 Florida State Board of Education Administration,
(CR49)/(Series 1989-A), 4.00% TOBs (Citibank, N.A.
LIQ), Optional Tender 12/1/1995 NR(2) 3,285,000
------------------------------------------------------
4,235,000 Florida State Board of Education Administration,
(CR49D), 4.00% TOBs (Citibank, N.A. LIQ),
Optional Tender 12/1/1995 NR(2) 4,235,000
------------------------------------------------------
1,210,000 Florida State Board of Education Administration,
(CR55), (Series 1989-A), 4.00% TOBs (Citibank, N.A.
LIQ), Optional Tender 12/1/1995 NR(2) 1,210,000
------------------------------------------------------
17,975,000 Hillsborough County, FL IDA, PCR Refunding Bonds
(Series 1994) Weekly VRDNs (Tampa Electric
Company)/(MBIA INS) NR(2) 17,975,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
FLORIDA--CONTINUED
------------------------------------------------------
$22,000,000 Jacksonville Electric Authority, FL, Tender Option
Certificates (Series 1995-C) Weekly VRDNs (Bayerische
Hypotheken-Und Wechsel-Bank Ag LOC) A-1+ $ 22,000,000
------------------------------------------------------
9,200,000 Jacksonville, FL PCR, (Series 1994), 4.10% CP (Florida
Power & Light Co.), Mandatory Tender 12/14/1995 VMIG1 9,200,000
------------------------------------------------------
6,100,000 Jacksonville, FL, Hospital Revenue Bonds (Series 1989)
Weekly VRDNs (Baptist Medical Center, AL)/
(First Union National Bank, Charlotte, N.C. LOC) VMIG1 6,100,000
------------------------------------------------------
4,200,000 Key West, FL Community Redevelopment Authority Weekly
VRDNs (Pier House Joint Venture)/
(PNC Bank, N.A. LOC) P-1 4,200,000
------------------------------------------------------
4,000,000 Lake Shore, FL Hospital Authority, Health Facilities
Revenue Bonds (Series 1991) Weekly VRDNs
(Lake Shore Hospital)/(Kredietbank N.V., Brussels LOC) P-1 4,000,000
------------------------------------------------------
2,925,000 Lee County, FL IDA, Health Care Facilities Revenue
Bonds Weekly VRDNs (Hope Hospice Project)/
(Sun Bank N.A., Orlando LOC) VMIG1 2,925,000
------------------------------------------------------
5,000,000 Lee County, FL, (PA-104) Weekly VRDNs (MBIA INS)/
(Merrill Lynch Capital Services, Inc. LIQ) VMIG1 5,000,000
------------------------------------------------------
5,410,000 Manatee County, FL HFA Weekly VRDNs
(Carriage Club)/(Mellon Bank N.A., Pittsburgh LOC) VMIG1 5,410,000
------------------------------------------------------
1,900,000 Manatee County, FL HFA, Multi-Family Mortgage Revenue
Refunding Bonds (Series 1989-A) Weekly VRDNs
(Hampton/McGuire L.P.)/(Nationsbank of
North Carolina N.A. LOC) A-1 1,900,000
------------------------------------------------------
6,230,000 Orange County, FL HFA, Multifamily Housing Revenue
Bonds Weekly VRDNs (Sutton Place. Ltd. Project)/
(Nationsbank of Maryland, N.A. LOC) A-1+ 6,230,000
------------------------------------------------------
1,715,000 Palm Beach County, FL IDA Weekly VRDNs
(Palm Beach Jewish Community Campus)/
(Sun Bank N.A., Orlando LOC) A-1+ 1,715,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
FLORIDA--CONTINUED
------------------------------------------------------
$ 5,500,000 Pinellas County, FL Health Facility Authority Daily
VRDNs (Chemical Bank, New York LOC) A-1 $ 5,500,000
------------------------------------------------------
10,870,000 Pinellas County, FL Health Facility Authority, (Series
1987) Weekly VRDNs (St. Mark Village
Project)/(Nationsbank of Florida, N.A. LOC) A-1 10,870,000
------------------------------------------------------
1,000,000 Pinellas County, FL Health Facility Authority, Multi-
Family Mortage Revenue Refunding Bonds (Series 1989-A)
Weekly VRDNs (McGregor Place Project)/(Nationsbank of
North Carolina N.A. LOC) A-1 1,000,000
------------------------------------------------------
4,325,000 Polk County, FL IDA, PCR Refunding Bonds Weekly VRDNs
(IMC Fertilizer, Inc. Project)/(Rabobank Nederland,
Utrecht LOC) P-1 4,325,000
------------------------------------------------------
9,300,000 Sarasota County, FL Public Hospital District, 4.15% CP
(Sarasota Memorial Hospital), Mandatory Tender
8/23/1995 A-1 9,300,000
------------------------------------------------------
9,100,000 Sarasota County, FL Public Hospital District, 4.15% CP
(Sarasota Memorial Hospital), Mandatory Tender
8/29/1995 A-1 9,100,000
------------------------------------------------------
1,800,000 Seminole County, FL Health Facility Authority IDA,
(Series 1991) Weekly VRDNs (Florida Living Nursing
Center)/(Barnett Bank of Central Florida, Orlando LOC) VMIG1 1,800,000
------------------------------------------------------
10,900,000 Southeast Volusia Hospital District, Revenue Bonds
(Series 1995) Weekly VRDNs (Bert Fish Medical Center,
FL)/(SouthTrust Bank of Alabama, Birmingham LOC) A-1 10,900,000
------------------------------------------------------
7,000,000 St. Lucie County, FL, IDR Bonds (Series 1985) Weekly
VRDNs (Savannahs Hospital)/(Nationsbank of Georgia,
N.A. LOC) P-1 7,000,000
------------------------------------------------------
4,800,000 Sunshine State Governmental Finance Commission, FL,
3.90% CP (Morgan Guaranty Trust Co., New York,
National Westminster Bank, PLC, London and Union Bank
of Switzerland, Zurich LOCs), Mandatory Tender
10/27/1995 VMIG1 4,800,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
FLORIDA--CONTINUED
------------------------------------------------------
$ 9,750,000 Suwannee County, FL, (Series 1989) Weekly VRDNs
(Advent Christian Village Project)/(Barnett Bank of
Jacksonville LOC) VMIG1 $ 9,750,000
------------------------------------------------------
6,400,000 Titusville, FL, Multi-Purpose Revenue Bonds,
Installment 1995A Weekly VRDNs (Banque Paribas, Paris
LOC) VMIG1 6,400,000
------------------------------------------------------
6,065,000 Volusia County, FL HFA Weekly VRDNs (Fisherman's
Landing)/(Mellon Bank N.A., Pittsburgh LOC) P-1 6,065,000
------------------------------------------------------
1,675,000 Volusia County, FL IDA Weekly VRDNs (Crane Cams)/
(First Interstate Bank of Arizona, N.A. LOC) P-1 1,675,000
------------------------------------------------------ --------------
Total 211,430,000
------------------------------------------------------ --------------
GEORGIA--1.5%
------------------------------------------------------
4,000,000 Atlanta, GA, Urban Residential Finance Authority,
Residential Construction Revenue Bonds, Summerhill
Neighborhood Bond Program (Series 1995) Weekly VRDNs
(First Union National Bank, Charlotte, N.C. LOC) A-1 4,000,000
------------------------------------------------------
1,500,000 Coweta County, GA IDA Daily VRDNs (Eckerds
Warehouse)/(Union Bank of Switzerland, Zurich LOC) A-1 1,500,000
------------------------------------------------------
1,600,000 DeKalb County, GA, (Series 1992) Weekly VRDNs
(American Cancer Society, GA)/(Trust Company Bank,
Atlanta LOC) P-1 1,600,000
------------------------------------------------------
3,395,000 Georgia State, HFA, Single Family Mortgage Revenue,
3.90% TOBs (Citibank, N.A. LIQ), Optional Tender
9/1/1995 NR(2) 3,395,000
------------------------------------------------------
12,000,000 Municipal Electric Authority of Georgia, (Series B),
4.25% TOBs, Optional Tender 6/1/1996 VMIG1 12,014,500
------------------------------------------------------
1,000,000 Rockdale County, GA Hospital Authority, Revenue
Anticipation Certificates (Series 1994) Weekly VRDNs
(Trust Company Bank, Atlanta LOC) VMIG1 1,000,000
------------------------------------------------------ --------------
Total 23,509,500
------------------------------------------------------ --------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
HAWAII--0.4%
------------------------------------------------------
$ 6,400,000 Hawaii State, Puttable Tax Exempt Receipts (Series 31)
Weekly VRDNs (Morgan Guaranty Trust Co.,
New York LIQ) VMIG1 $ 6,400,000
------------------------------------------------------ --------------
ILLINOIS--8.1%
------------------------------------------------------
13,000,000 Chicago O'Hare International Airport, Second Lien
Revenue Bonds, (Series 1984-B), 3.80% TOBs (Westpac
Banking, Corp., Sydney LOC), Optional Tender 1/1/1996 A-1 13,000,000
------------------------------------------------------
3,000,000 Illinois Development Finance Authority Weekly VRDNs
(Newlywed Food)/(Mellon Bank N.A., Pittsburgh LOC) A-1 3,000,000
------------------------------------------------------
5,000,000 Illinois Development Finance Authority, (Series
1993-A) Weekly VRDNs (Loyola Academy)/(Northern Trust
Co., Chicago, IL LOC) A-1+ 5,000,000
------------------------------------------------------
3,000,000 Illinois Educational Facilities Authority (Series
1992) Weekly VRDNs (Depaul University)/(Sanwa Bank
Ltd, Osaka LOC) VMIG1 3,000,000
------------------------------------------------------
7,500,000 Illinois Educational Facilities Authority, 4.25% CP
(Field Museum of Natural History)/(Sanwa Bank Ltd,
Osaka LOC), Mandatory Tender 9/7/1995 VMIG1 7,500,000
------------------------------------------------------
11,500,000 Illinois Educational Facilities Authority, Adjustable
Demand Revenue Bonds (Series 1995) Weekly VRDNs
(Ravinia Festival Association, IL)/(NBD Bank, N.A.,
Detroit, MI LOC) A-1+ 11,500,000
------------------------------------------------------
5,000,000 Illinois Health Facilities Authority Weekly VRDNs
(OSF Health Care Systems) VMIG1 5,000,000
------------------------------------------------------
14,000,000 Illinois Health Facilities Authority (Series 1989A)
Weekly VRDNs (Methodist Health Services Corp.)/
(Fuji Bank, Ltd., Tokyo LOC) A-1 14,000,000
------------------------------------------------------
14,940,000 Illinois Health Facilities Authority, 4.00% CP (Rush-
Presbyterian St. Luke's Medical)/(Northern Trust Co.,
Chicago, IL LIQ), Mandatory Tender 10/19/1995 A-1+ 14,940,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
ILLINOIS--CONTINUED
------------------------------------------------------
$35,000,000 Illinois Health Facilities Authority (Series 1985-B)
Weekly VRDNs (OSF Health Care Systems)/
(Bank of America Illinois LIQ) VMIG1 $ 35,000,000
------------------------------------------------------
13,900,000 Illinois State Toll Highway Authority,
(Series 1993-B) Weekly VRDNs (MBIA INS)/
(Societe Generale, Paris LIQ) VMIG1 13,900,000
------------------------------------------------------ --------------
Total 125,840,000
------------------------------------------------------ --------------
INDIANA--1.3%
------------------------------------------------------
1,115,000 Dale, IN IDA Weekly VRDNs (Spencer Industries)/
(National City Bank, Kentucky LOC) P-1 1,115,000
------------------------------------------------------
17,000,000 Indiana Bond Bank, Advance Funding Program Notes
(Series 1995-A3) VRNs, 1/10/1996 SP-1+ 17,000,000
------------------------------------------------------
2,445,000 Indiana Health Facilities Finance Authority
Rehabilitation Center Weekly VRDNs (Crossroads
Rehabilitation Center)/(Bank One, Indianapolis, IN
LOC) A-1 2,445,000
------------------------------------------------------ --------------
Total 20,560,000
------------------------------------------------------ --------------
KENTUCKY--0.1%
------------------------------------------------------
1,530,000 Boone County, KY, Adjustable Rate Revenue Refunding
Bonds Weekly VRDNs (Spring Meadow Associates)/
(Huntington National Bank, Columbus, OH LOC) P-1 1,530,000
------------------------------------------------------ --------------
LOUISIANA--1.9%
------------------------------------------------------
10,000,000 Louisiana PFA, 3.80% CP (Our Lady of Lake)/(FSA INS),
Mandatory Tender 8/21/1995 A-1 10,000,000
------------------------------------------------------
9,865,000 Louisiana PFA, Advance Funding Notes (Series 1994-B),
4.60% TANs (Orleans Parish, LA School Board),
8/31/1995 SP-1+ 9,868,120
------------------------------------------------------
9,130,000 St. James Parish, LA, PCR Refunding Bonds (Series
1988-B), 4.20% CP (Texaco, Inc.), Mandatory Tender
8/8/1995 A-1 9,130,000
------------------------------------------------------ --------------
Total 28,998,120
------------------------------------------------------ --------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
MARYLAND--3.6%
------------------------------------------------------
$24,200,000 Maryland Health & Higher Educational Facilities
Authority (Series 1985-B) Weekly VRDNs
(First National Bank of Chicago LOC) VMIG1 $ 24,200,000
------------------------------------------------------
4,000,000 Maryland Health & Higher Educational Facilities
Authority, Revenue Bonds (Series 1985-A) Weekly VRDNs
(Dai-Ichi Kangyo Bank Ltd., Tokyo LOC) VMIG1 4,000,000
------------------------------------------------------
10,110,000 Maryland State Community Development Administration
(Series 1987-2), 4.35% TOBs (First National Bank of
Chicago LIQ), Optional Tender 10/1/1995 NR(3) 10,110,000
------------------------------------------------------
300,000 Maryland State IDFA Kelly Springfield Tire, Economic
Development Revenue Refunding Bonds (Series 1994)
Weekly VRDNs (Johnson Controls, Inc.) VMIG1 300,000
------------------------------------------------------
2,000,000 Montgomery County, MD EDA Weekly VRDNs
(Howard Hughes Medical Center) A-1+ 2,000,000
------------------------------------------------------
9,300,000 Montgomery County, MD EDA Weekly VRDNs
(U.S. Pharmacopeial Convention Facility)/
(Chemical Bank, New York LOC) VMIG1 9,300,000
------------------------------------------------------
6,000,000 Montgomery County, MD Housing Opportunities
Commission, Single Family Mortgage Revenue Bonds
(Series 1994-C), 4.35% TOBs, Optional Tender
10/25/1995 VMIG1 6,000,000
------------------------------------------------------ --------------
Total 55,910,000
------------------------------------------------------ --------------
MASSACHUSETTS--0.9%
------------------------------------------------------
13,300,000 Massachusetts HEFA (Series I) Weekly VRDNs
(Harvard University) A-1+ 13,300,000
------------------------------------------------------ --------------
MICHIGAN--1.3%
------------------------------------------------------
4,350,000 Dearborn, MI Economic Development Corp. (Series 1991)
Weekly VRDNs (Oakbrook Common Project)/
(Mellon Bank N.A., Pittsburgh LOC) A-1 4,350,000
------------------------------------------------------
2,000,000 Michigan Municipal Bond Authority, 4.50% RANs,
7/3/1996 SP-1+ 2,012,412
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
MICHIGAN--CONTINUED
------------------------------------------------------
$ 1,700,000 Michigan State Hospital Finance Authority, Hospital
Equipment Loan Program Bonds (Series A) Weekly VRDNs
(First of America Bank Corp. LOC) VMIG1 $ 1,700,000
------------------------------------------------------
9,500,000 Michigan State, GO Notes, 5.00% TRANs, 9/29/1995 SP-1+ 9,511,856
------------------------------------------------------
2,695,000 Ottawa County, MI Economic Development Corp., Limited
Obligation Revenue Bonds (Series 1995-B) Weekly VRDNs
(Sunset Manor, Inc. Project)/
(Old Kent Bank & Trust Co., Grand Rapids LOC) A-1 2,695,000
------------------------------------------------------ --------------
Total 20,269,268
------------------------------------------------------ --------------
MINNESOTA--3.4%
------------------------------------------------------
2,065,000 Dakota County, MN Housing & Redevelopment Authority,
Multifamily Rental Housing Revenue Bonds (Series
1994-B) Weekly VRDNs (Westwood Ridge Senior Residence
Project)/(First Bank N.A., Minneapolis LOC) A-1 2,065,000
------------------------------------------------------
5,040,000 Minneapolis CDA, Revenue Refunding Bonds (Series 1995)
Weekly VRDNs (Walker Methodist Health Center, Inc.
Project)/(First Bank N.A., Minneapolis LOC) A+ 5,040,000
------------------------------------------------------
10,000,000 Minneapolis, MN (Series 1993) Weekly VRDNs
(Market Square Real Estate, Inc.)/(Norwest Bank
Minnesota, Minneapolis LOC) A-1+ 10,000,000
------------------------------------------------------
4,105,000 Minnesota State HFA, Single Family Mortgage Bonds
(Series 1993-T), 4.85% TOBs (Bayerische Landesbank
Girozentrale LOC), Mandatory Tender 12/14/1995 A-1+ 4,105,000
------------------------------------------------------
7,400,000 Minnesota State Higher Education Coordinating Board,
Supplemental Student Loan Program Variable Rate
Refunding Revenue Bonds (Series 1994-A) Weekly VRDNs
(Norwest Bank Minnesota, Minneapolis LIQ) VMIG1 7,400,000
------------------------------------------------------
19,500,000 Rochester, MN Health Care Facility Authority Weekly
VRDNs (Mayo Foundation) VMIG1 19,500,000
------------------------------------------------------
800,000 St. Paul, MN Port Authority (Series 1991) Weekly VRDNs
(West Gate Office)/(First Bank N.A., Minneapolis LOC) A-1 800,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
MINNESOTA--CONTINUED
------------------------------------------------------
$ 4,200,000 University of Minnesota (Series G), 4.50% TOBs
(Regents of University of Minnesota), Optional Tender
8/1/1995 VMIG1 $ 4,200,000
------------------------------------------------------ --------------
Total 53,110,000
------------------------------------------------------ --------------
MISSISSIPPI--1.2%
------------------------------------------------------
1,770,000 Hinds County, MS (Series 1991) Weekly VRDNs (North
State St. Project)/(Amsouth Bank N.A., Birmingham LOC) VMIG1 1,770,000
------------------------------------------------------
16,600,000 Jackson County, MS Port Facility Daily VRDNs
(Chevron U.S.A., Inc.) P-1 16,600,000
------------------------------------------------------ --------------
Total 18,370,000
------------------------------------------------------ --------------
MISSOURI--0.3%
------------------------------------------------------
4,200,000 Poplar Bluff, MO IDA (Series 1987) Weekly VRDNs (Gates
Rubber Co.)/(NBD Bank, N.A., Detroit, MI LOC) A-1+ 4,200,000
------------------------------------------------------ --------------
NEW JERSEY--1.1%
------------------------------------------------------
11,600,000 Essex County, NJ, (Series 1995-B), 5.00% TANs
(Chemical Bank, New York LOC), 8/22/1995 MIG1 11,605,114
------------------------------------------------------
5,000,000 Mercer County, NJ, 5.50% BANs, 9/20/1995 NR(2) 5,003,952
------------------------------------------------------ --------------
Total 16,609,066
------------------------------------------------------ --------------
NEW YORK--8.9%
------------------------------------------------------
16,600,000 New York City Municipal Water Finance Authority, Water
and Sewer System Revenue Bonds (Series 1995-A) Daily
VRDNs (FGIC INS)/(FGIC Securities Purchase, Inc. LIQ) A-1+ 16,600,000
------------------------------------------------------
29,800,000 New York Metropolitan Transportation Authority Weekly
VRDNs (Bank of Tokyo Ltd., Tokyo, Industrial Bank of
Japan Ltd., Tokyo, J.P. Morgan Wilmington, Delaware,
Mitsubishi Bank Ltd, Tokyo, Morgan Guaranty Trust Co.,
New York, National Westminster Bank, PLC, London and
Sumitomo Bank Ltd., Osaka LOCs) A-1 29,800,000
------------------------------------------------------
29,900,000 New York State Local Government Assistance Corp.
(Series D), 3.20% TOBs (Societe Generale, Paris LOC),
Mandatory Tender 8/2/1995 A-1+ 29,900,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
NEW YORK--CONTINUED
------------------------------------------------------
$21,600,000 New York State Local Government Assistance Corp.
(Series E), 3.20% TOBs (Canadian Imperial Bank of
Commerce, Toronto LOC), Mandatory Tender 8/2/1995 A-1+ $ 21,600,000
------------------------------------------------------
23,110,000 Niagara County, NY IDA, Solid Waste Disposal Facility
Revenue Bonds (Series 1994-A) Weekly VRDNs (American
Ref-Fuel Company)/(Air Products & Chemicals, Inc. and
Browning-Ferris Industries,
Inc. GTDs) A-1 23,110,000
------------------------------------------------------
14,000,000 Suffolk County, NY, 1995 (RA Series I), 5.25% TANs
(Westdeutsche Landesbank Girozentrale LOC), 8/15/1995 SP-1+ 14,002,354
------------------------------------------------------
3,800,000 Syracuse, NY IDA Syracuse, Multi Modal Civic Facility
Revenue Bonds (Series 1993) Daily VRDNs (Syracuse
University Eggers Halls Project)/(Morgan Guaranty
Trust Co., New York LOC) A-1+ 3,800,000
------------------------------------------------------ --------------
Total 138,812,354
------------------------------------------------------ --------------
NORTH CAROLINA--4.4%
------------------------------------------------------
30,000,000 Charlotte-Mecklenburg Hospital Authority, NC, Loan
Participation Certificates (1995) VRNs (The Charlotte-
Mecklenburg Hospital Authority), 5/22/1996 NR(2) 30,000,000
------------------------------------------------------
4,320,000 Fayetteville, NC Public Works Commission, Revenue
Refunding Bonds Weekly VRDNs (FGIC INS)/
(Merrill Lynch Capital Services, Inc. LIQ) VMIG1 4,320,000
------------------------------------------------------
4,000,000 Greensboro, NC, Certificates of Participation 1994
Equipment Project Weekly VRDNs (Greensboro, NC Center
City Corp.)/(Wachovia Bank of Georgia N.A., Atlanta
LIQ) A-1+ 4,000,000
------------------------------------------------------
15,000,000 Martin County, NC IFA, (Series 1993) Weekly VRDNs
(Weyerhaeuser Co.) A-1 15,000,000
------------------------------------------------------
745,000 NCNB Pooled Tax-Exempt Trust (Series 1990-A) Weekly
VRDNs (NCNB Tax Exempt Trust 1990a)/(Nationsbank of
North Carolina N.A. LOC) P-1 745,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
NORTH CAROLINA--CONTINUED
------------------------------------------------------
$ 4,700,000 North Carolina Medical Care Commission Hospital,
Revenue Bonds (Series 1994) Weekly VRDNs (Hugh Chatam
Memorial/Rutherford Hospitals)/(First Union National
Bank, Charlotte, N.C. LOC) VMIG1 $ 4,700,000
------------------------------------------------------
10,000,000 North Carolina Municipal Power Agency No 1, 3.50% CP
(Bank of America NT and SA, San Francisco, Canadian
Imperial Bank of Commerce, Toronto, First Union
National Bank, Charlotte, N.C., Industrial Bank of
Japan Ltd., Tokyo, Morgan Guaranty Trust Co., New York
and Nationsbank of North Carolina N.A. LIQs),
Mandatory Tender 10/26/1995 P-1 10,000,000
------------------------------------------------------ --------------
Total 68,765,000
------------------------------------------------------ --------------
OHIO--5.7%
------------------------------------------------------
2,700,000 Akron, Bath & Copley, OH Joint Township Weekly VRDNs
(Visiting Nurses)/(National City Bank, Cleveland, OH
LOC) A-1 2,700,000
------------------------------------------------------
2,585,000 Ashland County, OH Health Care Weekly VRDNs (Brethren
Care, Inc.)/(National City Bank,
Cleveland, OH LOC) P-1 2,585,000
------------------------------------------------------
8,850,000 Cincinnati City School District, OH, 5.80% TANs,
12/29/1995 NR(3) 8,863,842
------------------------------------------------------
1,100,000 Cuyahoga County, OH Hospital Authority Weekly VRDNs
(St. Lukes Hospital)/(First National Bank of Chicago
LOC) VMIG1 1,100,000
------------------------------------------------------
2,650,000 Cuyahoga County, OH IDA Weekly VRDNs (H.P. Parking
Co.)/(Society National Bank, Cleveland, OH LOC) P-1 2,650,000
------------------------------------------------------
2,000,000 Dayton, OH Revenue Refunding Bonds (Series 1993-E)
Weekly VRDNs (Emery Air Freight Corp.)/(Mellon Bank
N.A., Pittsburgh LOC) VMIG1 2,000,000
------------------------------------------------------
6,100,000 Franklin County, OH Hospital Facility Authority Weekly
VRDNs (Riverside United Methodist Hospital)/
(National City Bank, Cleveland, OH LOC) VMIG1 6,100,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
OHIO--CONTINUED
------------------------------------------------------
$12,400,000 Hamilton County, OH Hospital Facilities Authority,
Revenue Bonds (Series 1986-A) Weekly VRDNs
(Good Samaritan Hospital) A-1 $ 12,400,000
------------------------------------------------------
2,500,000 Kettering, OH IDA Weekly VRDNs (Center-Plex
Venture)/(Society National Bank, Cleveland, OH LOC) P-1 2,500,000
------------------------------------------------------
2,885,000 Lorain County, OH, Health Facilities Revenue Bonds
(Series 1992-A) Weekly VRDNs (Elyria United Methodist
Home)/(Fifth Third Bancorp LOC) P-1 2,885,000
------------------------------------------------------
2,000,000 Lucas County, OH IDA (Series 1991) Weekly
VRDNs (Ohio Citizens Bank)/(National City Bank,
Cleveland, OH LOC) P-1 2,000,000
------------------------------------------------------
295,000 Lucas County, OH, Hospital Improvement Revenue Weekly
VRDNs (Sunshine Children's Home)/
(National City Bank, Cleveland, OH LOC) P-1 295,000
------------------------------------------------------
4,300,000 Lucas County, OH, Hospital Refunding Revenue
Bonds Weekly VRDNs (Riverside Hospital, OH)/
(Huntington National Bank, Columbus, OH LOC) P-1 4,300,000
------------------------------------------------------
6,900,000 Mahoning County, OH, Housing Revenue Bonds (Series
1995) Weekly VRDNs (Copeland Oaks Project)/(Bank One,
Akron, N.A. LOC) A-1+ 6,900,000
------------------------------------------------------
2,210,000 Marion County, OH Hospital Authority (Series 1991),
4.25% TOBs (Marion County, OH Pooled Hospital
Program)/(Bank One, Columbus, N.A. LOC) Optional
Tender 11/1/1995 A-1+ 2,210,000
------------------------------------------------------
4,250,000 Mayfield Village, OH IDA Weekly VRDNs (Beta Campus
Co.)/(First Union National Bank, Charlotte, N.C. LOC) P-1 4,250,000
------------------------------------------------------
5,400,000 Medina County, OH, Solid Waste Disposal Revenue Bonds
(Series 1995) Weekly VRDNs (Valley City
Steel Company Project)/(Society National Bank,
Cleveland, OH LOC) P-1 5,400,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
OHIO--CONTINUED
------------------------------------------------------
$ 800,000 Montgomery County, OH IDA Weekly VRDNs
(Center-Plex Venture)/(Society National Bank,
Cleveland, OH LOC) P-1 $ 800,000
------------------------------------------------------
1,700,000 Montgomery, OH IDA Weekly VRDNs (Bethesda Two Limited
Partnership)/(Huntington National Bank, Columbus, OH
LOC) A-1 1,700,000
------------------------------------------------------
4,700,000 Muskingham County, OH Hospital Facilities
Authority Weekly VRDNs (Bethesda Care System)/
(National City Bank, Columbus, OH LOC) VMIG1 4,700,000
------------------------------------------------------
1,800,000 Ohio State Air Quality Development Authority (Series
1998-A) Weekly VRDNs (PPG Industries, Inc.) P-1 1,800,000
------------------------------------------------------
4,080,000 Ohio State Water Development Authority, Pure Water
Refunding & Improvement Bonds (Series PA-56)
Weekly VRDNs (AMBAC INS)/(Merrill Lynch Capital
Services, Inc. LIQ) VMIG1 4,080,000
------------------------------------------------------
1,800,000 Rickenbacker, OH Port Authority (Series 1992)
Weekly VRDNs (Rickenbacker Holdings, Inc.)/
(Bank One, Columbus, N.A. LOC) P-1 1,800,000
------------------------------------------------------
1,900,000 Seneca County, OH Hospital Facility Authority
Weekly VRDNs (St. Francis Home)/
(National City Bank, Cleveland, OH LOC) VMIG1 1,900,000
------------------------------------------------------
800,000 Solon, OH, IDA Weekly VRDNs (Solon Industries)/
(Society National Bank, Cleveland, OH LOC) P-1 800,000
------------------------------------------------------
1,100,000 Twinsburg, OH IDA Weekly VRDNs (Care of Massara)/
(Society National Bank, Cleveland, OH LOC) P-1 1,100,000
------------------------------------------------------ --------------
Total 87,818,842
------------------------------------------------------ --------------
OKLAHOMA--0.6%
------------------------------------------------------
10,000,000 Holdenville, OK Industrial Authority, Correctional
Facility Revenue Bonds (Series 1995) Weekly VRDNs
(Holdenville, OK Correctional Facility)/(First Union
National Bank, Charlotte, N.C. LOC) VMIG1 10,000,000
------------------------------------------------------ --------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
OREGON--0.1%
------------------------------------------------------
$ 2,000,000 Oregon Health, Housing & Cultural Facilities
Authority, Adjustable Rate Revenue Bonds (Series
1995-A) Weekly VRDNs (Guide Dogs for the Blind, Inc.
Project)/
(Banque Nationale de Paris LOC) MIG1 $ 2,000,000
------------------------------------------------------ --------------
PENNSYLVANIA--2.5%
------------------------------------------------------
5,000,000 Allegheny County, PA IDA, PCR (Series 1992-A), 4.80%
TOBs (Duquesne Light Power Co.)/(Canadian Imperial
Bank of Commerce, Toronto LOC), Mandatory Tender
10/17/1995 P-1 5,000,000
------------------------------------------------------
4,000,000 Beaver County, PA IDA, PCR Refunding Bonds (1994
Series), 4.50% CP (Duquesne Light Power Co.)/ (Swiss
Bank Corp., New York, NY LOC), Mandatory Tender
10/10/1995 A-1+ 4,000,000
------------------------------------------------------
6,300,000 Delaware County, PA PCR (Series C), 4.00% CP
(Philadelphia Electric Co.)/(FGIC INS), Mandatory
Tender 10/6/1995 A-1+ 6,300,000
------------------------------------------------------
4,200,000 Delaware County, PA Weekly VRDNs
(American College)/(PNC Bank, N.A. LOC) P-1 4,200,000
------------------------------------------------------
5,600,000 Erie County, PA Hospital Authority Weekly VRDNs (St.
Vincent Health System)/(Fuji Bank, Ltd., Tokyo LOC) A-1 5,600,000
------------------------------------------------------
1,300,000 Pennsylvania State Higher Education Facilities
Authority Weekly VRDNs (Carnegie-Mellon University) A-1 1,300,000
------------------------------------------------------
6,000,000 Philadelphia, PA, GO (Series 1990), 3.90% CP (Fuji
Bank, Ltd., Tokyo LOC), Mandatory Tender 8/23/1995 A-1 6,000,000
------------------------------------------------------
3,690,000 Pittsburgh, PA, GO Unlimited Bonds (Series B), 4.10%
BONDs (AMBAC INS), 9/1/1995 NR(1) 3,690,300
------------------------------------------------------
500,000 Sayre, PA, Health Care Facilities Authority Weekly
VRDNs (VHA of Pennsylvania)/(AMBAC INS)/
(First National Bank of Chicago LIQ) A-1 500,000
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
------------------------------------------------------
$ 2,000,000 Washington County, PA Hospital Authority Weekly VRDNs
(Keystone Diversified Management Corp.)/(Mellon Bank
N.A., Pittsburgh LOC) A-1 $ 2,000,000
------------------------------------------------------ --------------
Total 38,590,300
------------------------------------------------------ --------------
PUERTO RICO--0.6%
------------------------------------------------------
10,000,000 Puerto Rico Government Development Bank Weekly VRDNs
(Credit Suisse, Zurich LOC) A-1+ 10,000,000
------------------------------------------------------ --------------
SOUTH CAROLINA--0.5%
------------------------------------------------------
3,000,000 Greenville, SC Hospital System Board of Trustees,
(Series 1993-B) Weekly VRDNs (Greenville County, SC
Hospital Authority) A-1+ 3,000,000
------------------------------------------------------
5,000,000 University of South Carolina, Athletic Facilities
(Series 1995), 5.25% BANs, 3/1/1996 NR(3) 5,031,756
------------------------------------------------------ --------------
Total 8,031,756
------------------------------------------------------ --------------
TENNESSEE--3.1%
------------------------------------------------------
10,000,000 Chattanooga, TN HEFA Weekly VRDNs
(Mccallie School)/(Trust Company Bank, Atlanta LOC) A-1+ 10,000,000
------------------------------------------------------
22,400,000 Chattanooga, TN HEFA Weekly VRDNs
(Sisken Hospital)/(Sumitomo Bank Ltd., Osaka LOC) A-1 22,400,000
------------------------------------------------------
2,200,000 Metropolitan Nashville Tennessee AA, (Series 1993)
Weekly VRDNs (FGIC INS)/(Societe Generale, Paris LIQ) A-1+ 2,200,000
------------------------------------------------------
7,330,000 Nashville and Davidson County, NC IDB, Metropolitan
Government Revenue Bonds (Series 1995) Weekly VRDNs
(YMCA Projects)/(Nationsbank of Tennessee LOC) P-1 7,330,000
------------------------------------------------------
6,200,000 Roane, TN IDB, (Series 1982) Monthly VRDNs
(Fortafil Fibers, Inc. Project)/(ABN AMRO Bank N.V.,
Amsterdam LOC) A-1+ 6,200,000
------------------------------------------------------ --------------
Total 48,130,000
------------------------------------------------------ --------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
TEXAS--2.0%
------------------------------------------------------
$ 4,325,000 Dallas, TX (Series C), 3.90% TOBs, Optional Tender
6/15/1996 NR(1) $ 4,325,000
------------------------------------------------------
11,050,000 Harris County, TX HFDC (Series B), 3.90% TOBs
(San Jacinto Methodist Hospital)/(Morgan Guaranty
Trust Co., New York LOC), Mandatory Tender 9/1/1995 A-1+ 11,050,000
------------------------------------------------------
7,000,000 Harris County, TX, Toll Road Unlimited Tax & Sub Lien
Revenue (Series 1994-G) Weekly VRDNs A-1+ 7,000,000
------------------------------------------------------
2,000,000 Montgomery County, TX IDC, IDRB Weekly VRDNs (Houston
Area Research Center)/(Morgan Guaranty Trust Co., New
York LOC) A-1+ 2,000,000
------------------------------------------------------
1,920,000 North Richland Hills, TX IDC Weekly VRDNs (Tecnol,
Inc.)/(Nationsbank of North Carolina N.A. LOC) P-1 1,920,000
------------------------------------------------------
5,000,000 Texas State Department of Housing & Community
Affairs, Multifamily Housing Revenue Refunding Bonds
(Remington Hill Series B) Weekly VRDNs
(Trust Company Bank, Atlanta LOC) A-1+ 5,000,000
------------------------------------------------------ --------------
Total 31,295,000
------------------------------------------------------ --------------
UTAH--1.3%
------------------------------------------------------
19,670,000 Utah State HFA, Single Family Mortgage Bonds (Series
1995-1) Weekly VRDNs (Westdeutsche Landesbank
Girozentrale LIQ) A-1+ 19,670,000
------------------------------------------------------ --------------
VIRGINIA--0.8%
------------------------------------------------------
1,500,000 Arlington County, VA Weekly VRDNs (Ballston Public
Parking)/(Citibank, NA LOC) A-1+ 1,500,000
------------------------------------------------------
6,200,000 Henrico County, VA IDA, (Series 1994) Daily VRDNs
(Virginia United Methodist Homes, Inc.)/(Nationsbank
of Virginia, N.A. LOC) VMIG1 6,200,000
------------------------------------------------------
5,000,000 Virginia State Housing Development Authority, (Series
1993-A), 3.45% TOBs, Mandatory Tender 9/12/1995 A-1+ 5,000,000
------------------------------------------------------ --------------
Total 12,700,000
------------------------------------------------------ --------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
WASHINGTON--0.4%
------------------------------------------------------
$ 5,535,000 Pierce County, WA (Series 1995), 4.50% TANs,
12/27/1995 NR(3) $ 5,537,682
------------------------------------------------------ --------------
WEST VIRGINIA--0.5%
------------------------------------------------------
7,960,000 Cabell County Commission, WV, Life Care Facilities
Multi-Option Adjustable Rate Revenue Bonds (Series
1995) Weekly VRDNs (Foster Foundation)/(Huntington
National Bank, Columbus, OH LOC) A-1 7,960,000
------------------------------------------------------ --------------
WISCONSIN--2.3%
------------------------------------------------------
1,100,000 Seymour, WI IDA Weekly VRDNs (Beatrice Cheese,
Inc.)/(Bank of New York, New York LOC) P-1 1,100,000
------------------------------------------------------
34,000,000 Wisconsin HEFA Weekly VRDNs (St. Luke's Medical
Center)/(Sumitomo Bank Ltd., Osaka LOC) VMIG1 34,000,000
------------------------------------------------------ --------------
Total 35,100,000
------------------------------------------------------ --------------
WYOMING--0.4%
------------------------------------------------------
1,125,000 Natrona County, WY, Hospital Revenue, 5.85% TOBs
(Grainger W.W., Inc.), Optional Tender 12/1/1995 P-1 1,125,000
------------------------------------------------------
4,400,000 Sweetwater County, WY IDA, PCR Refunding Bonds (Series
1990-A) Weekly VRDNs (Pacificorp)/
(Credit Suisse, Zurich LOC) VMIG1 4,400,000
------------------------------------------------------ --------------
Total 5,525,000
------------------------------------------------------ --------------
NO STATE--1.4%
------------------------------------------------------
10,000,000 Clipper Tax Exempt Trust (Series 1993-1) Weekly VRDNs
(State Street Bank and Trust Co. LIQ) A-1+ 10,000,000
------------------------------------------------------
6,440,583 LaSalle National Bank Leasetops Trust (Series 1994-B)
Weekly VRDNs (Lasalle National Bank, Chicago LIQ)/
(Lasalle National Bank, Chicago LOC) A-1+ 6,440,583
------------------------------------------------------
1,934,628 LaSalle National Bank Tax-Exempt Trust (Series 1993-A)
Weekly VRDNs (Lasalle National Bank, Chicago LIQ)/
(Lasalle National Bank, Chicago LOC) A-1+ 1,934,628
------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
--------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------
NO STATE--CONTINUED
------------------------------------------------------
$ 3,040,000 Merrill Lynch Puttable FLOATs/RITES Trust (Series PP2)
Weekly VRDNs VMIG1 $ 3,040,000
------------------------------------------------------ --------------
Total 21,415,211
------------------------------------------------------ --------------
TOTAL INVESTMENTS, AT AMORTIZED COST(A) $1,553,856,743
------------------------------------------------------ --------------
</TABLE>
(a) Also represents cost for federal tax purposes.
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
Note: The categories of investments are shown as a percentage of net assets
($1,547,473,496) at July 31, 1995.
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
The following acronyms are used throughout this portfolio:
<TABLE>
<S> <C>
AMBAC --American Municipal Bond Assurance Corporation
BANs --Bond Anticipation Notes
CDA --Community Development Administration
CP --Commercial Paper
EDA --Economic Development Authority
FGIC --Financial Guaranty Insurance Company
FSA --Financial Security Assurance
GO --General Obligation
GTDs --Guarantees
HEFA --Health and Education Facilities Authority
HFA --Housing Finance Authority
HFDC --Health Facility Development Corporation
IDA --Industrial Development Authority
IDB --Industrial Development Bond
IDC --Industrial Development Corporation
IDR --Industrial Development Revenue
IDRB --Industrial Development Revenue Bonds
IDFA --Industrial Development Finance Authority
IFA --Industrial Finance Authority
INS --Insurance
LIQ --Liquidity Agreement
LOCs --Letter(s) of Credit
LOC --Letter of Credit
MBIA --Municipal Bond Investors Assurance
PCR --Pollution Control Revenue
PFA --Public Facility Authority
PLC --Public Limited Company
RANs --Revenue Anticipation Notes
TANs --Tax Anticipation Notes
TOBs --Tender Option Bonds
TRANs --Tax and Revenue Anticipation Notes
VHA --Veterans Housing Administration
VRDNs --Variable Rate Demand Notes
VRNs --Variable Rate Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TAX-FREE OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $1,553,856,743
- ------------------------------------------------------------------------------
Cash 933,463
- ------------------------------------------------------------------------------
Income receivable 9,103,589
- ------------------------------------------------------------------------------ --------------
Total assets 1,563,893,795
- ------------------------------------------------------------------------------
LIABILITIES:
- ------------------------------------------------------------------------------
Payable for investments purchased $11,518,668
- ----------------------------------------------------------------
Income distribution payable 4,394,007
- ----------------------------------------------------------------
Accrued expenses 507,624
- ---------------------------------------------------------------- -----------
Total liabilities 16,420,299
- ------------------------------------------------------------------------------ --------------
NET ASSETS for 1,547,494,731 shares outstanding $1,547,473,496
- ------------------------------------------------------------------------------ --------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------
Paid in capital 1,547,494,731
- ------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments (21,235)
- ------------------------------------------------------------------------------ --------------
Total Net Assets $1,547,473,496
- ------------------------------------------------------------------------------ --------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
Institutional Shares:
($1,295,457,878 / 1,295,478,935 shares outstanding) $1.00
- ------------------------------------------------------------------------------ --------------
Institutional Service Shares:
($252,015,618 / 252,015,796 shares outstanding) $1.00
- ------------------------------------------------------------------------------ --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TAX-FREE OBLIGATIONS FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------------------------------
Interest $44,477,152
- ------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------
Investment advisory fee $2,318,805
- ----------------------------------------------------------------------------
Administrative personnel and services fee 877,668
- ----------------------------------------------------------------------------
Custodian fees 110,650
- ----------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 43,928
- ----------------------------------------------------------------------------
Directors'/Trustees' fees 5,202
- ----------------------------------------------------------------------------
Auditing fees 12,951
- ----------------------------------------------------------------------------
Legal fees 16,729
- ----------------------------------------------------------------------------
Portfolio accounting fees 128,996
- ----------------------------------------------------------------------------
Shareholder services fee--Institutional Shares 2,520,292
- ----------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 378,074
- ----------------------------------------------------------------------------
Share registration costs 337,930
- ----------------------------------------------------------------------------
Printing and postage 28,823
- ----------------------------------------------------------------------------
Insurance premiums 15,420
- ----------------------------------------------------------------------------
Taxes 22
- ----------------------------------------------------------------------------
Miscellaneous 14,033
- ---------------------------------------------------------------------------- ----------
Total expenses 6,809,523
- ----------------------------------------------------------------------------
Deduct--
- ----------------------------------------------------------------------------
Waiver of investment advisory fee $1,581,210
- ---------------------------------------------------------------
Waiver of shareholder services fee--Institutional Shares 2,520,292 4,101,502
- --------------------------------------------------------------- ---------- ----------
Net expenses 2,708,021
- ------------------------------------------------------------------------------------------ -----------
Net investment income 41,769,131
- ------------------------------------------------------------------------------------------ -----------
Net realized gain (loss) on investments (1,395)
- ------------------------------------------------------------------------------------------ -----------
Change in net assets resulting from operations $41,767,736
- ------------------------------------------------------------------------------------------ -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TAX-FREE OBLIGATIONS FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
---------------------------------
1995 1994
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------
Net investment income $ 41,769,131 $ 16,807,122
- -------------------------------------------------------------
Net realized gain/loss on investments ($40 net gain and
$19,220 net loss, respectively, as computed for federal
income tax purposes) (1,395) 3,986
- ------------------------------------------------------------- --------------- ---------------
Change in assets resulting from operations 41,767,736 16,811,108
- ------------------------------------------------------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------
Distributions from net investment income:
- -------------------------------------------------------------
Institutional Shares (36,508,581) (16,783,291)
- -------------------------------------------------------------
Institutional Service Shares (5,260,550) (23,831)
- ------------------------------------------------------------- --------------- ---------------
Change in net assets resulting from distributions
to shareholders (41,769,131) (16,807,122)
- ------------------------------------------------------------- --------------- ---------------
SHARE TRANSACTIONS--
- -------------------------------------------------------------
Proceeds from sale of Shares 7,385,500,551 3,346,441,976
- -------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment
of distributions declared 2,286,899 460,949
- -------------------------------------------------------------
Cost of Shares redeemed (6,655,215,610) (2,986,122,657)
- ------------------------------------------------------------- --------------- ---------------
Change in net assets resulting from share transactions 732,571,840 360,780,268
- ------------------------------------------------------------- --------------- ---------------
Change in net assets 732,570,445 360,784,254
- -------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------
Beginning of period 814,903,051 454,118,797
- ------------------------------------------------------------- --------------- ---------------
End of period $ 1,547,473,496 $ 814,903,051
- ------------------------------------------------------------- --------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TAX-FREE OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Money Market Obligations 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 six diversified portfolios. The
financial statements included herein are only those of Tax-Free Obligations Fund
(the "Fund"). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held. The Fund offers
two classes of shares: Institutional Shares and Institutional Service Shares.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
At July 31, 1995, the Fund, for federal tax purposes, had a capital loss
carryforward of $19,800, which will reduce the Fund's taxable income
arising from future net realized gain on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of the distributions
to shareholders which would otherwise be necessary to relieve the Fund of
any liability for federal tax. Pursuant to the Code, such capital loss
carryforward will expire as follows:
<TABLE>
<CAPTION>
EXPIRATION YEAR EXPIRATION AMOUNT
- --------------- -----------------
<S> <C>
2001 $580
2002 $19,220
</TABLE>
Additionally, net capital losses of $1,435 attributable to security
transactions incurred after October 31, 1994 are treated as arising on
August 1, 1995, the first day of the Fund's next taxable year.
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
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.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At July 31, 1995, capital paid-in aggregated $1,547,494,731.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
--------------------------------
INSTITUTIONAL SHARES 1995 1994
- -------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Shares sold 6,466,015,512 3,312,845,513
- --------------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 1,609,289 460,949
- --------------------------------------------------------------
Shares redeemed (5,961,920,320) (2,977,674,630)
- -------------------------------------------------------------- -------------- --------------
Net change resulting from Institutional Share transactions 505,704,481 335,631,832
- -------------------------------------------------------------- -------------- --------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
--------------------------------
INSTITUTIONAL SERVICE SHARES 1995 1994*
- -------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Shares sold 919,485,039 33,596,463
- --------------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 677,610 --
- --------------------------------------------------------------
Shares redeemed (693,295,290) (8,448,027)
- -------------------------------------------------------------- -------------- --------------
Net change resulting from Institutional Service Share
transactions 226,867,359 25,148,436
- -------------------------------------------------------------- -------------- --------------
Net change resulting from share transactions 732,571,840 360,780,268
- -------------------------------------------------------------- -------------- --------------
</TABLE>
* For the period from July 5, 1994 (date of initial public offering) to July 31,
1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser,
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .20 of 1% of the Fund's average daily net assets.
The Adviser may voluntarily choose to waive a portion of its fee and/or
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. This fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services (FSS), the Fund will pay FSS up to 0.25 of
1% of daily average net assets of the Fund for the period. This fee is to obtain
certain personal services for shareholders and to maintain shareholder accounts.
FSS may voluntarily choose to waive a portion of this fee. FSS can modify or
terminate this voluntary waiver at any time at its sole discretion.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. The FServ fee is based on the size, type, and number of accounts and
transactions made by shareholders.
INTERFUND TRANSACTIONS--During the year ended July 31, 1995, the Fund engaged in
purchase and sale transactions with funds that have a common investment adviser
(or affiliated investment advisers), common Directors/Trustees, and/or common
Officers. These transactions were made at current market value pursuant to Rule
17a-7 under the Act amounting to $2,395,054,229 and $2,346,849,715,
respectively.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Trust's accounting records
for which it receives a fee. The fee is based on the level of the Trust's
average daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors of the above companies.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
MONEY MARKET OBLIGATIONS TRUST:
(Tax-Free Obligations Fund)
We have audited the accompanying statement of assets and liabilities of Tax-Free
Obligations Fund (an investment portfolio of Money Market Obligations Trust, a
Massachusetts business trust), including the schedule of portfolio investments,
as of July 31, 1995, the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for the periods presented. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of July
31, 1995, by correspondence with the custodian and broker. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Tax-Free Obligations Fund (an investment portfolio of Money Market Obligations
Trust) as of July 31, 1995, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for the periods presented, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
September 8, 1995
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Tax-Free Obligations Fund
Institutional Service Shares Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8600
Trust Company Boston, Massachusetts 02266-8600
- ------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, Massachusetts 02266-8600
- ------------------------------------------------------------------------------------------------
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TAX-FREE OBLIGATIONS FUND
(A PORTFOLIO OF MONEY MARKET
OBLIGATIONS TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
A Diversified Portfolio of Money Market
Obligations Trust, an Open-End Management
Investment Company
Prospectus dated September 30, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 60934N880
9110207A-SS (9/95)
PART C. OTHER INFORMATION.
Item 24. Financial Statements and Exhibits:
(a) Financial Statements. (Filed in Part A)
(b) Exhibits:
(1) Copy of Declaration of Trust of the Registrant dated
October 3, 1988;+
(i) Amendment to the Declaration of Trust dated
October 3, 1989;+
(ii) Conformed copy of Amendment No. 8 to
Declaration of Trust dated December 28, 1994
(10);
(2) Copy of By-Laws of the Registrant;+
(3) Not applicable;
(4) Copy of Specimen Certificate for Shares of Beneficial
Interest of the Registrant (8);
(5) Copy of Investment Advisory Contract of the
Registrant (1);
(i) Copy of Exhibit G to Investment Advisory
Contract;+
(ii) Conformed copy of Investment Advisory Contract
between Registrant and Federated
Administrative Services dated March 1, 1995
(11);
(6) Copy of Distributor's Contract of the
Registrant (7);
(i) Conformed Copy of Exhibit F to
Distributor's Contract (9);
(ii) Copy of Exhibit G to Distributor's
Contract (9);
(iii) Copy of Exhibit H to Distributor's
Contract (9);
(iv) Conformed copy of Exhibit C to
Distributor's Contract (11);
(v) Conformed copy of Exhibit D to
Distributor's Contract (11);
(vi) The Registrant incorporates the conformed
copy of the specimen Mutual Funds Sales
and Service Agreement; Mutual Funds
Service Agreement; and Plan Trustee/
Mutual Funds Service Agreement from Item
24(b)(6) of the Cash Trust Series II
Registration Statement filed with the
Commission on July 24, 1995. (File Number
33-38550 and 811-2669).
(7) Not applicable;
(8) Conformed copy of Custodian Agreement of the
Registrant (8);
(9) (i) Conformed copy of Transfer Agency and
Service Agreement of the Registrant (8);
(ii) Conformed Copy of Fund Accounting Agreement
(10);
(iii) The response and exhibits described in Item
24(b)(vi) are hereby incorporated by
reference;+
(iv) Copy of Shareholder Services Sub-Contract dated
June 1, 1994 (9);
(10) Copy of Opinion and Consent of Counsel as to
legality of shares being registered;+
(11) Conformed copy of Consent of the Independent
Public Accountants;+
(12) Not applicable;
(13) Copy of Initial Capital Understanding;+
(14) Not applicable;
(15) (i) Copy of Rule 12b-1 Plan dated June 1, 1994
(9);
(ii) Copy of Rule 12b-1 Agreement dated June 1,
1994 (9);
(16) Schedule for Computation of Fund Performance
Data;+
(17) Financial Data Schedules;+
(18) Not Applicable;
(19) Power of Attorney;+
+ All exhibits have been filed electronically.
1. Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed October 20, 1989. (File
No. 33-31602)
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed December 8, 1989.
(File No. 33-31602)
3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 on Form N-1A filed June 25, 1990. (File No. 33-31602)
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 3 on Form N-1A filed September 26, 1991. (File
No. 33-31602)
5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed September 28, 1992. (File
No. 33-31602)
6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed September 27, 1993. (File
No. 33-31602)
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 of Form N-1A filed May 6, 1994. (File No. 33-31602)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed June 1, 1994. (File No. 33-31602)
9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 11 on Form N-1A filed November 25, 1994. (File No. 33-
31602)
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 12 filed February 21, 1995. (File No. 33-31602)
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 filed May 7, 1995. (File No. 33-31602)
Item 25. Persons Controlled by or Under Common Control with Registrant:
None
Item 26. Number of Holders of Securities:
Number of Record Holders
Title of Class as of April 28, 1995
Shares of Beneficial Interest
Government Obligations Fund
Institutional Shares 500
Institutional Service Shares 339
Prime Obligations Fund
Institutional Shares 1,285
Institutional Service Shares 934
Tax-Free Obligations Fund
Institutional Shares 201
Institutional Service Shares 151
Treasury Obligations Fund
Institutional Shares 434
Institutional Service Shares 406
Automated Cash Management Trust 14,404
Government Obligations Tax-Managed Fund
Institutional Shares 9
Institutional Service Shares 5
Item 27. Indemnification: (1)
Item 28. Business and Other Connections of Investment Adviser:
For a description of the other business of Federated Management,
the investment adviser for Automated Cash Management Trust,
Government Obligations Fund, Prime Obligations Fund, Tax-Free
Obligations Fund and Treasury Obligations Fund, see the section
entitled "Management of Money Market Obligations Trust" in Part
A. The affiliations with the Registrant of four of the Trustees
and two of the Officers of the Federated Management and their
business addresses are included in Part B of this Registration
Statement under "Money Market Obligations Trust Management." The
remaining Trustee of Federated Management, his principal
occupation and business address is: Mark D. Olson (Partner,
Wilson, Halbrook & Bayard), 107 West Market Street, Georgetown,
Delaware 19947.
The remaining Officers of Federated Management are: William D.
Dawson, Henry A. Frantzen, J. Thomas Madden, and Mark L. Mallon,
Executive Vice Presidents; Henry J. Gailliot, Senior Vice
President-Economist; Peter R. Anderson, Drew J. Collins, Jonathan
C. Conley, and J. Alan Minteer, Senior Vice Presidents; J. Scott
Albrecht, Joseph M. Ballestrino, Randall A. Bauer, David A.
Briggs, Kenneth J. Cody, Deborah A. Cunningham, Michael P.
Donnelly, Mark E. Durbiano, Kathleen M. Foody-Malus, Thomas M.
Franks, Stephen A. Keen, Mark S. Kopinski, Jeff A. Kozemchak,
Marian R. Marinack, Susan M. Nason, Mary Jo Ochson, Robert J.
Ostrowski, Charles A. Ritter, James D. Roberge, Frank Semack,
Sandra L. Weber, and Christopher H. Wiles, Vice Presidents;
Edward C. Gonzales, Treasurer; and John W. McGonigle, Secretary.
The business address of each of the Officers of the investment
adviser is Federated Investors Tower, Pittsburgh, Pennsylvania
15222-3779. These individuals are also officers of a majority of
the investment advisers to the Funds listed in Part B of this
Registration Statement under "The Funds."
For a description of the other business of Federated
Administrative Services, the investment adviser for Government
Obligations Tax-Managed Fund, see the section entitled
"Management of Money Market Obligations Trust" in Part A. The
affiliations with the Registrant of three of the Trustees and two
of the Officers of the Federated Administrative Services and
their business addresses are included in Part B of this
Registration Statement under "Money Market Obligations Trust
Management." The remaining Trustees of Federated Administrative
Services, their principal occupations and business addresses are:
James J. Dolan, (President, COO, Federated Administrative
Services), David M. Taylor, (Senior Vice President, Federated
Administrative Services), Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779, and Mark D. Olson (Partner, Wilson,
Halbrook & Bayard), 107 West Market Street, Georgetown, Delaware
19947.
The remaining Officers of Federated Administrative Services are:
S. Elliott Cohan, William D. Genge, Douglas L. Hein, Eugene F.
Maloney, Denis McAuley, R. Jeffrey Niss, Frank E. Polefrone,
Wayne Swift, and Thomas J. Ward, Senior Vice Presidents; Debbie
Adams-Marshall, John C. Anderson, Paul C. Angell, Keith A. Antle,
Timothy Biedrzycki, Byron F. Bowman, Craig P. Churman, Daniel P.
Cwenar, Charles L. Davis, Jr., Peter G. Downing, Emily H. Emigh,
Charles C. Fawcett, Raymond J. Hanley, Newton Heston, III, Philip
C. Hetzel, Shirley A. Hutton, Theresa Kelly, Maureen N. Kennedy,
Anne H. Kruczek, Raymond C. Kutzer, Joseph S. Machi, Joseph L.
Mayer, James J. McKown, Amy M. Michaliszyn, Ronald M. Petnuch,
Carole A. Popchock, Larry Sebbens, Jeffrey W. Sterling, Richard
Thomas, C. Christine Thomson, Robert J. Wagner, James G. Wallace,
and Theodore W. Zierden, Vice Presidents. The business address
of each of the Officers of the investment adviser is Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779.
Item 29. Principal Underwriters:
(a) Federated Securities Corp., the Distributor for shares of the
Registrant, also acts as principal underwriter for the
following open-end investment companies: Alexander Hamilton
Funds; American Leaders Fund, Inc.; Annuity Management
Series; Arrow Funds; Automated Government Money Trust;
BayFunds; The Biltmore Funds; The Biltmore Municipal Funds;
Blanchard Funds; Blanchard Precious Metals, Inc.; Cash Trust
Series, Inc.; Cash Trust Series II; DG Investor Series;
Edward D. Jones & Co. Daily Passport Cash Trust; Federated
ARMs Fund; Federated Equity Funds; Federated Exchange Fund,
Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated High Yield Trust; Federated Income Securities
Trust; Federated Income Trust; Federated Index Trust;
Federated Institutional Trust; Federated Master Trust;
Federated Municipal Trust; Federated Short-Term Municipal
Trust; Federated Short-Term U.S. Government Trust; Federated
Stock Trust; Federated Tax-Free Trust; Federated Total
Return Series, Inc.; Federated U.S. Government Bond Fund;
Federated U.S. Government Securities Fund: 1-3 Years;
Federated U.S. Government Securities Fund: 3-5 Years;First
Priority Funds; First Union Funds; Fixed Income Securities,
Inc.; Fortress Adjustable Rate U.S. Government Fund, Inc.;
Fortress Municipal Income Fund, Inc.; Fortress Utility Fund,
Inc.; Fountain Square Funds; Fund for U.S. Government
Securities, Inc.; Government Income Securities, Inc.; High
Yield Cash Trust; Independence One Mutual Funds; Insurance
Management Series; Intermediate Municipal Trust;
International Series Inc.; Investment Series Funds, Inc.;
Investment Series Trust; Liberty Equity Income Fund, Inc.;
Liberty High Income Bond Fund, Inc.; Liberty Municipal
Securities Fund, Inc.; Liberty U.S. Government Money Market
Trust; Liberty Utility Fund, Inc.; Liquid Cash Trust;
Managed Series Trust; Marshall Funds, Inc.; Money Market
Management, Inc.; Money Market Obligations Trust; Money
Market Trust; The Monitor Funds; Municipal Securities Income
Trust; Newpoint Funds; 111 Corcoran Funds; Peachtree Funds;
The Planters Funds; RIMCO Monument Funds; The Shawmut Funds;
SouthTrust Vulcan Funds; Star Funds; The Starburst Funds;
The Starburst Funds II; Stock and Bond Fund, Inc.; Sunburst
Funds; Targeted Duration Trust; Tax-Free Instruments Trust;
Tower Mutual Funds; Trust for Financial Institutions; Trust
for Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury Obligations;
The Virtus Funds; Vision Fiduciary Funds, Inc.; Vision Group
of Funds, Inc.; and World Investment Series, Inc.
Federated Securities Corp. also acts as principal underwriter
for the following closed-end investment company: Liberty
Term Trust, Inc.- 1999.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, Asst.
Secretary, and Asst.
Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice Executive Vice
Federated Investors Tower President, Federated, President
Pittsburgh, PA 15222-3779 Securities Corp.
John W. McGonigle Director, Federated Executive Vice
Federated Investors Tower Securities Corp. President and
Pittsburgh, PA 15222-3779 Secretary
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust, Federated
Pittsburgh, PA 15222-3779 Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securites Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael D. Fitzherald Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
H. Joeseph Kenedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Steven A. La Versa Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert D. Oehlschlager Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John C. Shelar, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jamie M. Teschner Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charlene H. Jennings Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Timothy Radcliff Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas R. Donahue Asstistant Secretary, --
Federated Investors Tower Assistant Treasurer,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Joseph M. Huber Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David M. Taylor Assistant Secretary, Treasurer
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Item 30. Location of Accounts and Records: (4).
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to removal of Trustees
and the calling of special shareholder meetings by shareholders.
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
________________
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1A filed December 17, 1991. (File
No. 33-31602)
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, MONEY MARKET OBLIGATIONS
TRUST, certifies tht it maeets all the requirements for effectiveness of
this Registration Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pittsburgh and Commonwealth of Pennsylvania,
on the 26th day of September, 1995.
MONEY MARKET OBLIGAITONS TRUST
BY: /s/Jeannette Fisher-Garber
Jeannette Fisher-Garber, Assistant Secretary
Attorney in Fact for John F. Donahue
September 26, 1995
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE DATE
By: /s/Jeannette Fisher-Garber
Jeannette Fisher-Garber Attorney In Fact September 26, 1995
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
J. Christopher Donahue* President and Trustee
David M. Taylor* Treasurer
(Principal Financial and
Accounting Officer)
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
John E. Murray, Jr.* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Exhibit (11) under N-1A
Exhibit 23 under Item 601/Reg SK
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use in Post-
Effective Amendment No. 16 to Form N-1A Registration Statement of Money
Market Obligatons Trust of our reports dated September 8, 1995, on the
financial statements of Money Market Obligations Trust (consisting of
Automated Cash Management Trust, Government Obligations Funds, Government
Obligations Tax-Managed Fund, Prime Obligations Fund, Tax-Free Obligations
Fund, and Treasury Obligations Fund) of our report dated, included in or
made part of this registration statement.
By: ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania,
September 25, 1995
Schedule for computation of Yield Calculation
Government Obligations Tax-Managed Fund
(Insititutional Shares) 31-Jul-95
This example illustrates the yield quotation
for the seven-day period ended:
Value of a hypothetical pre-existing
account with exactly one share at the beginning $1.000000000
of the base period
Value of same account (excluding capital changes)
at end of the seven-day base period* $1.001071638
$0.001071638
Net change in account value
Base Period Return:
Net change in account value divided by the
beginning account value $0.001071638
($ .000458656/$1.000000000)
5.59%
Annualized Current Net Yield ( .001071638 x 365/7)
5.74%
Effective Yield ** (.001071638 + 1 ) (365/7) - 1
* This value includes the value of additional shares
purchased with dividends from the original share,
and dividends declared on both the original share and
any such additional shares.
** This value may change to include shares purchased with
dividends reinvested on a less frequent basis.
Schedule for Computation Initial
of Fund Performance Data Invest of: $1,000
Offering
Government Obligations Tax-Mana Price/
Share= $1.00
Return Since Inception
ending 7/31/95 NAV= $1.00
FYE: July 31
DECLARED: MONTHLY
PAID: MONTHLY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Begin Capital Reinvest Ending Total
Reinvest Period Dividend Gain Price Period Ending Invest
Dates Shares /Share /Share /Share Shares Price Value
6/30/95 1000.000 0.004597851 0.00000 $1.00 1004.598 $1.00 $1,004.60
7/31/95 1004.598 0.004775891 0.00000 $1.00 1009.396 $1.00 $1,009.40
</TABLE>
1,000 (1+T) = End Value
T = 0.94%
Schedule for Computation Initial
of Fund Performance Data Invest of: $1,000
Offering
Government Obligations Tax-Mana Price/
Return Since Inception
ending 7/31/95 NAV= $1.00
FYE: July 31
DECLARED: MONTHLY
PAID: MONTHLY
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Begin Capital Reinvest Ending Total
Reinvest Period Dividend Gain Price Period Ending Invest
Dates Shares /Share /Share /Share Shares Price Value
5/31/95 1000.000 0.000319716 0.00000 $1.00 1000.320 $1.00 $1,000.32
6/30/95 1000.320 0.004552654 0.00000 $1.00 1004.874 $1.00 $1,004.87
7/31/95 1004.874 0.004563572 0.00000 $1.00 1009.460 $1.00 $1,009.46
</TABLE>
$1,000 (1+T) = End Value
T = 0.95%
Schedule for computation of Yield Calculation
Government Obligations Tax-Managed Fund
(Insititutional Service Shares) 31-Jul-95
This example illustrates the yield quotation
for the seven-day period ended:
Value of a hypothetical pre-existing account with exactly
one share at the beginning of the base period
Value of same account (excluding capital
changes) at end $1.001023695
of the seven-day base period* $0.001023695
Net change in account value
Base Period Return:
Net change in account value divided by the
beginning account value $0.001023695
($ .000458656 / $1.000000000)
5.34%
Annualized Current Net Yield ( .001023695 x 365/7)
5.48%
Effective Yield ** (.001023695 + 1 ) (365/7) - 1
* This value includes the value of additional shares
purchased with dividends from the original share,
and dividends declared on both the original share
and any such additional shares.
** This value may change to include shares purchased
with dividends reinvested on a less frequent basis.
EXHIBIT (2) UNDER FORM N-1A
EXHIBIT 3(B) UNDER ITEM 601/REG. SK
MONEY MARKET OBLIGATIONS TRUST
BY-LAWS
TABLE OF CONTENTS
Page
ARTICLE I: OFFICERS AND THEIR ELECTION............................. 1
Section 1 Officers .......................................... 1
Section 2 Election of Officers .............................. 1
Section 3 Resignations and Removals and Vacancies ........... 1
ARTICLE II: POWERS AND DUTIES OF TRUSTEES AND OFFICERS.............. 1
Section 1 Chairman of the Trustees ("Chairman") ............. 1
Section 2 President ......................................... 1
Section 3 Vice President .................................... 1
Section 4 Secretary ......................................... 1
Section 5 Treasurer ......................................... 2
Section 6 Assistant Vice President .......................... 2
Section 7 Assistant Secretaries and Assistant
Treasurers ...................................... 2
Section 8 Salaries .......................................... 2
ARTICLE III: POWERS AND DUTIES OF THE EXECUTIVE
AND OTHER COMMITTEES ................................. 2
Section 1 Executive and Other Committees .................... 2
Section 2 Vacancies in Executive Committee .................. 2
Section 3 Executive Committee to Report to Trustees ......... 3
Section 4 Procedure of Executive Committee .................. 3
Section 5 Powers of Executive Committee ..................... 3
Section 6 Compensation ...................................... 3
Section 7 Informal Action by Executive Committee or
Other Committee ................................. 3
ARTICLE IV: SHAREHOLDERS MEETINGS................................... 3
Section 1 Special Meetings .................................. 3
Section 2 Notices ........................................... 3
Section 3 Place of Meeting .................................. 4
Section 4 Action by Consent ................................. 4
Section 5 Proxies ........................................... 4
-i-
Page
ARTICLE V: TRUSTEES MEETINGS....................................... 4
Section 1 Special Meetings .................................. 4
Section 2 Regular Meetings .................................. 4
Section 3 Quorum and Vote ................................... 4
Section 4 Notices ........................................... 4
Section 5 Place of Meeting .................................. 5
Section 6 Telephonic Meeting ................................ 5
Section 7 Special Action .................................... 5
Section 8 Action by Consent ................................. 5
Section 9 Compensation of Trustees .......................... 5
ARTICLE VI: SHARES.................................................. 5
Section 1 Certificates ...................................... 5
Section 2 Transfer of Shares ................................ 5
Section 3 Equitable Interest Not Recognized ................. 6
Section 4 Lost, Destroyed or Mutilated Certificates ......... 6
Section 5 Transfer Agent and Registrar: Regulations ......... 6
ARTICLE VII: INSPECTION OF BOOKS..................................... 6
ARTICLE VIII: AGREEMENTS, CHECKS, DRAFTS, ENDORSEMENTS, ETC........... 6
Section 1 Agreements, Etc ................................... 6
Section 2 Checks, Drafts, Etc ............................... 6
Section 3 Endorsements, Assignments and Transfer of
Securities ...................................... 7
Section 4 Evidence of Authority ............................. 7
ARTICLE IX: INDEMNIFICATION OF TRUSTEES AND OFFICERS
Section 1 General ........................................... 7
Section 2 No Indemnification ................................ 7
Section 3 Conditions for Indemnification .................... 7
Section 4 Advancement of Expenses ........................... 7
Section 5 Non-Exclusivity ................................... 8
-ii-
Page
ARTICLE X: SEAL.................................................... 8
ARTICLE XI: FISCAL YEAR............................................. 8
ARTICLE XII: AMENDMENTS.............................................. 8
ARTICLE XIII: WAIVERS OF NOTICE....................................... 8
ARTICLE XIV: REPORT TO SHAREHOLDERS.................................. 8
ARTICLE XV: BOOKS AND RECORDS....................................... 9
ARTICLE XVI: TERMS................................................... 9
-iii-
BY-LAWS
ARTICLE I
OFFICERS AND THEIR ELECTION
Section 1. Officers. The officers of the Trust shall be a Chairman of
the Trustees, a President, one or more Vice Presidents, a Treasurer, a
Secretary and such other officers as the Trustees may from time to time
elect. It shall not be necessary for any Trustee or other officer to be a
holder of shares in any Series or Class of the Trust.
Section 2. Election of Officers. The President, Vice President(s),
Treasurer and Secretary shall be chosen annually by the Trustees. The
Chairman of the Trustees shall be chosen annually by and from the Trustees.
Two or more offices may be held by a single person except the offices of
President and Secretary. The officers shall hold office until their
successors are chosen and qualified.
Section 3. Resignations and Removals and Vacancies. Any officer of the
Trust may resign by filing a written resignation with the Chairman of the
Trustees or with the Trustees or with the Secretary, which shall take effect
on being so filed or at such time as may be therein specified. The Trustees
may remove any officer, with or without cause, by a majority vote of all of
the Trustees. The Trustees may fill any vacancy created in any office
whether by resignation, removal or otherwise.
ARTICLE II
POWERS AND DUTIES OF TRUSTEES AND OFFICERS
Section 1. Chairman of the Trustees ("Chairman"). The Chairman shall
be the chief executive officer of the Trust. He shall have general
supervision over the business of the Trust and policies of the Trust. He
shall employ and define the duties of all employees of the Trust, shall have
power to discharge any such employees, shall exercise general supervision
over the affairs of the Trust and shall perform such other duties as may be
assigned to him from time to time by the Trustees. He shall preside at the
meetings of shareholders and of the Trustees. The Chairman shall appoint a
Trustee or officer to preside at such meetings in his absence.
Section 2. President. The President, in the absence of the Chairman,
shall perform all duties and may exercise any of the powers of the Chairman
subject to the control of the other Trustees. He shall counsel and
advise the Chairman on matters of major importance and shall perform such
other duties as may be assigned to him from time to time by the Trustees, the
Chairman or the Executive Committee.
Section 3. Vice President. The Vice President (or if more than one,
the senior Vice President) in the absence of the President shall perform all
duties and may exercise any of the powers of the President subject to the
control of the Trustees. Each Vice President shall perform such other duties
as may be assigned to him from time to time by the Trustees, the Chairman or
the Executive Committee. ? ? ? Each Vice President shall be authorized to
sign documents on behalf of the Trust.
Section 4. Secretary. The Secretary shall be the chief legal officer
of the Trust responsible for providing legal guidance to the Trust. The
Secretary shall keep or cause to be kept in books provided for that purpose
the Minutes of the Meetings of Shareholders and of the Trustees; shall see
that all Notices are duly given in accordance with the provisions of these By-
Laws and as required by law; shall be custodian of the records and of the
Seal of the Trust and see that the Seal is affixed to all documents, the
execution of which on behalf of the Trust under its Seal is duly authorized;
shall keep directly or through a transfer agent a register of the post office
address of each shareholder of each Series or Class of the Trust, and make
all proper changes in such register, retaining and filing his authority for
such entries; shall see that the books, reports, statements, certificates and
all other documents and records required by law are properly kept and filed;
and in general shall perform all duties incident to the Office of Secretary
and such other duties as may from time to time be assigned to him by the
Trustees, Chairman or the Executive Committee.
Section 5. Treasurer. The Treasurer shall be the principal financial
and accounting officer of the Trust responsible for the preparation and
maintenance of the financial books and records of the Trust. He shall
deliver all funds and securities belonging to any Series or Class to such
custodian or sub-custodian as may be employed by the Trust for any Series or
Class. The Treasurer shall perform such duties additional to the foregoing
as the Trustees, Chairman or the Executive Committee may from time to time
designate.
Section 6. Assistant Vice President. The Assistant Vice President or
Vice Presidents of the Trust shall have such authority and perform such
duties as may be assigned to them by the Trustees, the Executive Committee or
the Chairman.
Section 7. Assistant Secretaries and Assistant Treasurers. The
Assistant Secretary or Secretaries and the Assistant Treasurer or Treasurers
shall perform the duties of the Secretary and of the Treasurer, respectively,
in the absence of those Officers and shall have such further powers and
perform such other duties as may be assigned to them respectively by the
Trustees or the Executive Committee or the Chairman.
Section 8. Salaries. The salaries of the Officers shall be fixed from
time to time by the Trustees. No officer shall be prevented from receiving
such salary by reason of the fact that he is also a Trustee.
ARTICLE III
POWERS AND DUTIES OF THE
EXECUTIVE AND OTHER COMMITTEES
Section 1. Executive and Other Committees. The Trustees may elect from
their own number an Executive Committee to consist of not less than two
members. The Executive Committee shall be elected by a resolution passed by
a vote of at least a majority of the Trustees then in office. The Trustees
may also elect from their own number other committees from time to time, the
number composing such committees and the powers conferred upon the same to be
determined by vote of the Trustees.
Section 2. Vacancies in Executive Committee. Vacancies occurring in
the Executive Committee from any cause shall be filled by the Trustees by a
resolution passed by the vote of at least a majority of the Trustees then in
office.
-2-
Section 3. Executive Committee to Report to Trustees. All action by
the Executive Committee shall be reported to the Trustees at their meeting
next succeeding such action.
Section 4. Procedure of Executive Committee. The Executive Committee
shall fix its own rules of procedure not inconsistent with these By-Laws or
with any directions of the Trustees. It shall meet at such times and places
and upon such notice as shall be provided by such rules or by resolution of
the Trustees. The presence of a majority shall constitute a quorum for the
transaction of business, and in every case an affirmative vote of a majority
of all the members of the Committee present shall be necessary for the taking
of any action.
Section 5. Powers of Executive Committee. During the intervals between
the Meetings of the Trustees, the Executive Committee, except as limited by
the By-Laws of the Trust or by specific directions of the Trustees, shall
possess and may exercise all the powers of the Trustees in the management and
direction of the business and conduct of the affairs of the Trust in such
manner as the Executive Committee shall deem to be in the best interests of
the Trust, and shall have power to authorize the Seal of the Trust to be
affixed to all instruments and documents requiring same. Notwithstanding the
foregoing, the Executive Committee shall not have the power to elect
Trustees, increase or decrease the number of Trustees, elect or remove any
Officer, declare dividends, issue shares or recommend to shareholders any
action requiring shareholder approval.
Section 6. Compensation. The members of any duly appointed committee
shall receive such compensation and/or fees as from time to time may be fixed
by the Trustees.
Section 7. Informal Action by Executive Committee or Other Committee.
Any action required or permitted to be taken at any meeting of the Executive
Committee or any other duly appointed Committee may be taken without a
meeting if a consent in writing setting forth such action is signed by all
members of such committee and such consent is filed with the records of the
Trust.
ARTICLE IV
SHAREHOLDERS MEETINGS
Section 1. Special Meetings. A special meeting of the shareholders of
the Trust or of a particular Series or Class shall be called by the Secretary
whenever ordered by the Trustees, the Chairman or requested in writing by the
holder or holders of at least one-tenth of the outstanding shares of the
Trust or of the relevant Series or Class, entitled to vote. If the
Secretary, when so ordered or requested, refuses or neglects for more than
two days to call such special meeting, the Trustees, Chairman or the
shareholders so requesting may, in the name of the Secretary, call the
meeting by giving notice thereof in the manner required when notice is given
by the Secretary.
Section 2. Notices. Except as above provided, notices of any special
meeting of the shareholders of the Trust or a particular Series or Class,
shall be given by the Secretary by delivering or mailing, postage prepaid, to
each shareholder entitled to vote at said meeting, a written or printed
notification of such meeting, at least fifteen days before the meeting, to
such address as may be registered with the Trust by the shareholder.
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Section 3. Place of Meeting. Meetings of the shareholders of the Trust
or a particular Series or Class, shall be held at the principal place of
business of the Trust in Pittsburgh, Pennsylvania, or at such place within or
without The Commonwealth of Massachusetts as fixed from time to time by
resolution of the Trustees.
Section 4. Action by Consent. Any action required or permitted to be
taken at any meeting of shareholders may be taken without a meeting, if a
consent in writing, setting forth such action, is signed by all the
shareholders entitled to vote on the subject matter thereof, and such consent
is filed with the records of the Trust.
Section 5. Proxies. Any shareholder entitled to vote at any meeting of
shareholders may vote either in person or by proxy. Every proxy shall be in
writing subscribed by the shareholder or his duly authorized attorney and
dated, but need not be sealed, witnessed or acknowledged. All proxies shall
be filed with and verified by the Secretary or an Assistant Secretary of the
Trust or, the person acting as Secretary of the Meeting.
ARTICLE V
TRUSTEES MEETINGS
Section 1. Special Meetings. Special meetings of the Trustees shall be
called by the Secretary at the written request of the Chairman or any
Trustee, and if the Secretary when so requested refuses or fails for more
than twenty-four hours to call such meeting, the Chairman or such Trustee may
in the name of the Secretary call such meeting by giving due notice in the
manner required when notice is given by the Secretary.
Section 2. Regular Meetings. Regular meetings of the Trustees may be
held without call or notice at such places and at such times as the Trustees
may from time to time determine, provided that any Trustee who is absent when
such determination is made shall be given notice of the determination.
Section 3. Quorum and Vote. A majority of the Trustees shall
constitute a quorum for the transaction of business. The act of a majority
of the Trustees present at any meeting at which a quorum is present shall be
the act of the Trustees unless a greater proportion is required by the
Declaration of Trust or these By-Laws or applicable law. In the absence of a
quorum, a majority of the Trustees present may adjourn the meeting from time
to time until a quorum shall be present. Notice of any adjourned meeting
need not be given.
Section 4. Notices. It shall be sufficient notice of a special meeting
to send notice by mail to a Trustee at least forty-eight hours or by
telegram, telex or telecopy or other electronic facsimile transmission method
at least twenty-four hours before the meeting addressed to the Trustee at his
usual or last known business or residence address or to give notice to such
Trustee in person or by telephone at least twenty-four hours before the
meeting. Notice of a meeting need not be given to any Trustee if a written
waiver of notice, executed by such Trustee before the meeting, is filed with
the records of the meeting, or to any Trustee who attends the meeting without
protesting the lack of notice to such Trustee prior thereto or at its
commencement. Subject to compliance with Section 15(c) of the 1940 Act,
notice or waiver of notice need not specify the purpose of any special
meeting.
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Section 5. Place of Meeting. Meetings of the Trustees shall be held at
the principal place of business of the Trust in Pittsburgh, Pennsylvania, or
at such place within or without The Commonwealth of Massachusetts as fixed
from time to time by resolution of the Trustees, or as the person or persons
requesting said meeting to be called may designate, but any meeting may
adjourn to any other place.
Section 6. Telephonic Meeting. Subject to compliance with Sections
15(c) and 32(a) of the 1940 Act, if it is impractical for the Trustees to
meet in person, the Trustees may meet by means of a telephone conference
circuit to which all Trustees are connected or of which all Trustees shall
have waived notice, which meeting shall be deemed to have been held at a
place designated by the Trustees at the meeting.
Section 7. Special Action. When all the Trustees shall be present at
any meeting, however called, or whenever held, or shall assent to the holding
of the meeting without notice, or after the meeting shall sign a written
assent thereto on the record of such meeting, the acts of such meeting shall
be valid as if such meeting had been regularly held.
Section 8. Action by Consent. Any action by the Trustees may be taken
without a meeting if a written consent thereto is signed by all the Trustees
and filed with the records of the Trustees' meetings. Such consent shall be
treated as a vote of the Trustees for all purposes.
Section 9. Compensation of Trustees. The Trustees may receive a stated
salary for their services as Trustees, and by resolution of Trustees a fixed
fee and expenses of attendance may be allowed for attendance at each Meeting.
Nothing herein contained shall be construed to preclude any Trustee from
serving the Trust in any other capacity, as an officer, agent or otherwise,
and receiving compensation therefor.
ARTICLE VI
SHARES
Section 1. Certificates. All certificates for shares shall be signed
by the Chairman, President or any Vice President and by the Treasurer or
Secretary or any Assistant Treasurer or Assistant Secretary and sealed with
the seal of the Trust. The signatures may be either manual or facsimile
signatures and the seal may be either facsimile or any other form of seal.
Certificates for shares for which the Trust has appointed an independent
Transfer Agent and Registrar shall not be valid unless countersigned by such
Transfer Agent and registered by such Registrar. In case any officer who has
signed any certificate ceases to be an officer of the Trust before the
certificate is issued, the certificate may nevertheless be issued by the
Trust with the same effect as if the officer had not ceased to be such
officer as of the date of its issuance. Share certificates of each Series or
Class shall be in such form not inconsistent with law or the Declaration of
Trust or these By-Laws as may be determined by the Trustees.
Section 2. Transfer of Shares. The shares of each Series and Class of
the Trust shall be transferable, so as to affect the rights of the Trust or
any Series or Class, only by transfer recorded on the books of the Trust or
its transfer agent, in person or by attorney.
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Section 3. Equitable Interest Not Recognized. The Trust shall be
entitled to treat the holder of record of any share or shares of a Series or
Class as the absolute owner thereof and shall not be bound to recognize any
equitable or other claim or interest in such share or shares of a Series or
Class on the part of any other person except as may be otherwise expressly
provided by law.
Section 4. Lost, Destroyed or Mutilated Certificates. In case any
certificate for shares is lost, mutilated or destroyed, the Trustees may
issue a new certificate in place thereof upon indemnity to the relevant
Series or Class against loss and upon such other terms and conditions as the
Trustees may deem advisable.
Section 5. Transfer Agent and Registrar: Regulations. The Trustees
shall have power and authority to make all such rules and regulations as they
may deem expedient concerning the issuance, transfer and registration of
certificates for shares and may appoint a Transfer Agent and/or Registrar of
certificates for shares of each Series or Class, and may require all such
share certificates to bear the signature of such Transfer Agent and/or of
such Registrar.
ARTICLE VII
INSPECTION OF BOOKS
The Trustees shall from time to time determine whether and to what
extent, and at what times and places, and under what conditions and
regulations the accounts and books of the Trust maintained on behalf of each
Series and Class or any of them shall be open to the inspection of the
shareholders of any Series or Class; and no shareholder shall have any right
of inspecting any account or book or document of the Trust except that, to
the extent such account or book or document relates to the Series or Class in
which he is a Shareholder or the Trust generally, such Shareholder shall have
such right of inspection as conferred by laws or authorized by the Trustees
or by resolution of the Shareholders of the relevant Series or Class.
ARTICLE VIII
AGREEMENTS, CHECKS, DRAFTS, ENDORSEMENTS, ETC.
Section 1. Agreements, Etc. The Trustees or the Executive Committee
may authorize any Officer or Agent of the Trust to enter into any Agreement
or execute and deliver any instrument in the name of the Trust on behalf of
any Series or Class, and such authority may be general or confined to
specific instances; and, unless so authorized by the Trustees or by the
Executive Committee or by these By-Laws, no Officer, Agent or Employee shall
have any power or authority to bind the Trust by any Agreement or engagement
or to pledge its credit or to render it liable pecuniarily for any purpose or
for any amount.
Section 2. Checks, Drafts, Etc. All checks, drafts, or orders for the
payment of money, notes and other evidences of indebtedness shall be signed
by such Officers, Employees, or Agents, as shall from time to time be
designated by the Trustees or the Executive Committee, or as may be specified
in or pursuant to the agreement between the Trust on behalf of any Series or
Class and the custodian appointed, pursuant to the provisions of the
Declaration of Trust.
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Section 3. Endorsements, Assignments and Transfer of Securities. All
endorsements, assignments, stock powers, other instruments of transfer or
directions for the transfer of portfolio securities, whether or not
registered in nominee form, or belonging to any Series or Class shall be made
by such Officers, Employees, or Agents as may be authorized by the Trustees
or the Executive Committee.
Section 4. Evidence of Authority. Anyone dealing with the Trust shall
be fully justified in relying on a copy of a resolution of the Trustees or of
any committee thereof empowered to act in the premises which is certified as
true by the Secretary or an Assistant Secretary under the seal of the Trust.
ARTICLE IX
INDEMNIFICATION OF TRUSTEES AND OFFICERS
Section 1. General. Every person who is or has been a Trustee or
officer of the Trust and persons who serve at the Trust's request as
director,
officer, trustee, partner or fiduciary of another corporation, partnership,
joint venture, trust or other enterprise shall be indemnified by the Trust
(or the appropriate Series or Class, where such Trustee or officer is acting
on behalf of or with respect to a single Series or Class) to the fullest
extent permitted by law against liability and all expenses, including amounts
incurred in satisfaction of judgments, settlements, compromises, fines,
penalties, and counsel fees reasonably incurred or paid by him in connection
with any debt, claim, action, demand, suit or proceeding of any kind, whether
civil or criminal, in which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee or officer of the Trust or his
serving or having served as a director, officer, trustee, partner or
fiduciary of another corporation, partnership, joint venture, trust or other
enterprise at the request of the Trust; provided that the Trust shall
indemnify any such person seeking indemnification in connection with a
proceeding initiated by such person only if such proceeding was authorized by
the Board of Trustees.
Section 2. No Indemnification. No indemnification shall be provided
hereunder to a Trustee or officer against any liability to the Trust or any
Series or Class or the Shareholders of any Series or Class by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of his office.
Section 3. Conditions for Indemnification. Except as provided in
Section 4 hereof, in the absence of a final decision on the merits by a court
or other body before which such proceeding was brought, an indemnification
payment will not be made, unless a reasonable determination based upon a
factual review has been made by a majority vote of a quorum of non-party
trustees who are not interested persons of the Trust, or by independent legal
counsel in a written opinion that the indemnitee was not liable for an act of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
duties.
Section 4. Advancement of Expenses. The Trust shall pay the expenses
incurred in the defense of a proceeding in advance of its final disposition
(upon undertaking for repayment unless it is ultimately determined that
indemnification is appropriate) if at least one of the following conditions
is fulfilled: (i) the indemnitee provides security for his undertaking, (ii)
the Trust or any relevant Series or Class is insured against any loss arising
by
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reason of any lawful advance or (iii) a majority of a quorum of disinterested
non-party trustees or independent legal counsel in a written opinion makes a
factual determination that there is reason to believe the indemnitee will be
entitled to indemnification.
Section 5. Non-Exclusivity. Nothing contained in this Article shall
affect any rights to indemnification to which Trustees, officers or any
other persons may be entitled by contract or otherwise under law, nor the
power of the Trust to purchase and maintain insurance on their behalf.
ARTICLE X
SEAL
The seal of the Trust shall consist of a flat-faced die with the word
"Massachusetts", together with the name of the Trust and the year of its
organization cut or engraved thereon but, unless otherwise required by the
Trustees, the seal shall not be necessary to be placed on, and its absence
shall not impair the validity of, any document, instrument or other paper
executed and delivered by or on behalf of the Trust.
ARTICLE XI
FISCAL YEAR
The fiscal year of the Trust and each Series or Class shall be as
designated from time to time by the Trustees.
ARTICLE XII
AMENDMENTS
These By-Laws may be amended by a majority vote of all of the Trustees.
ARTICLE XIII
WAIVERS OF NOTICE
Whenever any notice whatever is required to be given under the
provisions of any statute of The Commonwealth of Massachusetts, or under the
provisions of the Declaration of Trust or these By-Laws, a waiver thereof in
writing, signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent thereto.
A notice shall be deemed to have been given if telegraphed, cabled, or sent
by wireless when it has been delivered to a representative of any telegraph,
cable or wireless company with instructions that it be telegraphed, cabled,
or sent by wireless. Any notice shall be deemed to be given if mailed at the
time when the same shall be deposited in the mail.
ARTICLE XIV
REPORT TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the shareholders of
each Series or Class a written financial report of the transactions of that
Series or Class including financial statements which shall at least annually
be certified by independent public accountants.
-8-
ARTICLE XV
BOOKS AND RECORDS
The books and records of the Trust and any Series or Class, including
the stock ledger or ledgers, may be kept in or outside The Commonwealth of
Massachusetts at such office or agency of the Trust as may from time to time
be determined by the Trustees.
ARTICLE XVI
TERMS
Terms defined in the Declaration of Trust and not otherwise defined
herein are used herein with the meanings set forth or referred to in the
Declaration of Trust.
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EXHIBIT 1 UNDER FORM N1-A
EXHIBIT 3(A) UNDER ITEM 601/REG. SK
MONEY MARKET OBLIGATIONS TRUST
Amendment No. 8
DECLARATION OF TRUST
dated October 3, 1988
THIS Declaration of Trust is amended as follows:
Strike the first paragraph of Section 5 of Article III from the
Declaration of Trust and substitute in its place the following:
"Section 5. Establishment and Designation of Series or Class.
Without limiting the authority of the Trustees set forth herein, to
establish and designate any additional series or class or to modify the
rights or preferences of any existing series or class, the series and
classes have been established and designated as:
Automated Cash Management Trust
Government Obligations Fund
Institutional Shares
Institutional Service Shares
Government Obligations Tax Managed Fund
Institutional Shares
Institutional Service Shares
Prime Obligations Fund
Institutional Shares
Institutional Service Shares
Tax-Free Obligations Fund
Institutional Shares
Institutional Service Shares
Treasury Obligations Fund
Institutional Shares
Institutional Service Shares
The establishment and designation of any series or class of shares in
addition to those established and designated above shall be effective
upon the execution by a majority of the then Trustees, without the need
for Shareholder approval, of an amendment to this Declaration of Trust,
taking the form of a complete restatement or otherwise, setting forth
such establishment and designation and the relative rights and
preferences of any such series or class, or as otherwise provided in
such instrument."
The undersigned Assistant Secretary of Money Market Obligations Trust
hereby certifies that the above-stated Amendment is a true and correct
Amendment to the Declaration of Trust, as adopted by the Board of Trustees
on the 28th day of December, 1994.
WITNESS the due execution hereof this 28th day of December, 1994.
/s/ Jeanette Fisher Garber
Jeannette Fisher-Garber
Assistant Secretary
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EXHIBIT 5 UNDER FORM N-1A
EXHIBIT 10 UNDER ITEM 601/REG SK
MONEY MARKET OBLIGATIONS TRUST
INVESTMENT ADVISORY CONTRACT
This Contract is made between FEDERATED MANAGEMENT, An investment
adviser registered under the Investment Advisers Act of 1940 having its
principal place of business in Pittsburgh, Pennsylvania (the "Adviser"),
and MONEY MARKET OBLIGATIONS TRUST, a Massachusetts business trust
having its principal place of business in Pittsburgh, Pennsylvania (the
"Trust").
WHEREAS, the Trust is an open-end management investment company as
that term is defined in the Investment Company Act of 1940 (the
"Act") and is registered as such with the Securities and Exchange
Commission; and
WHEREAS, the Adviser is engaged in the business of rendering
investment advisory and management services.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. The Trust hereby appoints Adviser as Investment Adviser for
each of the portfolios ("Funds") of the Trust on whose behalf the Trust
executes an exhibit to this Contract, and Adviser, by its execution of
each such exhibit, accepts the appointments. Subject to the direction
of the Trustees of the Trust, Adviser shall provide investment research
and supervision of the investments of each of the Funds and conduct a
continuous program of investment evaluation and of appropriate sale or
other disposition and reinvestment of each Fund's assets.
2. Adviser, in its supervision of the investments of each of the
Fund will be guided by each of the Fund's fundamental investment
policies and the provisions and restrictions contained in the
Declaration of Trust and By-Laws of the Trust and as set forth in the
Registration Statement and exhibits as may be on file with the
Securities and Exchange Commission.
3. The Trust shall pay or cause to be paid, on behalf of each
Fund, all of the Fund's expenses and the Fund's allocable share of
Trust expenses, including without limitation, the expenses of organizing
the Trust and continuing its existence; fees and expenses of officers
and Trustees of the Trust; fees for investment advisory services and
personnel and administrative services; fees and expenses of preparing
and its Registration Statements under the Securities Act of 1933 Act and
any amendments thereto; expenses of registering and qualifying the
Trust, the Funds and shares of the Funds ("Shares") under Federal and
state laws and regulations; expenses of preparing, printing and
distributing prospectuses (and any amendments thereto) and sales
literature to current shareholders; interest expense, taxes, fees and
commissions of every kind; expenses of issue (including cost of Share
certificates), purchase, repurchase and redemption of Shares, including
expenses attributable to a program of periodic issue; charges and
expenses of custodians, transfer agents, dividend disbursing agents,
shareholder servicing agents and registrars; printing and mailing costs,
auditing, accounting and legal expenses; reports to shareholders and
governmental officers and commissions; expenses of meetings of Trustees
and shareholders and proxy solicitations therefor; insurance expenses;
association membership dues; and such nonrecurring items as may arise,
including all losses and liabilities incurred in administering the Trust
and the Funds. The Trust will also pay each Fund's allocable share of
such extraordinary expenses as may arise, including expenses incurred in
connection with litigation, proceedings, and claims and the legal
obligations of the Trust to indemnify its officers, Trustees, employees,
distributors, and agents with respect thereto.
4. The Trust, on behalf of each of the Funds shall pay to
Adviser, for all services rendered to such Fund by Adviser hereunder,
the fees set forth in the exhibits attached hereto.
5. The Adviser may from time to time and for such periods as it
deems appropriate reduce its compensation (and, if appropriate, assume
expenses of one or more of the Funds) to the extent that any Fund's
expenses exceed such lower expense limitation as the Adviser may, by
notice to the Fund, voluntarily declare to be effective.
6. This Contract shall begin for each Fund on the date that the
Trust executes an exhibit to this Contract relating to such Fund. This
Contract shall remain in effect for each Fund until the first meeting of
Shareholders held after the execution date of an exhibit relating to the
respective Fund, and if approved at such meeting by the shareholders of
a particular Fund, shall continue in effect for such Fund for two years
from the date of its execution and from year to year thereafter, subject
to the provisions for termination and all of the other terms and
conditions hereof if: (a) such continuation shall be specifically
approved at least annually by the vote of a majority of the Trustees of
the Trust, including a majority of the Trustees who are not parties to
this Contract or interested persons of any such party (other than as
Trustees of the Trust) cast in person at a meeting called for that
purpose; and (b) Adviser shall not have notified the Trust in writing at
least sixty (60) days prior to the anniversary date of this Contract in
any year thereafter that it does not desire such continuation with
respect to that Fund.
7. Notwithstanding any provision in this Contract, it may be
terminated at any time with respect to any Fund, without the payment of
any penalty, by the Trustees of the Trust or by a vote of a majority of
the outstanding voting securities of that Fund, as defined in Section
2(a)(42) of the Act on sixty (60) days' written notice to Adviser.
8. This Contract may not be assigned by Adviser and shall
automatically terminate in the event of any assignment. Adviser may
employ or contract with such other person, persons, corporation or
corporations at its own cost and expense as it shall determine in order
to assist it in carrying out this Contract.
9. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties under this
Contract on the part of Adviser, Adviser shall not be liable to the
Trust or to any of the Funds or to any shareholder for any act or
omission in the course of or connected in any way with rendering
services or for any losses that may be sustained in the purchase,
holding or sale of any security.
10. This Contract may be amended at any time by agreement of the
parties provided that the amendment shall be approved both by the vote
of a majority of the Trustees of the Trust, including a majority of
Trustees who are not parties to this Contract or interested persons of
any such party to this Contract (other than as Trustees of the Trust),
cast in person at a meeting called for that purpose, and on behalf of a
Fund by a majority of the outstanding voting securities of such Fund as
defined in Section 2(a)(42) of the Act.
11. The Adviser acknowledges that all sales literature for
investment companies (such as the Trust) are subject to strict
regulatory oversight. The Adviser agrees to submit any proposed sales
literature for the Trust (or any Fund) or for itself or its affiliates
which mentions the Trust (or any Fund) to the Trust's distributor for
review and filing with the appropriate regulatory authorities prior to
the public release of any such sales literature. The Trust agrees to
cause its distributors to promptly review all such sales literature to
ensure compliance with relevant requirements, to promptly advise Adviser
of any deficiencies contained in such sales literature, to promptly file
complying sales literature with the relevant authorities, and to cause
such sales literature to be distributed to prospective investors in the
Trust.
12. Adviser is hereby expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust and
agrees that the obligations pursuant to this Contract of a particular
Fund and of the Trust with respect to that particular Fund be limited
solely to the assets of that particular Fund, and Adviser shall not seek
satisfaction of any such obligation from the assets of any other Fund,
the shareholders of any Fund, the Trustees, officers, employees or
agents of the Trust, or any of them.
13. This Contract shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
14. This Contract will become binding on the parties hereto upon
their execution of the attached exhibits to this Contract.
INVESTMENT ADVISORY CONTRACT
EXHIBIT A
GOVERNMENT OBLIGATIONS FUND
For all services rendered by Adviser hereunder, the Trust shall pay
to Adviser and Adviser agrees to accept as full compensation for all
services rendered hereunder, an annual investment advisory fee equal to
.20 of 1% of the average daily net assets of the Fund.
The fee shall be accrued daily at the rate of 1/365th of .20 of 1%
applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 11th day of December, 1989.
Attest: FEDERATED MANAGEMENT
/s/S. Elliott Cohan By:/s/ Mark L. Mallon
Assistant Secretary Exec. Vice
President
Attest: MONEY MARKET OBLIGATIONS TRUST
/s/Jeannette Fisher-Garber By:/s/J. Christopher Donahue
Assistant Secretary
President
INVESTMENT ADVISORY CONTRACT
EXHIBIT B
PRIME OBLIGATIONS FUND
For all services rendered by Adviser hereunder, the Trust shall pay
to Adviser and Adviser agrees to accept as full compensation for all
services rendered hereunder, an annual investment advisory fee equal to
.20 of 1% of the average daily net assets of the Fund.
The fee shall be accrued daily at the rate of 1/365th of .20 of 1%
applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 11th day of December, 1989.
Attest: FEDERATED MANAGEMENT
/s/S. Elliott Cohan By:/s/ Mark L. Mallon
Assistant Secretary Exec. Vice
President
Attest: MONEY MARKET OBLIGATIONS TRUST
/s/Jeannette Fisher-Garber By:/s/J. Christopher Donahue
Assistant Secretary
President
INVESTMENT ADVISORY CONTRACT
EXHIBIT C
PRIME PLUS OBLIGATIONS FUND
For all services rendered by Adviser hereunder, the Trust shall pay
to Adviser and Adviser agrees to accept as full compensation for all
services rendered hereunder, an annual investment advisory fee equal to
.20 of 1% of the average daily net assets of the Fund.
The fee shall be accrued daily at the rate of 1/365th of .20 of 1%
applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 11th day of December, 1989.
Attest: FEDERATED MANAGEMENT
/s/S. Elliott Cohan By:/s/ Mark L. Mallon
Assistant Secretary Exec. Vice
President
Attest: MONEY MARKET OBLIGATIONS TRUST
/s/Jeannette Fisher-Garber By:/s/J. Christopher Donahue
Assistant Secretary
President
The Prime Plus Obligations Fund was dissolved 2/28/91.
INVESTMENT ADVISORY CONTRACT
EXHIBIT D
TAX-FREE OBLIGATIONS FUND
For all services rendered by Adviser hereunder, the Trust shall pay
to Adviser and Adviser agrees to accept as full compensation for all
services rendered hereunder, an annual investment advisory fee equal to
.20 of 1% of the average daily net assets of the Fund.
The fee shall be accrued daily at the rate of 1/365th of .20 of 1%
applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 11th day of December, 1989.
Attest: FEDERATED MANAGEMENT
/s/S. Elliott Cohan By:/s/ Mark L. Mallon
Assistant Secretary Exec. Vice
President
Attest: MONEY MARKET OBLIGATIONS TRUST
/s/Jeannette Fisher-Garber By:/s/J. Christopher Donahue
Assistant Secretary
President
INVESTMENT ADVISORY CONTRACT
EXHIBIT E
TREASURY OBLIGATIONS FUND
For all services rendered by Adviser hereunder, the Trust shall pay
to Adviser and Adviser agrees to accept as full compensation for all
services rendered hereunder, an annual investment advisory fee equal to
.20 of 1% of the average daily net assets of the Fund.
The fee shall be accrued daily at the rate of 1/365th of .20 of 1%
applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 11th day of December, 1989.
Attest: FEDERATED MANAGEMENT
/s/S. Elliott Cohan By:/s/ Mark L. Mallon
Assistant Secretary Exec. Vice
President
Attest: MONEY MARKET OBLIGATIONS TRUST
/s/Jeannette Fisher-Garber By:/s/J. Christopher Donahue
Assistant Secretary
President
EXHIBIT F
INVESTMENT ADVISORY CONTRACT
TREASURY OBLIGATIONS CASH RESERVES
For all services rendered by Adviser hereunder, the Trust shall pay
to Adviser and Adviser agrees to accept as full compensation for all
services rendered hereunder, an annual investment advisory fee equal to
.20 of 1% of the average daily net assets of the Fund.
The fee shall be accrued daily at the rate of 1/365th of .20 of 1%
applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 18th day of February, 1992.
Attest: FEDERATED MANAGEMENT
/s/S. Elliott Cohan By:/s/ Mark L. Mallon
Assistant Secretary Exec. Vice
President
Attest: MONEY MARKET OBLIGATIONS TRUST
/s/Jeannette Fisher-Garber By:/s/J. Christopher Donahue
Assistant Secretary
President
Treasury Obligations Cash Reserves was dissolved 8/28/92.
EXHIBIT G
INVESTMENT ADVISORY CONTRACT
AUTOMATED CASH MANAGEMENT TRUST
For all services rendered by Adviser hereunder, the Trust shall pay
to Adviser and Adviser agrees to accept as full compensation for all
services rendered hereunder, an annual investment advisory fee equal to
0.50 of 1% of the average daily net assets of the Fund.
The fee shall be accrued daily at the rate of 1/365th of 0.50 of 1%
applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 1st day of June, 1994.
Attest: FEDERATED MANAGEMENT
/s/ S. Elliott Cohan By: /s/ William D. Dawson
Assistant Secretary Exec. Vice
President
Attest: MONEY MARKET OBLIGATIONS TRUST
/s/ Jeannette Fisher-Garber By: /s/ J. Christopher Donahue
Assistant Secretary
President
Exhibit (10) UNDER FORM N-1A
EXHIBIT 5 UNDER ITEM 601/REG. S-K
HOUSTON, HOUSTON & DONNELLY
ATTORNEYS AT LAW
2510 CENTRE CITY TOWER
WILLIAM McC. HOUSTON PITTSBURGH, PA. 15222
FRED CHALMERS HOUSTON, JR. __________
THOMAS J. DONNELLY
JOHN F. MECK (412) 471-5828 FRED CHALMERS HOUSTON
FAX (412) 471-0736 (1914 - 1971)
MARIO SANTILLI, JR.
THEODORE M. HAMMER
November 16, 1989
The Trustees of
Money Market Obligations Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
Money Market Obligations Trust ("Trust") proposes to offer and
sell shares of beneficial interest representing interest in a portfolio
of securities known as Treasury Obligations Fund ("Shares") in the
manner and on the terms set forth in its Registration Statement filed
with the Securities and Exchange Commission under the Securities Act of
1933, as amended.
As counsel we have participated in the organization of the Trust,
its registration under the Investment Company Act of 1940 and the
preparation and filing of its Registration Statement under the
Securities Act of 1933. We have examined and are familiar with the
provisions of the written Declaration of Trust dated October 3, 1988, as
amended, ("Declaration of Trust"), the Bylaws of the Trust and such
other documents and records deemed relevant. We have also reviewed
questions of law and consulted with counsel thereon as deemed necessary
or appropriate by us for the purposes of this opinion.
Based upon the foregoing, it is our opinion that:
1. The Trust is duly organized and validly existing pursuant to
the Declaration of Trust.
2. The Shares which are currently being registered by the
Registration Statement referred to above may be legally and validly
issued from time to time in accordance with the Declaration of Trust
upon receipt of consideration sufficient to comply with the provisions
of Article III, Section 3, of the Declaration of Trust and subject to
compliance with the Securities Act of 1933, as amended, the Investment
Company Act of 1940, as amended, and applicable state laws regulating
the sale of securities. Such Shares, when so issued, will be fully paid
and non-assessable.
We consent to your filing this opinion as an exhibit to the
Registration Statement referred to above and to any application or
registration statement filed under the securities laws of any of the
States of the United States. We further consent to the reference to our
firm under the caption "Legal Counsel" in the prospectus filed as a part
of such Registration Statement, applications and registration
statements.
Very truly yours,
HOUSTON, HOUSTON, & DONNELLY
By: /s/ Thomas J. Donnelly
TJD/heh
Exhibit (13) UNDER FORM N1-A
EXHIBIT 99 UNDER ITEM 601/REG. SK
FEDERATED ADMINISTRATIVE SERVICES, INC.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(412) 288-1900
December 5, 1989
Money Market Obligations Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
Federated Administrative Services, Inc. agrees to purchase 100,000
shares of Treasury Obligations Fund (a portfolio of Money Market
Obligations Trust) at the cost of $1.00 each. These shares are
purchased for investment purposes and Federated Administrative Services,
Inc. has no present intention of redeeming these shares.
Very truly yours,
/s/ Byron F. Bowman
Byron F. Bowman
Vice President and
Corporate Counsel
FEDERATED SHORT-INTERMEDIATE INCOME TRUST
DECLARATION OF TRUST
Dated October 3, 1988
DECLARATION OF TRUST made October 3, 1988 by John F. Donahue,
William J. Copeland, James E. Dowd, Lawrence D. Ellis, M.D., Edward L.
Flaherty, Jr., Glen R. Johnson, and John A. Staley, IV.
WHEREAS the Trustees desire to establish a trust fund for the
investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, The Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed under
this Declaration of Trust IN TRUST as herein set forth below.
ARTICLE I
NAMES AND DEFINITIONS
Section 1. Name. This Trust shall be known as the "FEDERATED
SHORT-INTERMEDIATE INCOME TRUST".
Section 2. Definitions. Wherever used herein, unless otherwise
required by the context or specifically provided:
(a) The terms "Affiliated Person," "Assignment," "Commission,"
"Interested Person," "Majority Shareholder Vote" (the 67% or 50%
requirement of the third sentence of Section 2(a)(42) of the 1940 Act,
meanings given them in the Investment Company Act of 1940, as amended
from time to time;
(b) The "Trust" refers to FEDERATED SHORT-INTERMEDIATE INCOME
TRUST
(c) "Accumulated Net Income" means the accumulated net income of
the Trust determined in the manner provided or authorized in Article X,
Section 3;
(d) "Shareholder" means a record owner of Shares of the Trust;
(e) The "Trustees" refer to the individual Trustees in their
capacity as Trustees hereunder of the Trust and their successor or
successors for the time being in office as such Trustees;
(f) "Shares" means the equal proportionate units of interest into
which the beneficial interest in the Trust shall be divided from time to
time and includes fractions of Shares as well as whole Shares; and
(g) The "1940 Act" refers to the Investment Company Act of 1940,
as amended from time to time.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous
source of managed investments primarily in securities.
ARTICLE III
BENEFICIAL INTEREST
Section 1. Shares of Beneficial Interest. The beneficial
interest in the Trust shall at all times be divided into transferable
Shares, without par value each of which shall represent an equal
proportionate interest in the Trust with each other Share outstanding,
none having priority or preference over another. The number of Shares
which may be issued is unlimited. The Trustees may from time to time
divide or combine the outstanding Shares into a greater or lesser number
without thereby changing the proportionate beneficial interest in the
Trust. Contributions to the Trust may be accepted for, and Shares shall
be redeemed as, whole Shares and/or fractions.
Section 2. Ownership of Shares. The ownership of Shares shall be
recorded in the books of the Trust or a transfer agent. The Trustees
may make such rules as they consider appropriate for the transfer of
shares and similar matter. The record books of the Trust or any
transfer agent, as the case may be, shall be conclusive as to who are
the holders of Shares and as to the number of Shares held from time to
time by each.
Section 3. Investment in the Trust. The Trustees shall accept
investments in the Trust from such persons and on such terms as they may
from time to time authorize. After the date of the initial contribution
of capital (which shall occur prior to the initial public offering of
Shares of the Trust), the number of Shares to represent the initial
contribution shall be considered as outstanding and the amount received
by the Trustees on account of the contribution shall be treated as an
asset of the Trust. Subsequent to such initial contribution of capital,
Shares (including Shares which may have been redeemed or repurchased by
the Trust) may be issued or sold at a price which will net the Trust,
before paying any taxes in connection with such issue or sale, not less
than the net asset value (as defined in Article X, Section 4) thereof;
provided, however, that the Trustees may in their discretion impose a
sales charge upon investments in the Trust.
Section 4. No Pre-exemptive Rights. Shareholders shall have no
pre-exemptive or other right to subscribe to any additional Shares or
other securities issued by the Trust or the Trustees.
ARTICLE IV
THE TRUSTEES'
Section 1. Management of the Trust. The business and affairs of
the Trust shall be managed by the Trustees, and they shall have all
powers necessary and desirable to carry out that responsibility. The
Trustees who shall serve until the election of Trustees at the 1988
Meeting of Shareholders shall be John F. Donahue, William J. Copeland,
James E. Dowd, Lawerence D. Ellis, M.D., Edward L. Flaherty, Jr., J.
Joseph Maloney, Jr., Gregor F. Meyer, Wesley W. Posvar, Majorie P.
Smuts, Glen R. Johnson, and John A. Staley, IV.
Section 2. Election of Trustees at 1988 Meeting of Shareholders.
In the year 1988, on a date fixed by the Trustees, which shall be
subsequent to the initial public offering of Shares of the Trust, the
Shareholders shall elect Trustees. The number of Trustees shall be
determined by the Trustees pursuant to Article IV, Section 6.
Section 3. Term of Office of Trustees. The Trustees shall hold
office during the lifetime of this Trust, and until its termination as
hereinafter provided; except (a) that any Trustee may resign his trust
by written instrument signed by him and delivered to other Trustees,
which shall take effect upon such delivery or upon such later date as is
specified therein; (b) that any Trustee may be removed at any time by
written instrument signed by at least two-thirds of the number of
Trustees prior to such removal, specifying the date when such removal
shall become effective; (c) that any Trustee who requests in writing to
be retired or who has become mentally or physically incapacitated may be
retired by written instrument signed by a majority of the other
Trustees, specifying the date of his retirement; and (d) a Trustee may
be removed at any special meeting of Shareholders of the Trust by a vote
of two-thirds of the outstanding Shares.
Section 4. Termination of Service and Appointment of Trustees.
In case of death, resignation, retirement, removal or mental or physical
incapacity of any of the Trustees, or in case a vacancy shall, by reason
of an increase in number, or for any other reason, exist, the remaining
Trustees shall fill such vacancy by appointing such other person as they
in their discretion shall see fit. Such appointment shall be effected
by the singing of a written instrument by a majority of the Trustees in
office. Within three months of such appointment to be mailed to each
Shareholder at his address as recorded on the books of the Trust. An
appointment of a Trustee may be made by the Trustees then in office and
notice thereof mailed to Shareholders as a foresaid in anticipation of a
vacancy to occur by random of retirement, resignation or increase in
number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date
of said retirement, resignation or increase in number of Trustees. As
soon as any Trustee so appointed shall have accepted this Trust, the
trust estate shall vest in new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall
be deemed a Trustee hereunder. Any appointment authorized by this
Section 4 is subject to the provisions of Section 16(a) of the 1940 Act.
Section 5. Temporary Absence of Trustee. Any Trustee may, by
power of attorney, delegate his power for a period not exceeding six
months at any one time to any other Trustee or Trustees, provided that
in no case shall less than two of the Trustees personally exercise the
other power hereunder except as herein otherwise expressly provided.
Section 6. Number of Trustees. The number of Trustees, not less
than three (3) nor more than twenty (20) serving hereunder at any time
shall be determined by the Trustees themselves.
Whenever a vacancy in the Board of Trustees shall occur, until
such vacancy is filled or while any Trustee is physically or mentally
incapacitated, the other Trustees shall have all the powers hereunder
and the certificate signed by a majority of the other Trustees of such
vacancy, absence or incapacity, shall be conclusive, provided, however,
that no vacancy which reduces the number of Trustees below three (3)
shall remain unfilled for a period longer than six calendar months.
Section 7. Effect of Death, Resignation, ect. of at Trustee. The
death, resignation, retirement, removal, or mental or physical
incapacity of the Trustees, or any one of them, shall not operate to
annul the Trust or to revoke any existing agency created pursuant to the
terms of this Declaration of Trust.
Section 8. Ownership of the Trust. The assets of the Trust shall
be held separate and apart from any assets now or hereafter held in any
capacity other than as Trustee hereunder by the Trustees or any
successor Trustee. All of the assets of the Trust shall at all times be
considered as vested in the Trustees. No Shareholder shall be deemed to
have a several ownership in any individual asset of the Trust or any
right of partition or possession thereof, but each Shareholder shall
have a proportionate undivided beneficial interest in the Trust.
ARTICLE V
POWERS OF THE TRUSTEES
Section 1. Powers. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do
any and all acts and to make and execute any and all contracts and
instruments that they may consider necessary or appropriate in
connection with the management of the Trust. The Trustees shall not be
bound or limited by present or future laws or customs in regard to trust
investments, but shall have full authority and power to make any and all
investment which they, in their uncontrolled discretion, shall deem
proper to accomplish the purpose of this Trust. Without limiting the
foregoing, the Trustees shall have the following specific powers and
authority, subject to any applicable limitation in this Declaration of
Trust or in the By-Laws of the Trust.
(a) To buy, and invest funds in their hands in, securities
including, but not limited to, common stocks, preferred stocks,
bonds, debentures, warrants and rights to purchase securities,
certificates of beneficial interest, money market instruments,
notes or other evidences or indebtedness issued by any corporate,
trust or association, domestic or foreign, or issued or guaranteed
by the United States of America or any agency or instrumentality
thereof, by government of any foreign country, by any State of the
United States, or by any political subdivision or agency or
instrumentality of any State or foreign country, or in "when-
issued" or "delayed-delivery" contracts for any such securities,
or in any repurchase agreement (agreements under which the seller
agrees at the time of sale to repurchase the security at an agreed
time and price), or retain Trust assets in cash, and from time to
time change the investments of the assets of the Trust;
(b) To adopt By-Laws not inconsistent with the Declaration
of Trust providing for the conduct of the business of the Trust
and to amend and repeal them to the extent that they do not
reserve that right to the Shareholders;
(c) To Elect and remove such officers and appoint and
terminate such agents as they consider appropriate;
(d) To appoint or otherwise engage a bank or trust company
as custodian of any assets of the Trust subject to any conditions
set forth in this Declaration of Trust or in the By-Laws;
(e) To appoint or otherwise engage transfer agents,
dividend disbursing agents, Shareholder servicing agents,
investment advisers, sub-investment adviser, principal
underwriters, administrative service agents, and such other agents
as the Trustees may from time to time appoint or otherwise engage;
(f) To provide for the distribution of interests of the
Trust either through a principal underwriter in the manner
hereinafter provided for or by the Trust itself, or both;
(g) To set record dates in the manner hereinafter provided
for;
(h) To delegate such authority as they consider desirable
to a committee or committees composed of Trustees, including
without limitation, an Executive Committee, or to any officers of
the Trust and to any agent, custodian or underwriter;
(i) To sell or exchange any or all of the assets of the
Trust, subject to the provisions of Article XII, Section 4(b)
hereof;
(j) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property;
and to execute and deliver powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such person
or persons such power and discretion with relation to securities
or property as the Trustees shall deem proper;
(k) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of
securities;
(l) To hold any security or property in a form not
indicating any trust, whether in bearer, unregistered or other
negotiable form; or either in its own name or in the name of a
custodian or a nominee or nominees, subject in either case to
proper safeguards according to the usual practice of Massachusetts
trust companies or investment companies;
(m) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporate or
concern, any security of which is held in the Trust; to consent to
any contract, lease, mortgage, purchase, or sale of property by
such corporation or concern, and to paycalls or subscriptions with
respect to any security held in the Trust;
(n) To engage in and to prosecute, compound, comprise,
abandon, or adjust, by arbitration, or otherwise, and actions,
suits, proceedings, disputes, claims, demands, and other things
relating to the Trust, and out of the assets of the Trust to pay,
or to satisfy, and debts, claims or expenses incurred in
connection therewith, including those of litigation, upon any
evidence that the Trustees may deem sufficient (such powers shall
include without limitation any actions, suits, proceedings,
disputes, claims demands and things relating to the Trust wherein
any of the Trustees may be named individually and the subject
matter of which arises by reason of business for or on behalf of
the Trust);
(o) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for;
(p) To borrow money but only as a temporary measure for
extra ordinary or emergency purposes and then (a) only in amounts
not in excess of 5% of the value of its total assets or (b) in any
amount up to one-third of the value of its total assets, including
the amount borrowed, in order to meet redemption requests without
immediately selling any portfolio securities. The Trust may also
enter into reverse repurchase agreement in amounts not in excess
of one-third of its total assets in order to meet redemption
requests without immediately selling any portfolio instruments.
The Trustees shall not pledge, mortgage or hypothecate the assets
of the Trust, except in connection with any borrowing described in
(a) and (b) herein and in amounts not in excess of the lesser of
the dollar amounts borrowed or 10% of the value of the Trust's
total assets at the time of such borrowing.
(q) From time to time issue and sell the Shares of the
Trust either for cash or for property whenever and in such amounts
as the Trustee may deem desirable, but subject to the limitation
set forth in Section 3 of Article III.
(r) To purchase insurance of any kind, including, without
limitation, insurance on behalf of any person who is or was a
Trustee, Officer, employee or agent of the Trust, or is or was
serving at the request of the Trust as a Trustee, Director,
Officer, agent or employee of another corporation, partnership,
joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity or
arising out of his status as such.
No one dealing with the Trustees shall be under any
obligation to make any inquiry concerning the authority of the
Trustees, or to see to the application of any payments made or
property transferred to the Trustees or upon their order.
Section 2. Principal Transactions. The Trustees shall not on
behalf of the Trust buy any securities (other than Shares of the Trust),
to or lend any assets of the Trust to, any Trustee or officer or
employee of the Trust or any firm of which any such Trustee or officer
is a member acting as principal unless permitted by the 1940 Act, but
the Trust may employ any such other party or any such person or firm or
company in which any such person is an interested person in any capacity
not prohibited by the 1940 Act.
Section 3. Trustees and officers as Shareholders. Any Trustee,
officer or other agent of the Trust may acquire, own and dispose of
shares of the Trust to the same extent as if he were not a Trustee,
officer or agent; and the Trustees may issue and sell or cause to be
issued or sold Shares of the Trust to and buy such Shares from any such
person or any firm or company in which he is an interested person
subject only to the general limitations herein contained as to the sale
and purchase of such Shares; and all subject to any restrictions which
may be contained in the By-Laws.
Section 4. Parties to Contract. The Trustees may enter into any
contract of the character described in Section 1,2,3, or 4 of Article
VII or in Article IX hereof or any other capacity not prohibited by the
1940 Act with any corporation, firm, trust or association, although one
or more of the shareholders, Trustees, officers, employees or agents of
the Trust or their affiliates may be an officer, director, Trustee,
shareholder or interested person of such other party to the contract,
and no such contract shall be invalidated or rendered voidable by reason
of the existence of any such relationship be liable merely by reason of
such relationship for any loss or expense to the Trust under to by
reason of said contract or accountable for any profit realized directly
or indirectly therefrom, in the absence of actual fraud. The same
person (including a firm, corporation, trust or association) may be the
other party to contracts entered into pursuant to Sections 1,2,3 and 4
of Article VII or Article IX or any other capacity deemed legal under
the 1940 Act, and any individual may be financially interested or
otherwise an interested person of persons who are parties to any or all
of the contracts mentioned in this Section 4.
ARTICLE VI
TRUSTEES' EXPENSES AND COMPENSATION
Section 1. Trustee Reimbursement. The Trustees shall be
reimbursed from the Trust estate for all of their expenses and
disbursements, including, without limitation, expenses of organizing the
Trust and continuing its existence; fees and expenses of Trustees and
officers of the Trust; fees for investment advisory services,
administrative services and principal underwriting services provided for
in Article VII, Sections 1,2 and 3; fees and expenses of preparing and
printing its Registration Statements under the Securities Act of 1933
and the Investment Company Act of 1940 and any amendments thereto;
expenses of registering and qualifying the Trust and its shares under
federal and state laws and regulations; expenses of preparing, printing
and distributing prospectuses and any amendments thereof sent to
shareholders, underwriters, broker-dealers and to investors who may be
considering the purchase of shares; expenses of registering, licensing
or other authorization of the Trust as a broker-dealer and of its
Officers as agents and salesmen under federal and state laws and
regulations; interest expense, taxes, fees and commissions of every
kind; expenses of issue (including cost of share certificates),
purchase, repurchase and redemption of shares, including expenses
attributable to a program of periodic issues; charges and expenses of
custodians, transfer agents, dividend disbursing agents, shareholder
servicing agents and registrars; printing and mailing costs; auditing,
accounting and legal expenses; reports to shareholders and governmental
officers and commissions; expenses of meetings of shareholders and proxy
solicitations therefor; insurance expenses; association membership dues
and nonrecurring items as may arise, including all losses and
liabilities by them incurred in administering the Trust, including
expenses incurred in connection with litigation, proceedings and claims
and the obligations of the Trust under Article XI hereof to indemnify
its Trustees, Officers, employees, shareholders and agents, and any
contract obligation to indemnify principal underwriters under Section 3
of Article VII and for the payment of such expenses, disbursements,
losses and liabilities, the Trustees shall have a lien on the Trustee
state prior to any rights or interests of the Shareholders thereto.
This section shall not preclude the Trust from directly paying any of
the aforementioned fees and expenses.
Section 2. Trustee Compensation. The Trustees shall be entitled
to compensation from the Trust for their respective services as
Trustees, to be determined from time to time by vote of the Trustees,
and the Trustees shall also determine the compensation of all Officers,
consultants and agents whom they may elect or appoint. The Trust may
pay any Trustee or any corporation, firm, trust or association of which
a Trustee is an interested person for services rendered to the Trust in
any capacity not prohibited by the 1940 Act, and such payments shall not
be deemed compensation for services as a Trustee under the first
sentence of this Section 2 of Article VI.
ARTICLE VII
INVESTMENT ADVISER, ADMINISTRATIVE SERVICES, PRINCIPAL UNDERWRITER AND
TRANSFER AGENT
Section 1. Investment Adviser. Subject to a Majority Shareholder Vote,
the Trustees may in their discretion from time to time enter into an
investment advisory contract whereby the other party to such contract
shall undertake to furnish the Trustees investment advisory services for
such Series or Class upon such terms and conditions and for such
compensation as the Trustees may in their discretion determine. Subject
to a Majority Shareholder Vote by the relevant Series or Class to the
extent such vote is required by law, the investment adviser may enter
into a sub-investment advisory contract to receive investment advice
and/or statistical and factual information from the sub-investment
adviser for such Series or Class upon such terms and conditions and for
such compensation as the Trustees, in their discretion, may agree.
Notwithstanding any provisions of this Declaration of Trust, the
Trustees may authorize the investment adviser or sub-investment adviser
or any person furnishing administrative personnel and services as set
forth in Article VII, Section 2 (subject to such general or specific
instructions as the Trustees may from time to time adopt) to effect
purchases, sales or exchanges of portfolio securities belonging to a
Series or Class on behalf of the Trustees or may authorize any officer,
employee or Trustee to effect such purchases, sales, or exchanges
pursuant to recommendations of the investment adviser (and all without
further action by the Trustees). Any such purchases, sales and
exchanges shall be deemed to have been authorized by the Trustees. The
Trustees may also authorize the investment adviser to determine what
firms shall be employed to effect transactions in securities for the
account of a Series or Class and to determine what firms shall
participate in any such transactions or shall share in commissions or
fees charged in connection with such transactions.
Section 2. Administrative Services. The Trustees may in their
discretion from time to time contract for administrative personnel and
services whereby the other party shall agree to provide the Trustees
administrative personnel and services to operate the Trust on a daily
basis, on such terms and conditions as the Trustees may in their
discretion determine. Such services may be provided by one or more
entities.
Section 3. Principal Underwriter. The Trustees may in their
discretion from time to time enter into an exclusive or nonexclusive
contract or contracts providing for the sale of the Shares of the Trust
to net the Trust not less than the amount provided in Article III,
Section 3 hereof, whereby the Trust may either agree to sell the Shares
to the other party to the contract or appoint such other party its sales
agent for such shares. In either case, the contract shall be on such
terms and conditions (including indemnification of principal
underwriters allowable under applicable law and regulation) as the
Trustees may in their discretion determine not inconsistent with the
provisions of this Article VII; and such contract may also provide for
the repurchase or sale of Shares of the Trust by such other party as
principal or as agent of the Trust and may provide that the other party
may maintain a market for shares of the Trust.
Section 4. Transfer Agent. The Trustees may in their discretion
from time to time enter into transfer agency and shareholder services
contracts whereby the other party shall undertake to furnish the
Trustees transfer agency and shareholder services. The contracts shall
be on such terms and conditions as the Trustees may in their discretion
determine not inconsistent with the provisions of this Declaration of
Trust or of the By-Laws. Such services may be provided by one or more
entities.
Section 5. Provisions and Amendments. Any contract entered into
pursuant to Sections 1 or 3 of this Article VII shall be consistent with
and subject to the requirements of Section 15 of the 1940 Act (including
any amendments thereof or other applicable Act of Congress hereafter
enacted) with respect to its continuance in effect, its termination and
the method of authorization and approval of such contract or renewal
thereof.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. The Shareholders shall have power to vote, (i) for the
election of Trustees as provided in Article IV, Section 2; (ii) for the
removal of Trustees as provided in Article IV, Section 3(d); (iii) with
respect to any investment adviser or sub-investment adviser as provided
in Article VII, Section 1; (iv) with respect to the amendment of this
Declaration of Trust as provided in Article XII, Section 7; and (v) to
the same extent as the shareholders of a Massachusetts business
corporate as to whether or not a court action, proceeding or claim
should be brought or whether or not a court action, proceeding or claim
should be brought or maintained derivatively or as a class action on
behalf of the Trust or the Shareholders; and (vi) with respect to such
additional matters relating to the Trust as may be required by law, by
this Declaration of Trust, or the By-Laws or as the Trustees may
consider desirable. Each whole Share shall be entitled to one vote as
to any matter on which it is entitled to vote, and each fractional Share
shall be entitled to appropriate fractional vote. There shall be no
cumulative voting in the election of Trustees. Shares may be voted in
person or by proxy. Until Shares are issued, the Trustees may exercise
all rights of Shareholders and may take any action required or permitted
by law, this Declaration of Trust or any By-Laws of the Trust to be
taken by Shareholders.
Section 2. Meetings. A Shareholders meeting shall be held as
specified in Section 2 of Article IV at the principal office of the
Trust or such other place as the Trustees may designate. Special
meetings of the Shareholders may be called by the Trustees of the Chief
Executive Officer of the Trust and shall be called by the Trustees upon
the written request of Shareholders owning at least one-tenth of the
outstanding Shares entitled to vote. Shareholders shall be entitled to
at least fifteen days' notice of any meeting.
Section 3. Quorum and Required Vote. Except as otherwise
provided by law, to constitute a quorum for the transaction of any
business at any meeting of Shareholders there must be present, in person
or by proxy, holders of one-fourth of the total number of Shares of the
Trust then outstanding and entitled to vote at such meeting. If a
quorum, as above defined, shall not be present for the purpose of any
vote that may properly come before the meeting, the Shareholders present
in person or by proxy and entitled to vote at such meeting on such
matter holding a majority of the Shares present entitled to vote on such
matter may by vote adjourn the meeting from time to time to be held at
the same place without further notice than by announcement to be given
at the meeting until a quorum, as above defined, entitled to vote on
such matter shall be present, whereupon any such matter may be voted
upon at the meeting as though held when originally convened. Subject to
any applicable requirement of law or of this Declaration of Trust or the
By-Laws, a plurality of the votes cast shall elect a Trustee and all
other matters shall be decided by a majority of the votes cast entitled
to vote thereon.
Section 4. Additional Provisions. The By-Laws may include
further provisions for Shareholders' votes and meeting and related
matters.
ARTICLE IX
CUSTODIAN
Section 1. Appointment and Duties. The Trustees shall appoint or
otherwise engage a bank or trust company having an aggregate capital,
surplus and undivided profits (as shown in its last published report) of
at least two million dollars ($2,000,000) as custodian with authority as
its agent, but may be contained in the By-Laws of the Trust:
(1) To receive and hold the securities owned by the Trust and
deliver the same upon written order;
(2) To receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as the
Trustees may direct; and
(3) To disburse such funds upon orders or vouchers;
(4) To keep the books and accounts of the Trust and furnish
clerical and accounting services;
(5) To compute, if authorized to do so by the Trustees, the
Accumulated Net Income of the Trust and the net asset value of the
Shares in accordance with the provisions hereof;
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian. If so directed by a Majority Shareholder
Vote, the custodian shall deliver and pay over all property of the Trust
held by it as specified in such vote.
The Trustees may also authorize the custodian to employ one or
more subcustodian from time to time to perform such of the acts and
services of the custodian and upon such terms and conditions, as may be
agreed upon between the custodian and such sub-custodian and approved by
the Trustees, provided that in every case such sub-custodian shall be a
bank or trust company organized under the laws of the United States or
one the states thereof and having an aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least
two million dollars ($2,000,000).
Section 2. Central Certificate System. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may
direct the custodian to deposit all or any part of the securities owned
by the Trust in a system for the central handling of securities
established by a national securities exchange or a national securities
association registered with the Commission under the Securities Exchange
Act of 1934, or such other person as may be permitted by the Commission
or otherwise in accordance with the 1940 Act as from time to time
amended, pursuant to which system all securities of any particular class
or series of any issuer deposited within the system are treated as
fungible and may be transferred or pledged by bookkeeping entry without
physical delivery of such securities, provided that all such deposits
shall be subject to withdrawal only upon the order of the custodian and
the direction of the Trustees.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions.
(a) The Trustees may from time to time declare and pay
dividends, and the amount of such dividends and the payment of them
shall be wholly in the discretion of the Trustees.
(b) The Trustees may, on each day Accumulated Net Income of
the Trust (as defined in Section 3 of this Article X) is determined and
is positive declare such Accumulated Net Income as a dividend to
Shareholders of record at such time as the Trustees shall designate,
payable in additional full and fractional Shares or in cash:
(c) The Trustees may distribute in respect of any fiscal
year as ordinary dividends and as capital gains distributions,
respectively, amounts sufficient to enable the Trust as a regulated
investment company to avoid any liability for general income taxes in
respect of that year.
(d) The decision of the Trustees as to what, in accordance with
good accounting practice, is incomes and what is principal shall be
final, and except as specifically provided herein the decision of the
Trustees as to what expenses and charges of the Trust shall be charged
against principal and what against the income shall be final. Any
income not distributed in any year may be invested from time to time in
the same manner as the principal funds of the Trust.
(e) The Trustees shall have power, to the fullest extent
permitted by the laws of Massachusetts, at any time, or from time to
time, to declare and cause to be paid dividends, which dividends, at the
election of the Trustees, may be accrued, automatically reinvested in
additional Shares (or fractions thereof) of the Trust or paid in cash or
additional Shares, all upon such terms and conditions as the Trustees
may prescribe.
(f) Anything in this instrument to the contrary notwithstanding,
the Trustees may at any time declare and distribute a dividend
consisting of shares of the Trust.
Section 2. Redemptions and Repurchases
(a) In case any Shareholder of record of the Trust at any time
desires to dispose of Shares recorded in his name, he may deposit a
written request (or such other form of request as the Trustees may from
time to time authorize) requesting that the Trust purchase his Shares,
together with such other instruments or authorizations to effect the
transfer as the Trustees may from time to time require, at the office of
the Custodian, and the Trust shall purchase his said Shares, but only at
the net asset value of such Shares (as defined in Section 4 of this
Article X) determined by or on behalf of the Trustees next after said
deposit.
Payment for such Shares shall be made by the Trust to the
Shareholder of record within seven (7) days after the date upon which
the request (and, if required, such other instruments or authorizations
of transfer) is deposited, subject to the right of the Trustees to
postpone the date of payment pursuant to Section 5 of this Article X.
If the redemption is postponed beyond the date on which it would
normally occur by reason of a declaration by the Trustees suspending the
right of redemption pursuant to Section 5 of this Article X, the right
of the Shareholder to have his Shares purchased by the Trust shall be
similarly suspended, and he may withdraw his request (or such other
instruments or authorizations of transfer) from deposit if he so elects;
or, if he does not so elect, the purchase prices shall be the net asset
value of his Shares, determined next after termination of such
suspension and payment therefor shall be made within seven (7) days
thereafter.
(b) The Trust may purchase Shares of the Trust by agreement with
the owner thereof (1) at a price not exceeding the net asset value per
Share determined next after the purchase or contract of purchase is made
or (2) at a price not exceeding the net asset value per Share determined
at some later time.
(c) Shares purchased by the Trust either pursuant to paragraph
(a) or paragraph (b) of this Section 2 shall be deemed treasury Shares
and may be resold by the Trust.
(d) The Trust may pay the redemption price in whole or in part by
a distribution in kind of securities from the portfolio of the Trust,
taking such securities at the same value employed in determining net
asset value, and selecting the securities in such manner as the Trustees
may deem fair and equitable.
Section 3. Determination of Accumulated Net Income. The
Accumulated Net Income of the Trust shall be determined by or on behalf
of the Trustees at such time or times as the Trustees shall in their
discretion determine. Such determination shall be made in accordance
with generally accepted accounting principles and practices and may
include realized and/or unrealized gains from the sale or other
disposition of securities or other property of the Trust. The power and
duty to determine Accumulated Net Income may be delegated by the
Trustees from time to time to one or more of the Trustees or officers of
the Trust, to the other party to any contract entered into pursuant to
Section 1 or 2 of Article VII, or to the custodian or to a transfer
agent.
Section 4. Net Asset Value of Shares. The net asset value of
each Share of the Trust outstanding shall be determined at such time or
times as may be determined by or behalf of the Trustees. The power and
duty to determine net asset value may be delegated by the Trustees from
time to time to one or more of the Trustees or Officers of the Trust, to
the other party to any contract entered into pursuant to Section 1 or 2
of Article VII or to the custodian or transfer agent.
The net asset value of each Share of the Trust as of any
particular time shall be the quotient (adjusted to the nearest cent)
obtained by dividing the value, as of such time, of the net assets of
the Trust (i.e., the value of the assets of the Trust less its
liabilities exclusive of capital and surplus) by the total number of
Shares outstanding (exclusive of treasury Shares) at such time in
accordance with the requirements of the 1940 Act and applicable
provisions of the By-Laws of the Trust in conformity with generally
accepted accounting practices and principles.
The Trustees may declare a suspension of the determination of net
asset value for the whole or any part of any period in accordance with
the Investment Company Act of 1940 and the rules and regulations adopted
thereunder.
Section 5. Suspension of the Right of Redemption. The Trustees
may declare a suspension of the right of redemption or postpone the date
of payment for the whole or any part of any period in accordance with
the Investment Company Act of 1940 and the rules and regulations adopted
thereunder.
Section 6. Trust's Right to Redeem Shares. The Trust shall have
the right to cause the redemption of Shares in any Shareholder's account
for their then current net asset value (which will be promptly paid to
the Shareholder in cash), if at any time the total investment in the
account does not have a minimum dollar value determined from time to
time by the Trustees in their sole discretion. Shares of the trust are
redeemable at the option of the Trust if, in the opinion of the
Trustees, ownership of Trust Shares has or may become concentrated to an
extent which would cause the Trust to be a personal holding company
within the meaning of the Federal Internal Revenue Code (and thereby
disqualified under Sub-chapter M of said Code); in such circumstances
the Trust may compel the redemption of Shares, reject any order for the
purchase of Shares or refuse to give effect to the transfer of Shares.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Limitation of Personal Liability and Indemnification
of Shareholders. The Trustees, officers, employees and agents of the
Trust shall have no power to bind any Shareholder personally or to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever, other than such as the Shareholder may at any time agree to
pay by way of subscription to any Shares or otherwise.
No Shareholder or former Shareholder of the Trust shall be liable
solely by reason of his being or having been a Shareholder for any debt,
claim, action, demand, suit, proceeding, judgment, decree, liability or
obligation of any kind against, or with respect to the Trust arising out
of any action taken or omitted for or on behalf of the Trust, and the
Trust shall be solely liable therefor and resort shall be had solely to
the Trust property for the payment or performance thereof.
Each Shareholder or former Shareholder of the Trust (or their
heirs, executors, administrators or other legal representatives or, in
case of a corporate entity, its corporate or general successor) shall be
entitled to indemnity and reimbursement out of the Trust property to the
full extent of such liability and the costs of any litigation or other
proceedings in which assume the defense of any claim made against any
Shareholder for any act or obligation of the Trust and satisfy any
judgment thereon.
Section 2. Limitation of Personal Liability of Trustees,
Officers, Employees or Agents of the Trust. No Trustee, officer,
employee or agent of the Trust shall have the power to bind any other
Trustee, officer, employee or agent of the Trust personally. The
Trustees, officers, employees or agents of the Trust incurring any
debts, liabilities or obligations, or in taking or omitting any other
actions for or in connection with the Trust are, and each shall be
deemed to be, acting as Trustee, officer, employee or agent of the Trust
and not in his own individual capacity.
Provided they have acted under the belief that their actions are
in the best interest of the Trust, the Trustee and officers shall not be
responsible for or liable in any event for neglect or wrong doing by
them or any officer, agent, employee, investment adviser or principal
underwriter of the Trust or of any entity providing administrative
services for the Trust, but nothing herein contained shall protect any
Trustee or officer against any liability to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Section 3. Express Exculpatory Clauses and Instruments. The
Trustees shall use every reasonable means to assure that all persons
having dealings with the Trust shall be informed that the property of
the Shareholders and the Trustees, officers, employees and agents of the
Trust shall not be subject to claims against or obligations of the Trust
to any extent whatsoever. The Trustees shall cause to be inserted in
any written agreement, undertaking or obligation made or issued on
behalf of the Trust (including certificates for Shares of the Trust) an
appropriate reference to this Declaration, providing that neither the
Shareholders, the Trustees, the officers, the employees nor any agent of
the Trust shall be liable thereunder, and that the other parties to such
instrument shall look solely to the Trust property for the payment of
any claim thereunder or for the performance thereof; but the omission of
such provisions from any such instrument shall not render any
Shareholder, Trustee, officer, employee or agent liable, nor shall the
Trustee, or any officer, employee of the Trust be liable to anyone for
such omission. If, notwithstanding this provision, any Shareholder,
Trustee, officer, employee or agent shall be held liable to any other
person by reason of the omission of such provision from any such
agreement, undertaking or obligation, the Shareholder, Trustee, officer,
employee or agent shall be entitled to indemnity and reimbursement out
of the Trust property, as provided in this Article XI.
Section 4. Indemnification of Trustees, Officers, Employees and
Agents.
(a) Every person who is or has been a Trustee, officer, employee
or agent of the Trust and persons who serve at the Trust's request as
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any debt, claim, action, demand, suit, proceeding,
judgment, decree, liability or obligation of any kind in which he
becomes involved as a party or otherwise by virtue of his being or
having been a Trustee, officer, employee or agent of the Trust or of
another corporation, partnership, joint venture, trust or other
enterprise at the request of the Trust and against amounts paid or
incurred by him in the settlement thereof.
(b) The words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal,
administrative, investigative or other, including appeals), actual or
threatened, and the words "liability" and "expenses" shall include
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(c) No indemnification shall be provided hereunder to a Trustee,
officer, employee or agent against any liability to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct
of his office.
(d) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall
not affect any other rights to which any Trustee, officer, employee or
agent may now or hereafter be entitled, shall continue as to a person
who has ceased to be such Trustee, officer, employee, or agent and shall
inure to the benefit of the heirs, executors and administrators of such
a person.
(e) In the absence of a final decision on the merits by a court
or other body before which such proceeding was brought, an
indemnification payment will not be made, except as provided in
paragraph (f) of this Section 4, unless in the absence of such a
decision, a reasonable determination based upon a factual review has
been made (i) by a majority vote of a quorum of non-party trustees who
are not interested persons of the Trust, or (ii) by independent legal
counsel in a written opinion that the indemnitee was not liable for an
act of willful misfeasance, bad faith, gross negligence, or reckless
disregard of duties.
(f) The Trust further undertakes that advancement of expenses
incurred in the defense of a proceeding (upon undertaking for repayment
unless it is ultimately determined that indemnification is appropriate)
against an officer, trustee or controlling person of the Trust, will not
be made absent the fulfillment of at least one of the following
conditions: (i) the indemnitee provides security for his undertaking,
(ii) the Trust is insured against losses arising by reason of any lawful
advances or (iii) a majority of a quorum of disinterested non-party
trustees or independent legal counsel in a written opinion makes a
factual determination that there is a reason to believe the indemnitee
will be entitled to indemnification.
ARTICLE XII
MISCELLANEOUS
Section 1. Trust is not a Partnership. It is hereby expressly
declared that a trust and not a partnership is created hereby.
Section 2. Trustee's Good Faith Action, Expert Advice, No Bond or
Surety. The exercise by the Trustees of their powers and discretions
hereunder in good faith and with reasonable care under the circumstances
then prevailing, shall be binding upon everyone interested. Subject to
the provisions of Article XI, the Trustees shall not be liable for
errors of judgment mistakes of fat or law. The Trustees may take advice
of counsel or other experts with respect to the provisions of Article
XI, shall be under no liability for any act or omission in accordance
with such advice or for failing to follow such advice. The Trustees
shall not be required to give any bond as such, nor any surety if a bond
is required.
Section 3. Establishment of Record Dates. The Trustees may close
the Share transfer books of the Trust for a period not exceeding sixty
(60) days preceding the date of any meeting of Shareholders, or the date
for the payment of any dividend or the making of any distribution to
Shareholders, or the date for the allotment of rights, or the date when
any change or conversion or exchange of Shares shall go into effect; or
in lieu of closing the Shares transfer books aforesaid, the Trustees may
fix in advance a date, not exceeding sixty (60) days preceding the date
of any meeting of Shareholders, or the date for the payment of any
dividend or the making of any distribution to Shareholders, or the date
for the allotment of rights, or the last day on which the consent or
dissent of Shareholders may be effectively expressed for any purpose, as
a record date for the determination of the Shareholders entitled to
notice of, and, to vote at, any such meeting and any adjournment
thereof, or entitled to receive payment of any such dividend or
distribution, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of shares,
or to exercise the right to give such consent or dissent, and in such
case such Shareholder and only such Shareholder as shall be Shareholders
of record on the date so fixed shall be entitled to such notice of, and
to vote at, such meeting, or to receive payment of such dividend or
distribution, or to receive such allotment or rights, or to exercise
such rights, as the case may be, notwithstanding any transfer of any
Shares on the books of the Trust after any such date fixed as aforesaid.
Section 4. Termination of Trust.
(a) This Trust shall continue without limitation of time but
subject to the provisions of paragraphs (b), (c), and (d) of this
Section 4.
(b) The Trustees, with the approval of the holders of at least
two-thirds of the outstanding Shares, may by unanimous action sell and
convey the assets of the Trust to another trust or corporation organized
under the laws of any state of the United States, which is a diversified
open-end management company as defined in the 1940 Act, for an adequate
consideration which may include the assumption of all outstanding
obligations, taxes and other liabilities, accrued or contingent, of the
Trust and which may include shares of beneficial interest or stock of
such trust or corporation. Upon making provision for the payment of all
such liabilities, by such assumption or otherwise, the Trustees shall
distribute the remaining proceeds ratably among the holders of the
Shares of the Trust then outstanding.
(c) Subject to a Majority Shareholder Vote, the Trustees may at
any time sell and convert into money all the assets of the Trust. Upon
making provision for the payment of all outstanding obligations, taxes
and other liabilities, accrued or contingent, of the Trust, the Trustees
shall distribute the remaining assets of the Trust ratably among the
holders of the outstanding Shares.
(d) Upon completion of the distribution of the remaining proceeds
of the remaining assets as provided in paragraphs (b) and (c), the Trust
shall terminate and the Trustees shall be discharged of any and all
further liabilities and duties hereunder and the right, title and
interest of all parties shall be canceled and discharged.
Section 5. Offices of the Trust, Filing of Copies, References,
Heading. The Trust shall maintain a usual place of business in
Massachusetts, which, initially, shall be 50 Congress Street, Boston,
Massachusetts, and shall continue to maintain an office at such address
unless changed by the Trustees to another location in Massachusetts.
The Trust may maintain other offices as the Trustees may from time to
time determine. The original or a copy of this instrument and of each
declaration of trust supplemental hereto shall be kept at the office of
the Trust where it may be inspected by any Shareholder. A copy of this
instrument and of each supplemental declaration of trust shall be filed
by the Trustees with the Massachusetts Secretary of State and the Boston
City Clerk, as well as any other governmental office where such filing
may from time to time be required. Anyone dealing with the Trust may
rely on a certificate by an officer of the Trust as to whether or not
any such supplemental declaration of trust has been made and as to any
matters in connection with the Trust hereunder, and with the same effect
as if it were the original, may rely on a copy certified by an officer
of the Trust to be a copy of this instrument or of any such supplemental
declaration of trust, references to this instrument, and all expressions
like "herein," " hereof" and "hereunder," shall be deemed to refer to
this instrument as amended or affected by an such supplemental
declaration of trust. Headings are placed herein for convenience of
reference only and in case of any conflict, the text of this instrument,
rather than the headings, shall control. This instrument may be
executed in any number of counterparts each of which shall be deemed an
original.
Section 6. Applicable Law. The Trust set forth in this
instrument is created under and is to be governed by and construed and
administered according to the laws of the Commonwealth of Massachusetts.
The Trust shall be of the type commonly called a Massachusetts business
trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
Section 7. Amendments. Prior to the initial issuance of Shares
pursuant to the second sentence of Section 3 of Article III, a majority
of the Trustees then in office may amend or otherwise supplement this
instrument by making a Declaration of Trust supplemental hereto, which
thereafter shall form a part hereof. Subsequent to such initial
issuance of Shares, if authorized by a majority of the Trustees then in
office and by a Majority Shareholder Vote, or by any larger vote which
may be required by applicable law or this Declaration of Trust in any
particular case, the Trustees shall amend or otherwise supplement this
instrument, by making a Declaration of Trust supplemental hereto, which
thereafter shall form a part hereof. Any such supplemental Declaration
of Trust shall be signed by at least a majority of the Trustees then in
office. Copies of the supplemental Declaration of Trust shall be filed
as specified in Section 5 of this Article XII.
Section 8. Use of Name. The Trust acknowledges that Federated
Investors, Inc., has reserved the right to grant the non-exclusive use
of the name "Federated" or any derivative thereof to any other
investment company, investment adviser, distributor, or other business
enterprise, and to withdraw from the Trust the use of the name
"Federated".
IN WITNESS WHEREOF, the undersigned have executed this instrument
the day and year first above written.
/s/ John F. Donahue /s/ J. Joseph Maloney, Jr.
John F. Donahue J. Joseph Maloney, Jr.
/s/ William J. Copeland /s/ Gregor F. Meyer
William J. Copeland Gregor F. Meyer
/s/ James E. Dowd /s/ Wesley W. Posvar
James E. Dowd Wesley W. Posvar
/s/Lawrence D. Ellis, MD /s/ Marjorie P. Smuts
Lawrence D. Ellis, MD Marjorie P. Smuts
/s/Edward L. Flaherty,Jr. /s/ Glen R. Johnson
Edward L. Flaherty, Jr. Glen R. Johnson
/s/ John A. Staley, IV
John A. Staley, IV
COMMONWEALTH OF PENNSYLVANIA )
: ss:
COUNTY OF ALLEGHENY )
I hereby certify that on October 3, 1988, before me, the
subscriber, a Notary Public of the Commonwealth of Pennsylvania, in for
the County of Allegheny, personally appeared JOHN F. DONAHUE, WILLIAM J.
COPELAND, JAMES E. DOWD, LAWRENCE D. ELLIS, MD, EDWARD L. FLAHERTY, JR.,
GREGOR F. MEYER, WESLEY W. POSVAR, MARJORIE P. SMUTS, GLEN R. JOHNSON,
AND JOHN A STALEY, IV, who acknowledged the foregoing Declaration of
Trust to be there act.
Witness my hand and the notarial deal the day and year last above
written.
/s/ Linda L. Banas
Notary Public
COMMONWEALTH OF MASSACHUSETTS )
: ss:
COUNTY OF SUFFOLK )
I hereby certify that on October 18, 1988, before me, the
subscriber, a Notary Public of the Commonwealth of Massachusetts, in for
the County of Suffolk, personally appeared J. JOSEPH MALONEY, JR., who
acknowledged the foregoing Declaration of Trust to be his act.
Witness my hand and the notarial deal the day and year last above
written.
/s/ Martha M. Campbell
Notary Public
EXHIBIT 1
FEDERATED SHORT-INTERMEDIATE INCOME TRUST
DECLARATION OF TRUST
Page
Article I. Names and Definitions
1. Name
2. Definitions -
(a) Affiliated Person Assignment,
Commission, interested Person,
Majority Shareholder Vote, Principal
Underwriter
(b) Trust
(c) Accumulated Net income
(d) Shareholder
(e) Trustees
(f) Shares
(g) 1940 Act
Article II. Purpose of Trust
Article III. Beneficial interest
1. Shares of Beneficial interest
2. Ownership of Shares
3. investment in the Trust
4. No Pre-Emptive Rights
Article IV the Trustees
1. Management of the Trust
2. Election of Trustees at 1988 Meeting of
Shareholders
3. Terms of office of Trustees
4. Termination of Service and
Appointment of Trustees
5. Number of Trustees
6. Temporary Absence of Trustees
7. Effect of Death, Resignation,
Etc. of a Trustee
8. Ownership of Assets
Article V. Powers of the Trustees
1. Powers
2. Principal Transactions
3. Trustees and officers as Shareholders
4. Parties to Contract
Page
Article VI Trustees' Expenses and Compensation
1. Trustee Reimbursement
2. Trustee Compensation
Article VII investment Adviser, Administrative Services, Principal
Underwriter and Transfer Agent
1. investment Adviser
2. Administrative Services
3. Principal Underwriter
4. Transfer Agent
5. Provisions and Amendments
Article VIII. Shareholders' Voting Powers and Meetings
1. Voting Powers
2. Meetings
3. Quorum and Required Vote
4. Additional Provisions
Article IX Custodian
1. Appointment and Duties
2. Central Certificate System
Article X. Distributions and Redemptions
1. Distributions
2. Redemptions and Repurchases
3. Determination of Accumulated Net income
4. Net Asset Value of Shares
5. Suspension of the Right of Redemption
6. Trust's Right to Redeem Shares
Article XI. Limitation of Liability and indemnification
1. Limitation of Personal Liability and
indemnification of Shareholders
2. Limitation of Personal Liability and
indemnification of Trustees, officers,
Employees Or Agents of the Trust
3. Express Exculpatory Clauses and
instruments
Page
Article XII. Miscellaneous
1. Trust is not a Partnership
2. Trustee's Good Faith Action, Expert Advice,
No Bond or Surety
3. Establishment of Record Dates
4. Termination of Trust
5. offices of the Trust, Filing of Copies,
Headings, Counterparts
6. Applicable Law
7. Amendments
8. Use of Name
