PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Automated
Cash Management Trust for the six-month period ended January 31, 1996. The
report begins with an investment review on the short-term market from the fund's
portfolio manager. Following the investment review, you will find the fund's
portfolio of investments and its financial statements.
In Automated Cash Management Trust, your ready cash is at work pursuing daily
income, along with a high level of liquidity and a stable net asset value of
$1.00.* At the end of the reporting period, the fund's assets were invested in
commercial paper (58.9%), variable rate instruments (20.4%), repurchase
agreements (10.8%), bank notes (4.3%), certificates of deposit (3.7%), and
corporate notes (2.3%).
During the six-month reporting period, dividends paid to shareholders totaled
$0.03 per share. At the end of the reporting period, net assets stood at $1.3
billion.
Thank you for participating in the daily earning power of Automated Cash
Management Trust. As always, we welcome your questions, comments, or
suggestions.
Sincerely,
J. Christopher Donahue
President
March 15, 1996
* Although money market mutual funds seek to maintain a stable net asset value
of $1.00 per share, there is no assurance that they will be able to do so.
Investments in mutual funds are neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Automated Cash Management Trust invests in high quality money market instruments
maturing in thirteen months or less. The average maturity of these securities,
computed on a dollar weighted basis, is restricted to 90 days or less. Portfolio
securities must be rated in the highest short-term rating category by one or
more of the nationally recognized statistical rating organizations or, if
unrated, be of comparable quality to securities having such ratings. Typical
security types include, but are not limited to, commercial paper, certificates
of deposit, time deposits, variable rate instruments, and repurchase agreements.
Interest rates held steady for the third quarter of 1995 before continuing to
decline modestly in the last several months of the year. The Federal Reserve
Board (the "Fed") took action on December 19, 1995, and lowered the Federal
Funds target rate from 5.75% to 5.50%, precisely the level at which 1995 began.
Finally, after market anticipation throughout January 1996, the Fed again
lowered the Federal Funds target rate by 25 basis points from 5.50% to 5.25% on
January 31, 1996.
The money market yield curve kept a consistent shape throughout the reporting
period. One-month commercial paper rates declined 39 basis points while
six-month rates dropped 36 basis points, continuing a modestly inverted money
market yield curve.
The target average maturity range for the fund began the reporting period at
35-45 days but was subsequently lengthened to a 40-50 day range, reflecting the
changing economic and monetary sentiment. In structuring the fund, there is
continued emphasis placed on positioning 30-35% of the fund's core assets in
variable rate demand notes and accomplishing a modest barbell structure.
During the six-months ended January 31, 1996, the net assets of the fund
increased from $1.141 billion to $1.270 billion while the 7-day net yield
decreased from 5.42% to 5.07%.* The effective average maturity of the fund on
January 31, 1996, was 58 days.
*Performance quoted represents past performance and is not indicative of future
results. Yield will vary.
AUTOMATED CASH MANAGEMENT TRUST
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ------------------------------------------------------------------------------- ----------------
BANK NOTES--4.3%
- ----------------------------------------------------------------------------------------------
BANKING--4.3%
-------------------------------------------------------------------------------
$ 10,000,000 Bank of America, Illinois, 5.300%, 4/26/1996 $ 10,000,609
-------------------------------------------------------------------------------
5,000,000 Bank of New York, New York, 5.570%, 5/30/1996 4,999,196
-------------------------------------------------------------------------------
13,000,000 Mellon Bank NA, Pittsburgh, 5.750%-5.810%, 2/28/1996-10/16/1996 12,999,005
-------------------------------------------------------------------------------
26,000,000 Seattle-First Bank, Seattle, 5.330%-5.370%, 4/24/1996-7/9/1996 26,000,000
------------------------------------------------------------------------------- ----------------
TOTAL BANK NOTES 53,998,810
------------------------------------------------------------------------------- ----------------
CERTIFICATES OF DEPOSIT--3.7%
- ----------------------------------------------------------------------------------------------
BANKING--3.7%
-------------------------------------------------------------------------------
13,000,000 Bayerische Hypotheken-Und Wechsel-Bank Ag, 5.750%, 4/12/1996 13,000,633
-------------------------------------------------------------------------------
7,000,000 Lloyds Bank PLC, London, 5.720%, 8/16/1996 7,008,089
-------------------------------------------------------------------------------
27,000,000 Swiss Bank Corp., Basle, 5.770%, 2/2/1996 27,000,000
------------------------------------------------------------------------------- ----------------
TOTAL CERTIFICATES OF DEPOSIT 47,008,722
------------------------------------------------------------------------------- ----------------
(A) COMMERCIAL PAPER--58.9%
- ----------------------------------------------------------------------------------------------
BANKING--15.8%
-------------------------------------------------------------------------------
15,000,000 ABN AMRO N.A., Finance, Inc., (Guaranteed by ABN AMRO Bank N.V., Amsterdam),
5.640%-5.785%, 4/25/1996 14,806,100
-------------------------------------------------------------------------------
30,400,000 Barclays Bank of Canada, (Guaranteed by Barclays Bank PLC, London),
5.767%-5.837%, 2/12/1996-3/1/1996 30,294,916
-------------------------------------------------------------------------------
16,700,000 City of Cleveland, (Union Bank of Switzerland, Zurich LOC), 5.606%, 4/3/1996 16,700,000
-------------------------------------------------------------------------------
12,000,000 Paribas Finance, Inc., (Guaranteed by Banque Paribas, Paris), 5.381%, 4/22/1996 11,856,630
-------------------------------------------------------------------------------
9,651,000 Queensland Alumina Ltd., (Credit Suisse, Zurich LOC), 5.315%,
4/23/1996 9,535,590
-------------------------------------------------------------------------------
10,000,000 Royal Bank of Canada, Montreal, 5.516%, 6/7/1996 9,810,558
-------------------------------------------------------------------------------
10,000,000 Societe Generale North America, Inc., (Guaranteed by Societe Generale, Paris),
5.287%, 7/17/1996 9,761,097
-------------------------------------------------------------------------------
</TABLE>
AUTOMATED CASH MANAGEMENT TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ------------------------------------------------------------------------------- ----------------
(A) COMMERCIAL PAPER--CONTINUED
- ----------------------------------------------------------------------------------------------
BANKING--CONTINUED
-------------------------------------------------------------------------------
$ 57,000,000 Svenska Handelsbanken, Inc., (Guaranteed by Svenska Handelsbanken, Stockholm),
5.233%-5.860%, 2/6/1996-7/22/1996 $ 56,233,670
-------------------------------------------------------------------------------
30,000,000 UBS Finance (Delaware), Inc., (Guaranteed by Union Bank of Switzerland,
Zurich), 5.951%, 2/1/1996 30,000,000
-------------------------------------------------------------------------------
12,000,000 Westpac Capital Corp., (Guaranteed by Westpac Banking, Corp., Sydney), 5.309%,
7/18/1996 11,710,480
------------------------------------------------------------------------------- ----------------
Total 200,709,041
------------------------------------------------------------------------------- ----------------
FINANCE-COMMERCIAL--23.5%
-------------------------------------------------------------------------------
58,000,000 Asset Securitization Cooperative Corp., 5.345%-5.757%,
2/2/1996-4/30/1996 57,630,894
-------------------------------------------------------------------------------
55,800,000 Beta Finance, Inc., 5.288%-5.851%, 2/2/1996-7/17/1996 55,466,795
-------------------------------------------------------------------------------
29,100,000 CIESCO, Inc., 5.409%-5.820%, 2/8/1996-4/11/1996 28,943,798
-------------------------------------------------------------------------------
12,000,000 CIT Group Holdings, Inc., 5.453%-5.693%, 3/19/1996-4/8/1996 11,893,355
-------------------------------------------------------------------------------
23,200,000 CAFCO, 5.397%-5.791%, 4/22/1996-5/10/1996 22,877,477
-------------------------------------------------------------------------------
40,325,000 Falcon Asset Securitization Corp., 5.741%-5.753%, 2/8/1996-
4/18/1996 40,176,204
-------------------------------------------------------------------------------
40,000,000 General Electric Capital Corp., 5.327%-5.845%, 2/5/1996-7/9/1996 39,472,267
-------------------------------------------------------------------------------
25,000,000 Greenwich Funding Corp., 5.740%-5.749%, 2/15/1996-2/28/1996 24,914,275
-------------------------------------------------------------------------------
12,575,000 PREFCO, 5.235%-5.730%, 2/26/1996-7/25/1996 12,400,452
-------------------------------------------------------------------------------
5,000,000 Sheffield Receivables Corp., 5.744%, 2/16/1996 4,988,208
------------------------------------------------------------------------------- ----------------
Total 298,763,725
------------------------------------------------------------------------------- ----------------
FINANCE-RETAIL--13.6%
-------------------------------------------------------------------------------
53,000,000 American Express Credit Corp., 5.253%-5.779%, 3/4/1996-10/9/1996 52,077,299
-------------------------------------------------------------------------------
31,000,000 Associates Corp. of North America, 5.321%-5.680%, 3/11/1996-
9/24/1996 30,430,818
-------------------------------------------------------------------------------
16,000,000 Budget Funding Corp., 5.352%, 4/12/1996 15,833,071
-------------------------------------------------------------------------------
7,000,000 Ford Credit Receivables Funding, Inc., 5.494%, 4/1/1996 6,936,767
-------------------------------------------------------------------------------
15,000,000 McKenna Triangle National Corp., 5.467%, 4/2/1996 14,862,750
-------------------------------------------------------------------------------
</TABLE>
AUTOMATED CASH MANAGEMENT TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ------------------------------------------------------------------------------- ----------------
(A) COMMERCIAL PAPER--CONTINUED
- ----------------------------------------------------------------------------------------------
FINANCE-RETAIL--CONTINUED
-------------------------------------------------------------------------------
$ 45,000,000 New Center Asset Trust, A1+/P1 Series, 5.351%-5.752%, 2/28/1996-
4/22/1996 $ 44,601,208
-------------------------------------------------------------------------------
8,000,000 Norwest Financial, Inc., 5.314%, 9/17/1996 7,739,449
------------------------------------------------------------------------------- ----------------
Total 172,481,362
------------------------------------------------------------------------------- ----------------
INSURANCE--0.8%
-------------------------------------------------------------------------------
10,000,000 CXC, Inc., 5.346%, 5/2/1996 9,866,786
------------------------------------------------------------------------------- ----------------
OIL & OIL FINANCE--4.4%
-------------------------------------------------------------------------------
21,000,000 Chevron Transport Corp., (Guaranteed by Chevron Corp.), 5.338%-5.802%,
2/5/1996-7/1/1996 20,869,776
-------------------------------------------------------------------------------
35,000,000 Koch Industries, Inc., 5.951%, 2/1/1996 35,000,000
------------------------------------------------------------------------------- ----------------
Total 55,869,776
------------------------------------------------------------------------------- ----------------
TELECOMMUNICATIONS--0.8%
-------------------------------------------------------------------------------
10,000,000 AT&T Corp., 5.598%, 5/10/1996 9,849,850
------------------------------------------------------------------------------- ----------------
TOTAL COMMERCIAL PAPER 747,540,540
------------------------------------------------------------------------------- ----------------
CORPORATE NOTES--2.3%
- ----------------------------------------------------------------------------------------------
FINANCE-EQUIPMENT--1.5%
-------------------------------------------------------------------------------
4,198,175 Case Equipment Loan Trust 1995-B Class A-1, 5.825%, 9/15/1996 4,198,175
-------------------------------------------------------------------------------
2,946,263 Caterpillar Financial Asset Trust 1995-A Class A-1, 5.850%,
8/25/1996 2,946,263
-------------------------------------------------------------------------------
12,323,525 Navistar Financial 1995-A Owner Trust, 5.750%, 11/15/1996 12,323,368
------------------------------------------------------------------------------- ----------------
Total 19,467,806
------------------------------------------------------------------------------- ----------------
FOOD & BEVERAGE--0.8%
-------------------------------------------------------------------------------
10,000,000 PepsiCo, Inc., 5.750%-5.830%, 8/27/1996-9/6/1996 9,999,965
------------------------------------------------------------------------------- ----------------
TOTAL CORPORATE NOTES 29,467,771
------------------------------------------------------------------------------- ----------------
(B) VARIABLE RATE INSTRUMENTS--20.4%
- ----------------------------------------------------------------------------------------------
BANKING--10.2%
-------------------------------------------------------------------------------
7,000,000 American Seaway Foods, Inc., (Society National Bank, Cleveland, OH LOC),
5.585%, 2/2/1996 7,000,000
-------------------------------------------------------------------------------
</TABLE>
AUTOMATED CASH MANAGEMENT TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ------------------------------------------------------------------------------- ----------------
(B) VARIABLE RATE INSTRUMENTS--CONTINUED
- ----------------------------------------------------------------------------------------------
BANKING--CONTINUED
-------------------------------------------------------------------------------
$ 8,400,000 Associated Materials, Inc., (Society National Bank, Cleveland, OH LOC), 5.585%,
2/2/1996 $ 8,400,000
-------------------------------------------------------------------------------
6,000,000 Beverly California Corp., (PNC Bank, N.A. LOC), 5.591%, 2/5/1996 6,000,000
-------------------------------------------------------------------------------
1,525,000 Denver Urban Renewal Authority, Series 1992-B, (Banque Paribas, Paris LOC),
5.850%, 2/1/1996 1,525,000
-------------------------------------------------------------------------------
6,000,000 Development Authority of Richmond County, GA, (PNC Bank, N.A. LOC), 5.591%,
2/5/1996 6,000,000
-------------------------------------------------------------------------------
5,000,000 Kentucky Rural Economic Development Authority, (PNC Bank, N.A. LOC), 5.591%,
2/5/1996 5,000,000
-------------------------------------------------------------------------------
7,000,000 Massachusetts, IFA, Kendell Square, (PNC Bank, N.A. LOC), 5.616%, 2/1/1996 7,000,000
-------------------------------------------------------------------------------
7,533,000 Medic Funding Corp. Series 1993-A, (Bank One, Akron, N.A. LOC), 5.616%,
2/1/1996 7,533,000
-------------------------------------------------------------------------------
13,250,000 Merit Care, Inc., (PNC Bank, N.A. LOC), 5.591%, 2/5/1996 13,250,000
-------------------------------------------------------------------------------
12,000,000 National Funding Corp., Series 1994-A, (American National Bank, Chicago LOC),
5.585%, 2/1/1996 12,000,000
-------------------------------------------------------------------------------
7,500,000 (c)SMM Trust, Series 1995-L, (Morgan Guaranty Trust Co., New York LOC), 5.645%,
2/15/1996 7,499,174
-------------------------------------------------------------------------------
7,500,000 (c)SMM Trust, Series 1995-B, (Morgan Guaranty Trust Co., New York LOC), 5.688%,
2/1/1996 7,500,000
-------------------------------------------------------------------------------
27,000,000 (c)SMM Trust, Series 1995-I, (Morgan Guaranty Trust Co., New York LOC), 5.520%,
2/1/1996 26,997,466
-------------------------------------------------------------------------------
14,000,000 (c)SMM Trust, Series 1995-N, (Morgan Guaranty Trust Co., New York LOC), 5.925%,
2/15/1996 14,000,000
------------------------------------------------------------------------------- ----------------
Total 129,704,640
------------------------------------------------------------------------------- ----------------
ELECTRICAL EQUIPMENT--2.0%
-------------------------------------------------------------------------------
4,551,056 Marta Leasing Ltd., (Guaranteed by General Electric Co.), 5.591%, 2/5/1996 4,551,056
-------------------------------------------------------------------------------
</TABLE>
AUTOMATED CASH MANAGEMENT TRUST
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ------------------------------------------------------------------------------- ----------------
(B) VARIABLE RATE INSTRUMENTS--CONTINUED
- ----------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--CONTINUED
-------------------------------------------------------------------------------
$ 20,889,046 Northwest Airlines, Inc., (Guaranteed by General Electric Co.), 5.691%,
2/5/1996 $ 20,889,046
------------------------------------------------------------------------------- ----------------
Total 25,440,102
------------------------------------------------------------------------------- ----------------
FINANCE-COMMERCIAL--1.1%
-------------------------------------------------------------------------------
13,500,000 Money Market Auto Loan Trust, (Guaranteed by Cap MAC), 5.825%, 2/15/1996 13,500,000
------------------------------------------------------------------------------- ----------------
FINANCE-RETAIL--2.4%
-------------------------------------------------------------------------------
30,000,000 Carco Auto Loan Master Trust 1993-2, Series 1993-2 Class A1, 5.685%, 2/15/1996 30,000,000
------------------------------------------------------------------------------- ----------------
INSURANCE--4.7%
-------------------------------------------------------------------------------
25,000,000 (c)People's Security Life Insurance, 6.030%, 2/1/1996 25,000,000
-------------------------------------------------------------------------------
12,500,000 Sun Life Insurance Co. of America, 5.670%, 2/1/1996 12,500,000
-------------------------------------------------------------------------------
12,500,000 (c)Sun Life Insurance Co. of America, 5.775%, 2/1/1996 12,500,000
-------------------------------------------------------------------------------
10,000,000 Sun Life Insurance Co. of America, 5.779%, 2/1/1996 10,000,000
------------------------------------------------------------------------------- ----------------
Total 60,000,000
------------------------------------------------------------------------------- ----------------
TOTAL VARIABLE RATE INSTRUMENTS 258,644,742
------------------------------------------------------------------------------- ----------------
(D) REPURCHASE AGREEMENTS--10.8%
- ----------------------------------------------------------------------------------------------
25,700,000 First Union Capital Markets Corp., 5.900%, dated 1/31/1996,
due 2/1/1996 25,700,000
-------------------------------------------------------------------------------
46,900,000 Sanwa Securities USA Co., L.P., 5.900%, dated 1/31/1996,
due 2/1/1996 46,900,000
-------------------------------------------------------------------------------
64,000,000 Swiss Bank Capital Markets, 5.900%, dated 1/31/1996, due 2/1/1996 64,000,000
------------------------------------------------------------------------------- ----------------
TOTAL REPURCHASE AGREEMENTS 136,600,000
------------------------------------------------------------------------------- ----------------
TOTAL INVESTMENTS, AT AMORTIZED COST (E) $ 1,273,260,585
------------------------------------------------------------------------------- ----------------
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase.
(b) Current rate and next reset date shown.
AUTOMATED CASH MANAGEMENT TRUST
- --------------------------------------------------------------------------------
(c) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At the end of the period, these securities
amounted to $93,496,640 which represents 7.4% of net assets.
(d) The 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
($1,270,150,123) at January 31, 1996.
The following acronyms are used throughout this portfolio:
CAFCO--Corporate Asset Funding Co., Inc.
IFA--Industrial Finance Authority
LOC--Letter of Credit
PLC--Public Limited Company
PREFCO--Preferred Receivables Funding Co.
(See Notes which are an integral part of the Financial Statements)
AUTOMATED CASH MANAGEMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -----------------------------------------------------------------------------------------------
Investments in repurchase agreements $ 136,600,000
- -----------------------------------------------------------------------------
Investments in securities 1,136,660,585
- ----------------------------------------------------------------------------- ----------------
Total investments in securities, at amortized cost and value $ 1,273,260,585
- -----------------------------------------------------------------------------------------------
Cash 38,280
- -----------------------------------------------------------------------------------------------
Income receivable 3,196,382
- -----------------------------------------------------------------------------------------------
Receivable for shares sold 797
- ----------------------------------------------------------------------------------------------- ----------------
Total assets 1,276,496,044
- -----------------------------------------------------------------------------------------------
LIABILITIES:
- -----------------------------------------------------------------------------------------------
Income distribution payable 5,719,223
- -----------------------------------------------------------------------------
Accrued expenses 626,698
- ----------------------------------------------------------------------------- ----------------
Total liabilities 6,345,921
- ----------------------------------------------------------------------------------------------- ----------------
NET ASSETS for 1,270,150,123 shares outstanding $ 1,270,150,123
- ----------------------------------------------------------------------------------------------- ----------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
$1,270,150,123 / 1,270,150,123 shares outstanding $1.00
- ----------------------------------------------------------------------------------------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
AUTOMATED CASH MANAGEMENT TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest $ 36,604,490
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------------------------
Investment advisory fee $ 3,119,314
- ------------------------------------------------------------------------------------
Administrative personnel and services fee 472,054
- ------------------------------------------------------------------------------------
Custodian fees 89,212
- ------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 70,470
- ------------------------------------------------------------------------------------
Directors'/Trustees' fees 13,728
- ------------------------------------------------------------------------------------
Auditing fees 4,492
- ------------------------------------------------------------------------------------
Legal fees 3,200
- ------------------------------------------------------------------------------------
Portfolio accounting fees 65,506
- ------------------------------------------------------------------------------------
Shareholder services fee 1,559,657
- ------------------------------------------------------------------------------------
Share registration costs 32,752
- ------------------------------------------------------------------------------------
Printing and postage 16,680
- ------------------------------------------------------------------------------------
Insurance premiums 16,304
- ------------------------------------------------------------------------------------
Taxes 11,040
- ------------------------------------------------------------------------------------
Miscellaneous 5,336
- ------------------------------------------------------------------------------------ -------------
Total expenses 5,479,745
- ------------------------------------------------------------------------------------
Waivers--
- ------------------------------------------------------------------------------------
Waiver of investment advisory fee $ (1,843,551)
- ---------------------------------------------------------------------
Waiver of shareholder services fee (52,725)
- --------------------------------------------------------------------- -------------
Total waivers (1,896,276)
- ------------------------------------------------------------------------------------ -------------
Net expenses 3,583,469
- --------------------------------------------------------------------------------------------------- -------------
Net investment income $ 33,021,021
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
AUTOMATED CASH MANAGEMENT TRUST
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED THREE MONTHS
(UNAUDITED) ENDED YEAR ENDED
JANUARY 31, 1996 JULY 31, 1995 APRIL 30, 1995
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------
OPERATIONS--
- -----------------------------------------------------
Net investment income $ 33,021,021 $ 15,102,380 $ 48,731,991
- ----------------------------------------------------- ------------------- ----------------- ------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------
Distributions from net investment income (33,021,021) (15,102,380) (48,731,991)
- ----------------------------------------------------- ------------------- ----------------- ------------------
SHARE TRANSACTIONS--
- -----------------------------------------------------
Proceeds from sale of shares 4,066,748,031 2,064,434,014 10,099,261,708
- -----------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 16,076,151 9,139,140 27,788,873
- -----------------------------------------------------
Cost of shares redeemed (3,953,717,242) (1,915,628,903) (10,119,404,536)
- ----------------------------------------------------- ------------------- ----------------- ------------------
Change in net assets resulting from share
transactions 129,106,940 157,944,251 7,646,045
- ----------------------------------------------------- ------------------- ----------------- ------------------
Change in net assets 129,106,940 157,944,251 7,646,045
- -----------------------------------------------------
NET ASSETS:
- -----------------------------------------------------
Beginning of period 1,141,043,183 983,098,932 975,452,887
- ----------------------------------------------------- ------------------- ----------------- ------------------
End of period $ 1,270,150,123 $ 1,141,043,183 $ 983,098,932
- ----------------------------------------------------- ------------------- ----------------- ------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
AUTOMATED CASH MANAGEMENT TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED THREE
(UNAUDITED) MONTHS
JANUARY 31, JULY 31, YEAR ENDED APRIL 30,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 1995(A) 1995 1994 1993 1992 1991 1990 1989
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------
Net investment income 0.03 0.01 0.05 0.03 0.03 0.05 0.07 0.08 0.08
- -----------------------
LESS DISTRIBUTIONS
- -----------------------
Distributions from net
investment income (0.03) (0.01) (0.05) (0.03) (0.03) (0.05) (0.07) (0.08) (0.08)
- ----------------------- ----- ----- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE,
END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------- ----- ----- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN (B) 2.69% 1.42% 4.82% 2.84% 3.11% 5.02% 7.52% 8.69% 8.20%
- -----------------------
RATIOS TO AVERAGE NET
ASSETS
- -----------------------
Expenses 0.57%* 0.57%* 0.57% 0.57% 0.56% 0.56% 0.55% 0.55% 0.55%
- -----------------------
Net investment income 5.29%* 5.60%* 4.71% 2.80% 3.07% 4.88% 7.23% 8.32% 7.93%
- -----------------------
Expense waiver/
reimbursement (c) 0.30%* 0.40%* 0.33% 0.07% 0.04% 0.03% 0.12% 0.09% 0.10%
- -----------------------
SUPPLEMENTAL DATA
- -----------------------
Net assets, end of
period (000 omitted) $1,270,150 $1,141,043 $983,099 $975,453 $1,172,170 $1,220,212 $1,464,710 $1,164,013 $943,136
- -----------------------
<CAPTION>
<S> <C>
1988
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00
- -----------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------
Net investment income 0.07
- -----------------------
LESS DISTRIBUTIONS
- -----------------------
Distributions from net
investment income (0.07)
- ----------------------- ---------
NET ASSET VALUE,
END OF PERIOD $ 1.00
- ----------------------- ---------
TOTAL RETURN (B) 6.72%
- -----------------------
RATIOS TO AVERAGE NET
ASSETS
- -----------------------
Expenses 0.55%
- -----------------------
Net investment income 6.53%
- -----------------------
Expense waiver/
reimbursement (c) 0.04%
- -----------------------
SUPPLEMENTAL DATA
- -----------------------
Net assets, end of
period (000 omitted) $924,558
- -----------------------
</TABLE>
* Computed on an annualized basis.
(a) The Fund was reorganized into Money Market Obligations Trust effective July
30, 1994. The Fund has changed its fiscal year-end from April 30, to July
31, effective October 27, 1994.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
AUTOMATED CASH MANAGEMENT FUND
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996
(UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION
Effective July 30, 1994, Automated Cash Management Trust (the "Fund") was
reorganized into an investment portfolio of Money Market Obligations Trust (the
"Trust"). The Trust is registered under the Investment Company Act of 1940, as
amended (the "Act") as an open-end, management investment company. The Trust
consists of six portfolios. The financial statements included herein are only
those of the Fund, a diversified portfolio. The financial statements of the
other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held.
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 uses the amortized cost method to value its
portfolio securities 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.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. Many restricted securities may
be resold in the secondary market in transactions exempt from registration.
In some cases, the restricted securities may be resold without registration
upon exercise of a demand feature. Such restricted securities may be
determined to be liquid under criteria established by the Board of
Trustees. The Fund will not incur any registration costs upon such resales.
Restricted securities are valued at amortized cost in accordance with Rule
2a-7 under the Investment Company Act of 1940. Additional information on
each restricted security held at January 31, 1996 is as follows:
<TABLE>
<CAPTION>
FUND
ACQUISITION ACQUISITION
SECURITY DATE COST
<S> <C> <C>
People's Security Life Insurance 7/6/1995 $ 25,000,000
--------------------------------------------------------------------
SMM Trust 5/26/1995-11/3/1995 $ 55,996,640
--------------------------------------------------------------------
Sun Life Insurance Co. of America 9/20/1993 $ 12,500,000
--------------------------------------------------------------------
</TABLE>
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value). At
January 31, 1996, capital paid-in aggregated $1,270,150,123. Transactions in
shares were as follows:
AUTOMATED CASH MANAGEMENT FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED YEAR ENDED
JANUARY 31, JULY 31, APRIL 30,
1996 1995 1995
<S> <C> <C> <C>
Shares sold 4,066,748,031 2,064,434,014 10,099,261,708
- -------------------------------------------
Shares issued to shareholders in payment of
distributions declared 16,076,151 9,139,140 27,788,873
- -------------------------------------------
Shares redeemed (3,953,717,242) (1,915,628,903) (10,119,404,536)
- ------------------------------------------- ---------------------- ------------------------- -----------------
Net change resulting from share
transactions 129,106,940 157,944,251 7,646,045
- ------------------------------------------- ---------------------- ------------------------- -----------------
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment
adviser, (the "Adviser"), receives for its services an annual investment
advisory fee equal to .50% of the Fund's average daily net assets. The
Adviser may voluntarily choose to waive any portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during
the period of the Administrative Services Agreement shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Fund will pay
FSS up to .25% of average daily net assets of the Fund for the period. The
fee paid to FSS is used to finance certain services for shareholders and to
maintain shareholder accounts. FSS may voluntarily choose to waive any
portion of its fee. FSS can modify or terminate this voluntary waiver at
any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through
its registered transfer and dividend disbursing agent, Federated
Shareholder Services Company, maintains all necessary shareholder records
and receives a fee based on the size, type, and number of accounts 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.
<TABLE>
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. J. Christopher Donahue
William J. Copeland President
J. Christopher Donahue Edward C. Gonzales
James E. Dowd Executive Vice President
Lawrence D. Ellis, M.D. John W. McGonigle
Edward L. Flaherty, Jr. Executive Vice President and Secretary
Peter E. Madden Richard B. Fisher
Gregor F. Meyer Vice President
John E. Murray, Jr. David M. Taylor
Wesley W. Posvar Treasurer
Marjorie P. Smuts J. Crilley Kelly
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or
any other government agency. Investment in mutual funds involves
investment risk, including possible loss of principal. Although money market
funds seek to maintain a stable net asset value of $1.00 per share, there is no
assurance that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
AUTOMATED
CASH
MANAGEMENT
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JANUARY 31, 1996
[LOGO]
FEDERATED SECURITIES CORP.
- --------------------------
Distributor
A Subsidiary of Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip 60934N864
8112802 (3/96)
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Government
Obligations Fund, which covers the six-month period ended January 31, 1996.
The report begins with an investment review on the short-term government
market from the fund's portfolio manager. Following the investment review,
you will find the fund's portfolio of investments and its financial
statements.
In Government Obligations Fund, your ready cash is at work pursuing daily
income, along with the additional advantages of daily liquidity and stability
of principal.* At the end of the reporting period, the fund's portfolio was
invested in repurchase agreements fully collateralized by U.S. government
securities, and in short-term U.S government obligations.
During the six-month reporting period, dividends paid to shareholders totaled
$0.03 per share. At the end of the reporting period, net assets stood at $2.6
billion.
Thank you for your confidence in the daily earning power of Government
Obligations Fund. As always, your questions and comments are welcome.
Sincerely,
J. Christopher Donahue
President
March 15, 1996
* Although money market mutual funds seek to maintain a stable net asset
value of $1.00 per share, there is no guarantee that they will be able
to do so. Investments in mutual funds are neither insured nor guaranteed
by the U.S. government.
INVESTMENT REVIEW
Government Obligations Fund is invested in direct U.S. Treasury and agency
obligations and in repurchase agreements which have these securities as
collateral. The fund continued to emphasize issues of the Federal National
Mortgage Association, Student Loan Marketing Association, Farm Credit System,
Federal Home Loan Banks, and Federal Home Loan Mortgage Corporation, and
maintains a small Treasury position for liquidity purposes. Recently, the
fund has been managed within a 40-50 day average maturity range.
The semi-annual reporting period brought continued signs of moderation in the
economy, as softening in the manufacturing, housing, and consumer sectors
restrained growth. Gross Domestic Product came in below the 2-21/2% pace
generally considered to be the potential, noninflationary rate of growth for
the economy. The monthly National Association of Purchasing Manager's Index*
has registered readings of below 50 since July 1995, levels thought to be
indicative of a contracting economy. Inflation remained quite friendly, with
prices at the consumer level rising less than 3%. Against this backdrop, the
Federal Reserve Board (the "Fed") eased monetary policy in December 1995 and
again in January 1996, each time by 25 basis points to lower the Federal
Funds target rate from 5.75% to 5.25% by the end of the reporting period. In
July of 1995, the Fed had reversed course in monetary policy by lowering the
Federal Funds target rate from 6% to 5.75%, after seven consecutive
tightenings throughout 1994 and early 1995.
The combination of a sluggish economy and benign inflation drove short-term
interest rates downward over the reporting period, as the market anticipated
the easings by the Fed in an attempt to move monetary policy closer to a
neutral stance. The yield on the three-month Treasury bill fell by more than
50 basis points over the reporting period, from 5.57% to close to 5%. Yields
on the six-month and one-year Treasury bills declined even more, by 63 and 75
basis points, respectively. The front end of the yield curve ended the
reporting period inverted, with the one-year Treasury bill trading roughly 15
basis points below the three-month Treasury bill at the end of January 1996.
Aside from the underlying fundamental factors, movements in market rates were
also influenced by the budget negotiations in Washington and the disruption
to the Treasury auction schedule in October and November 1995.
Throughout the reporting period the fund was targeted in a 40-50 day average
maturity target range, a modestly bullish stance, as we expected to see
additional easings from the Fed. However, with short-term interest rates
often anticipating a more aggressive forecast regarding future easing in
monetary policy than was consistent with our own outlook, we felt that a
yield advantage continued to exist for investments in repurchase agreements
versus direct investments in short-term Treasury securities. The fund
reinforced its barbell structure by combining its position in repurchase
agreements collateralized by U.S. government mortgage-backed securities with
short-term agency floating rate notes, with purchases in an area of the yield
curve that offered relative value-securities with longer maturities of six to
twelve months. This portfolio structure provided a competitive yield for the
fund.
With harsh winter weather likely to be a drag on the economy and inflation
remaining under control, we would anticipate additional easings in monetary
policy by the Fed in the future. Without a notable change in the underlying
economic fundamentals, we would look to reinforce the fund's barbelled
structure should market opportunities permit, and will attempt to continue to
maximize performance through ongoing relative value analysis. However,
changing economic and market developments are continuously monitored to best
serve our clients attracted to the short-term U.S. government market.
* The National Association of Purchasing Manager's Index is a diffusion
index that measures the economic activity of the largest manufacturers in
the United States.
GOVERNMENT OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM OBLIGATIONS-40.4%
(A)FEDERAL FARM CREDIT BANK, DISCOUNT NOTES-0.4%
$ 11,000,000 6.57%, 2/23/1996 $ 10,958,524
FEDERAL HOME LOAN BANK NOTES-2.5%
63,500,000 6.015%-6.85%, 2/28/1996-6/13/1996 63,518,537
(A)FEDERAL HOME LOAN BANK, DISCOUNT NOTES-1.2%
32,500,000 5.61%, 2/22/1996 32,395,160
(B)FEDERAL HOME LOAN BANK, FLOATING RATE NOTES-5.2%
135,500,000 5.315%-5.59%, 2/1/1996 135,454,946
(A)FEDERAL HOME LOAN MORTGAGE CORP., DISCOUNT NOTES-2.4%
62,375,000 5.61%-7.04%, 2/8/1996-2/20/1996 62,252,299
FEDERAL NATIONAL MORTGAGE ASSOCIATION-3.3%
84,400,000 5.41%-5.91%, 6/12/1996-12/6/1996 84,343,670
(A)FEDERAL NATIONAL MORTGAGE ASSOCIATION, DISCOUNT NOTES-9.6%
254,210,000 5.22%-5.93%, 2/6/1996-12/23/1996 250,767,337
(B)FEDERAL NATIONAL MORTGAGE ASSOCIATION, FLOATING RATE NOTES-1.9%
50,000,000 5.06%-5.63%, 2/1/1996-2/6/1996 49,966,013
STUDENT LOAN MARKETING ASSOCIATION NOTES-0.3%
8,000,000 6.943%, 2/21/1996 8,000,761
(B)STUDENT LOAN MARKETING ASSOCIATION, FLOATING RATE NOTES-3.9%
100,230,000 5.12%-5.56%, 2/6/1996 100,146,629
(B)HOUSING URBAN DEVELOPMENT, FLOATING RATE NOTES-1.9%
50,025,000 5.762%, 2/1/1996 50,025,000
</TABLE>
GOVERNMENT OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM OBLIGATIONS-CONTINUED
(A)U.S TREASURY BILLS-2.9%
$ 78,500,000 4.80%-5.27%, 6/27/1996-11/14/1996 $ 76,149,343
U.S. TREASURY NOTES-4.9%
127,000,000 4.375%-7.625%, 5/15/1996-9/30/1996 127,585,225
TOTAL SHORT-TERM OBLIGATIONS 1,051,563,444
(C)REPURCHASE AGREEMENTS-59.7%
151,000,000 Bear, Stearns & Co., Inc. 5.90%, dated 1/31/1996, due 2/1/1996 151,000,000
100,000,000 BT Securities Corp., 5.930%, dated 1/31/1996, due 2/1/1996 100,000,000
125,000,000 Chemical Securities, Inc., 5.90%, dated 1/31/1996, due 2/1/1996 125,000,000
35,000,000 Deutsche Bank Government Securities, Inc., 5.95%, dated 1/31/1996,
due 2/1/1996 35,000,000
300,000,000 Goldman, Sachs and Co., 5.91%, dated 1/31/1996, due 2/1/1996 300,000,000
125,000,000 HSBC Securities, Inc., 5.95%, dated 1/31/1996, due 2/1/1996 125,000,000
90,000,000 Lehman Government Securities, Inc., 6.02%, dated 1/31/1996,
due 2/1/1996 90,000,000
125,000,000 Morgan Stanley & Co., Inc., 5.95%, dated 1/31/1996, due 2/1/1996 125,000,000
125,000,000 Nomura Securities Intenational, Inc., 5.95%, dated 1/31/1996,
due 2/1/1996 125,000,000
100,000,000 Smith Barney, Inc., 5.96%, dated 1/31/1996, due 2/1/1996 100,000,000
125,000,000 UBS Securities, Inc., 5.94%, dated 1/31/1996, due 2/1/1996 125,000,000
50,000,000(d)Goldman, Sachs and Co., 5.505%, dated 1/24/1996, due 2/15/1996 50,000,000
</TABLE>
GOVERNMENT OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)REPURCHASE AGREEMENTS-CONTINUED
$ 73,000,000(d)Goldman, Sachs and Co., 5.505%, dated 1/24/1996, due 2/14/1996 $ 73,000,000
30,000,000(d)Lehman Government Securities, Inc., 5.60%, dated 12/21/1995,
due 2/20/1996 30,000,000
TOTAL REPURCHASE AGREEMENTS 1,554,000,000
TOTAL INVESTMENTS, AT AMORTIZED COST(E) $ 2,605,563,444
</TABLE>
(a) Discount rate at time of purchase.
(b) Floating rate note with current rate and next reset date shown.
(c) The 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 within seven days if the creditworthiness of the issuer is
downgraded.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($2,603,049,185) at January 31, 1996.
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments in repurchase agreements $1,554,000,000
Investments in securities 1,051,563,444
Total investments in securities, at amortized cost and value $2,605,563,444
Cash 182,875
Income receivable 9,026,701
Total assets 2,614,773,020
LIABILITIES:
Income distribution payable 11,523,104
Accrued expenses 200,731
Total liabilities 11,723,835
NET ASSETS for 2,603,049,185 shares outstanding $2,603,049,185
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$2,045,481,521 / 2,045,481,521 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$557,567,664 / 557,567,664 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $69,746,094
EXPENSES:
Investment advisory fee $ 2,385,909
Administrative personnel and services fee 902,663
Custodian fees 96,629
Transfer and dividend disbursing agent fees and expenses 32,210
Directors'/Trustees' fees 3,680
Auditing fees 6,072
Legal fees 2,760
Portfolio accounting fees 102,594
Shareholder services fee-Institutional Shares 2,445,087
Shareholder services fee-Institutional Service Shares 537,299
Share registration costs 108,744
Printing and postage 13,616
Insurance premiums 8,648
Taxes 3,128
Miscellaneous 2,761
Total expenses 6,651,800
Waivers-
Waiver of investment advisory fee $(1,231,014)
Waiver of shareholder services fee-Institutional Shares (2,445,087)
Total waivers (3,676,101)
Net expenses 2,975,699
Net investment income $66,770,395
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED
1996 JULY 31, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS-
Net investment income $ 66,770,395 $ 79,342,312
DISTRIBUTIONS TO SHAREHOLDERS-
Distributions from net investment income
Institutional Shares (55,128,976) (71,018,165)
Institutional Service Shares (11,641,419) (8,324,147)
Change in net assets resulting from distributions to
shareholders (66,770,395) (79,342,312)
SHARE TRANSACTIONS-
Proceeds from sale of shares 7,337,041,909 8,123,000,879
Net asset value of shares issued to shareholders in payment
of distributions declared 17,370,180 19,779,451
Cost of shares redeemed (7,016,984,132) (6,641,037,966)
Change in net assets resulting from share transactions 337,427,957 1,501,742,364
Change in net assets 337,427,957 1,501,742,364
NET ASSETS:
Beginning of period 2,265,621,228 763,878,864
End of period $ 2,603,049,185 $ 2,265,621,228
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS-INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
1996 1995 1994 1993 1992 1991 1990(A)
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.03 0.03 0.05 0.07 0.03
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.03) (0.03) (0.05) (0.07) (0.03)
NET ASSETS VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.87% 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% 0.20%*
Net investment income 5.64%* 5.58% 3.38% 3.16% 4.55% 6.77% 8.24%*
Expense waiver/reimbursement(c) 0.35%* 0.40% 0.15% 0.11% 0.12% 0.22% 0.34%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $2,045,482 $1,926,516 $763,879 $707,146 $679,533 $331,454 $148,598
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS-INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
JANUARY 31, JULY 31,
1996 1995(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
TOTAL RETURN(B) 2.74% 5.31%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.45%* 0.45%*
Net investment income 5.39%* 5.63%*
Expense waiver/reimbursement(c) 0.10%* 0.15%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $557,568 $339,105
* Computed on an annualized basis.
</TABLE>
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996 (UNAUDITED)
(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 portfolios. The
financial statements included herein are only those of Government Obligations
Fund (the "Fund"), a diversified portfolio. The financial statements of the
other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held. The Fund offers two classes of shares: Institutional Shares
and Institutional Service Shares.
(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 uses the amortized cost method to value
its portfolio securities 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.
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.
GOVERNMENT 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). At
January 31, 1996, capital paid-in aggregated $2,603,049,185.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31, JULY 31,
INSTITUTIONAL SHARES 1996 1995
<S> <C> <C>
Shares sold 6,128,400,638 7,200,004,553
Shares issued to shareholders in payment of distributions declared 12,696,801 16,152,849
Shares redeemed (6,022,131,751) (6,053,520,182)
Net change resulting from Institutional Share transactions 118,965,688 1,162,637,220
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31, JULY 31,
INSTITUTIONAL SERVICE SHARES 1996 1995(A)
<S> <C> <C>
Shares sold 1,208,641,271 922,996,326
Shares issued to shareholders in payment of distributions declared 4,673,379 3,626,602
Shares redeemed (994,852,381) (587,517,784)
Net change resulting from Institutional Service Share
transactions 218,462,269 339,105,144
Net change resulting from Fund share transactions 337,427,957 1,501,742,364
</TABLE>
(a) Reflects operations for the period from August 1, 1994 (date of initial
public investment) to July 31, 1995.
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 0.20% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE-Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during
the period of the Administrative Services Agreement shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE-Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to
0.25% of average daily net assets of the Fund for the period. The fee paid to
FSS is used to finance certain services for shareholders and to maintain
shareholder accounts. FSS may voluntarily choose to waive any portion of its
fee. FSS can modify or terminate this voluntary waiver at any time at its
sole discretion. For the six months ended January 31, 1996, Institutional
Shares fully waived its shareholder services fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES-FServ, through its
registered transfer and dividend disbursing agent, Federated Shareholder
Services Company, maintains all necessary shareholder records and receives a
fee 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 Fund are Officers and
Directors or Trustees of the above companies.
TRUSTEES OFFICERS
<TABLE>
<S> <S>
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. J. Christopher Donahue
William J. Copeland President
J. Christopher Donahue Edward C. Gonzales
James E. Dowd Executive Vice President
Lawrence D. Ellis, M.D. John W. McGonigle
Edward L. Flaherty, Jr. Executive Vice President and Secretary
Peter E. Madden Richard B. Fisher
Gregor F. Meyer Vice President
John E. Murray, Jr. David M. Taylor
Wesley W. Posvar Treasurer
Marjorie P. Smuts J. Crilley Kelly
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Government
Obligations Tax-Managed Fund for the six-month period ended January 31, 1996.
The report begins with an investment review on the short-term government market
from the fund's portfolio manager. Following the investment review, you will
find the fund's portfolio of investments and its financial statements.
The fund is designed to pursue daily dividends, a high level of liquidity, and a
stable net asset value of $1.00 per share.* In addition, the fund's portfolio of
U.S. government securities is managed so that dividends are exempt from state
and local income taxes.**
During the six-month reporting period, dividends paid to shareholders totaled
$0.03 per share. At the end of the reporting period, net assets of the fund
stood at $391.3 million.
Thank you for participating in the daily earning power of Government Obligations
Tax-Managed Fund. As always, we welcome your comments, or suggestions.
Sincerely,
J. Christopher Donahue
President
March 15, 1996
*Although money market mutual funds seek to maintain a stable net asset value
of $1.00 per share, there is no assurance that they will be able to do so.
Investments in mutual funds are neither insured nor guaranteed by the U.S.
government.
**Income may be subject to the federal alternative minimum tax.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Government Obligations Tax-Managed Fund, which is rated AAAm by Standard &
Poor's Ratings Group and Aaa by Moody's Investors Service, Inc.,* is invested in
U.S. Treasury and U.S. government agency obligations only. The inception date
for this fund was May 7, 1995. The fund invests in issues of the Student Loan
Marketing Association, Farm Credit System, Federal Home Loan Banks, and
Tennessee Valley Authority, and maintains a small Treasury position for
liquidity purposes. The fund does not invest in repurchase agreements, and is
managed to provide distributions which may be exempt from state and local taxes.
The semi-annual reporting period brought continued signs of moderation in the
economy, as softening in the manufacturing, housing, and consumer sectors
restrained growth. Gross Domestic Product came in below the 2-2-1/2% pace
generally considered to be the potential, noninflationary rate of growth for the
economy. The monthly National Association of Purchasing Manager's Index** has
registered readings of below 50 since July 1995, levels thought to be indicative
of a contracting economy. Inflation remained quite friendly, with prices at the
consumer level rising less than 3%. Against this backdrop, the Federal Reserve
Board (the "Fed") eased monetary policy in December 1995 and again in January
1996, each time by 25 basis points to lower the Federal Funds target rate from
5.75% to 5.25% by the end of the reporting period. In July of 1995, the Fed had
reversed course in monetary policy by lowering the Federal funds target rate
from 6% to 5.75%, after seven consecutive tightenings throughout 1994 and early
1995.
The combination of a sluggish economy and benign inflation drove short-term
interest rates downward over the reporting period, as the market anticipated the
easings by the Fed in an attempt to move monetary policy closer to a neutral
stance. The yield on the three-month Treasury bill fell by more than 50 basis
points over the reporting period, from 5.57% to close to 5.00%. Yields on the
six-month and one-year Treasury bills declined even more, by 63 and 75 basis
points, respectively. The front end of the yield curve ended the reporting
period inverted, with the one-year Treasury bill trading roughly 15 basis points
below the three-month Treasury bill at the end of January 1996. Aside from the
underlying fundamental factors, movements in market rates were also influenced
by the budget negotiations in Washington and the disruption to the Treasury
auction schedule in October and November of 1995.
The fund was managed somewhat conservatively over the reporting period due to
its relatively recent inception, uncertainty of cash flow, and a market at
expensive levels. However, the fund's portfolio was barbelled in structure,
combining a position in short-term agency discount notes and government agency
floating rate notes with Treasury and agency securities having longer maturities
of six to thirteen months.
*These ratings are obtained after Standard & Poor's Ratings Group evaluates a
number of factors, including credit quality, market price exposure and
management. Standard & Poor's Ratings Group monitors the portfolio weekly for
developments that could cause changes in the ratings. Money market funds and
bond funds rated Aaa by Moody's Investors Service, Inc. are judged to be of an
investment quality similar to Aaa-rated fixed income obligations, that is,
they are judged to be of the best quality. Ratings are subject to change and
do not remove market risks.
**The National Association of Purchasing Manager's Index is a diffusion index
that measures the economic activity of the largest manufacturers in the United
States.
With harsh winter weather likely to be a drag on the economy and inflation
remaining under control, we would anticipate additional easings in monetary
policy by the Fed in the future. Without a notable change in the underlying
economic fundamentals, we would look to reinforce the fund's barbelled structure
should market opportunities permit, and will attempt to continue to maximize
performance through ongoing relative value analysis. However, changing economic
and market developments are continuously monitored to best serve our clients
attracted to the short-term U.S. government market.
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- -------------- --------------------------------------------------------------------------------- --------------
GOVERNMENT AGENCIES--95.8%
- -------------------------------------------------------------------------------------------------
$ 6,000,000 Federal Farm Credit Bank, 5.40%-5.63%, 3/1/1996-12/2/1996 $ 5,999,247
---------------------------------------------------------------------------------
108,370,000 (a)Federal Farm Credit Bank, Discount Notes, 5.35%-5.49%, 2/6/1996-
3/6/1996 108,094,572
---------------------------------------------------------------------------------
14,600,000 Federal Home Loan Bank, 5.37%-6.01%, 5/15/1996-11/13/1996 14,616,327
---------------------------------------------------------------------------------
196,195,000 (a)Federal Home Loan Bank, Discount Notes, 5.15%-5.80%, 2/1/1996-
7/12/1996 195,579,259
---------------------------------------------------------------------------------
6,000,000 (b)Federal Home Loan Bank, Floating Rate Note, 5.75%, 2/1/1996 6,000,067
---------------------------------------------------------------------------------
10,900,000 Student Loan Marketing Association, 5.52%, 2/7/1996 10,897,623
---------------------------------------------------------------------------------
33,700,000 (b)Student Loan Marketing Association, Floating Rate Master Notes, 5.36%,
2/6/1996 33,700,000
--------------------------------------------------------------------------------- --------------
TOTAL GOVERNMENT AGENCIES 374,887,095
--------------------------------------------------------------------------------- --------------
U.S. TREASURY OBLIGATIONS--4.4%
- -------------------------------------------------------------------------------------------------
(A)U.S. TREASURY BILLS--3.2%
---------------------------------------------------------------------------------
13,000,000 4.80%-5.03%, 7/5/1996--11/14/1996 12,614,162
--------------------------------------------------------------------------------- --------------
U.S. TREASURY NOTES--1.2%
---------------------------------------------------------------------------------
4,750,000 6.50%, 9/30/1996 4,787,882
--------------------------------------------------------------------------------- --------------
TOTAL U.S. TREASURY OBLIGATIONS 17,402,044
--------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS, AT AMORTIZED COST(C) $ 392,289,139
--------------------------------------------------------------------------------- --------------
</TABLE>
(a) Each 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
($391,250,696) at January 31, 1996.
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $ 392,289,139
- -------------------------------------------------------------------------------------------------
Cash 117,437
- -------------------------------------------------------------------------------------------------
Income receivable 710,894
- -------------------------------------------------------------------------------------------------
Deferred expenses 28,667
- ------------------------------------------------------------------------------------------------- --------------
Total assets 393,146,137
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Income distribution payable $ 1,793,206
- -----------------------------------------------------------------------------------
Accrued expenses 102,235
- ----------------------------------------------------------------------------------- ------------
Total liabilities 1,895,441
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 391,250,696 shares outstanding $ 391,250,696
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------------------------
Institutional Shares:
($153,750,012 / 153,750,012 shares outstanding) $ 1.00
- ------------------------------------------------------------------------------------------------- --------------
Institutional Service Shares:
($237,500,684 / 237,500,684 shares outstanding) $ 1.00
- ------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Interest $ 5,805,730
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------------------
Investment advisory fee $ 203,365
- ---------------------------------------------------------------------------------------
Administrative personnel and services fee 77,924
- ---------------------------------------------------------------------------------------
Custodian fees 13,616
- ---------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 13,800
- ---------------------------------------------------------------------------------------
Directors'/Trustees' fees 368
- ---------------------------------------------------------------------------------------
Auditing fees 6,624
- ---------------------------------------------------------------------------------------
Legal fees 920
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 28,704
- ---------------------------------------------------------------------------------------
Shareholder services fee--Institutional Shares 100,686
- ---------------------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 153,520
- ---------------------------------------------------------------------------------------
Share registration costs 11,040
- ---------------------------------------------------------------------------------------
Printing and postage 3,680
- ---------------------------------------------------------------------------------------
Insurance premiums 2,944
- ---------------------------------------------------------------------------------------
Taxes 1,288
- ---------------------------------------------------------------------------------------
Miscellaneous 1,472
- --------------------------------------------------------------------------------------- -----------
Total expenses 619,951
- ---------------------------------------------------------------------------------------
Waivers and reimbursements--
- --------------------------------------------------------------------------
Waiver of investment advisory fee $ (203,365)
- --------------------------------------------------------------------------
Waiver of shareholder services fee--Institutional Shares (100,686)
- --------------------------------------------------------------------------
Reimbursement of other operating expenses (54,500)
- -------------------------------------------------------------------------- -----------
Total waivers and reimbursements (358,551)
- --------------------------------------------------------------------------------------- -----------
Net expenses 261,400
- ---------------------------------------------------------------------------------------------------- ------------
Net investment income $ 5,544,330
- ---------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) JANUARY PERIOD ENDED
31, 1996 JULY 31, 1995*
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------
Net investment income $ 5,544,330 $ 679,985
- ----------------------------------------------------------------------- ---------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------------------
Distributions from net investment income
- -----------------------------------------------------------------------
Institutional Shares (2,255,410) (22,005)
- -----------------------------------------------------------------------
Institutional Service Shares (3,288,920) (657,980)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from distributions to shareholders (5,544,330) (679,985)
- ----------------------------------------------------------------------- ---------------------- ----------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------------------
Proceeds from sale of shares 650,326,367 95,754,802
- -----------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 225,917 304,922
- -----------------------------------------------------------------------
Cost of shares redeemed (338,536,695) (16,824,617)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from share transactions 312,015,589 79,235,107
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets 312,015,589 79,235,107
- -----------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------
Beginning of period 79,235,107 0
- ----------------------------------------------------------------------- ---------------------- ----------------
End of period $ 391,250,696 $ 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
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
JANUARY 31, 1996 JULY 31, 1995(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
- --------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------
Net investment income 0.03 0.01
- --------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------
Distributions from net investment income (0.03) (0.01)
- -------------------------------------------------------------------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
- -------------------------------------------------------------------- ------- -------
TOTAL RETURN (B) 2.85% 0.94%
- --------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------
Expenses 0.10%* 0.20%*
- --------------------------------------------------------------------
Net investment income 5.60%* 5.78%*
- --------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.49%* 0.64%*
- --------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------
Net assets, end of period (000 omitted) $153,750 $3,070
- --------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
JANUARY 31, 1996 JULY 31, 1995(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
- --------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------
Net investment income 0.03 0.01
- --------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------
Distributions from net investment income (0.03) (0.01)
- -------------------------------------------------------------------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
- -------------------------------------------------------------------- ------- -------
TOTAL RETURN (B) 2.72% 0.95%
- --------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------
Expenses 0.36%* 0.45%*
- --------------------------------------------------------------------
Net investment income 5.34%* 5.55%*
- --------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.26%* 0.39%*
- --------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------
Net assets, end of period (000 omitted) $237,501 $76,165
- --------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
(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 portfolios. The financial
statements included herein are only those of Government Obligations Tax-Managed
Fund (the "Fund"), a diversified portfolio. The financial statements of the
other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held. The Fund offers two classes of shares; Institutional Shares and
Institutional Service Shares.
(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.
(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 January 31, 1996, capital paid-in aggregated $391,250,696.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS PERIOD
ENDED ENDED
JANUARY 31, JULY 31,
1996 1995*
INSTITUTIONAL SHARES
- -----------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 329,112,371 4,997,518
- -----------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 219,093 2
- -----------------------------------------------------------------------------------
Shares redeemed (178,651,594) (1,927,378)
- ----------------------------------------------------------------------------------- -------------- -------------
Net change resulting from Institutional Shares transactions 150,679,870 3,070,142
- ----------------------------------------------------------------------------------- -------------- -------------
</TABLE>
*For the period from June 2, 1995 (date of initial public investment) to July
31, 1995.
<TABLE>
<CAPTION>
SIX MONTHS PERIOD
ENDED ENDED
JANUARY 31, JULY 31,
1996 1995**
INSTITUTIONAL SERVICE SHARES
- -----------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 321,213,996 90,757,284
- -----------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 6,824 304,920
- -----------------------------------------------------------------------------------
Shares redeemed (159,885,101) (14,897,239)
- ----------------------------------------------------------------------------------- -------------- -------------
Net change resulting from Institutional Service Shares
transactions 161,335,719 76,164,965
- ----------------------------------------------------------------------------------- -------------- -------------
Net change resulting from share transactions 312,015,589 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
advisory fee equal to 0.20% 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--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25%
of daily average net assets of the Fund for the period. The fee paid to FSS is
used to finance certain services for shareholders and to maintain shareholder
accounts. FSS may voluntarily choose to waive any portion of its fee. FSS can
modify or terminate this voluntary waiver at any time at its sole discretion.
For the six months ended January 31, 1996, Institutional Shares fully waived its
shareholder services fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
registered transfer and dividend disbursing agent, Federated Shareholder
Services Company, maintains all necessary shareholder records and receives a fee
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 January 31, 1996,
the Fund paid $0 pursuant to this agreement.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. J. Christopher Donahue
William J. Copeland President
J. Christopher Donahue Edward C. Gonzales
James E. Dowd Executive Vice President
Lawrence D. Ellis, M.D. John W. McGonigle
Edward L. Flaherty, Jr. Executive Vice President and Secretary
Peter E. Madden Richard B. Fisher
Gregor F. Meyer Vice President
John E. Murray, Jr. David M. Taylor
Wesley W. Posvar Treasurer
Marjorie P. Smuts J. Crilley Kelly
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or
any other government agency. Investment in mutual funds involves
investment risk, including possible loss of principal. Although money market
funds seek to maintain a stable net asset value of $1.00 per share, there is no
assurance that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
GOVERNMENT
OBLIGATIONS
TAX-MANAGED
FUND
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JANUARY 31, 1996
[LOGO]
Federated Securities Corp.
- --------------------------
Distributor
A Subsidiary of Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip 60934N856
Cusip 60934N849
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Prime
Obligations Fund, which covers the six-month period ended January 31, 1996.
The report begins with an investment review on the short-term market from the
fund's portfolio manager. Following the investment review, you will find the
fund's portfolio of investments and its financial statements.
In Prime Obligations Fund, your ready cash is at work pursuing daily income
along with the additional advantages of daily liquidity and stability of
principal.* At the end of the reporting period, the fund's portfolio was
invested in high-quality, short-term money market securities including
commercial paper (54.4%), variable rate instruments (20.5%), repurchase
agreements (11.3%), certificates of deposit (5.9%), and bank notes (3.3%).
During the six-month reporting period, dividends paid to shareholders totaled
$0.03 per share. At the end of the reporting period, net assets of the fund
stood at $3.7 billion.
Thank you for your confidence in the daily earning power of Prime Obligations
Fund. As always, your questions and comments are welcome.
Sincerely,
J. Christopher Donahue
President
March 15, 1996
* Although money market mutual funds seek to maintain a stable net asset
value of $1.00 per share, there is no assurance that they will be able
to do so. Investments in mutual funds are neither insured nor guaranteed
by the U.S. government.
INVESTMENT REVIEW
Prime Obligations Fund invests in money market instruments maturing in
thirteen months or less. The average maturity of these securities, computed
on a dollar weighted basis, will be 90 days or less. Portfolio securities
must be rated in the highest short-term rating category by one or more of the
nationally recognized statistical rating organizations or be of comparable
quality to securities having such ratings. The fund is currently rated AAA by
Standard & Poor's Ratings Group, Fitch Investors Service, and Duff & Phelps
and Aaa by Moody's Investors Service, Inc.* thus restricting the fund to an
average maturity of 60 days or less. Typical security types include, but are
not limited to, commercial paper, certificates of deposit, time deposits,
variable rate instruments and repurchase agreements.
Interest rates held steady for the third quarter of 1995 before continuing to
decline modestly in the last several months of the year. The Federal Reserve
Board (the "Fed") took action on December 19, 1995, and lowered the Federal
Funds target rate from 5.75% to 5.50%, precisely the level at which 1995
began. Finally, after market anticipation throughout January 1996, the Fed
lowered the Federal Funds target rate one more time by 25 basis points from
5.50% to 5.25% on January 31, 1996.
The money market yield curve kept a consistent shape throughout the reporting
period. One-month commercial paper rates declined 39 basis points while six-
month rates dropped 36 basis points, continuing a modestly inverted money
market yield curve.
The target average maturity range for Prime Obligations Fund began the
reporting period at 35-45 days but was subsequently lengthened to a 40-50 day
range, reflecting the changing economic and monetary sentiment. In
structuring the fund, there is continued emphasis placed on positioning 30-
35% of the fund's core assets in variable rate demand notes and accomplishing
a modest barbell structure.
During the six months ended January 31, 1996, the net assets of Prime
Obligations Fund increased from $2.959 billion to $3.726 billion while the 7-
day net yield decreased from 5.76% to 5.45%.** The effective average maturity
of the fund on January 31, 1996, was 54 days.
* This rating is obtained after Standard & Poor's evaluates a number of
factors, including credit quality, market price exposure and management.
Standard & Poor's monitors the portfolio weekly for developments that
could cause changes in the ratings. Money market funds rated Aaa by
Moody's are judged to be of an investment quality similar to Aaa-rated
fixed income obligations, that is, they are judged to be of the best
quality. Fitch's money market fund ratings are an assessment of the
safety of invested principal and the ability to maintain a stable market
value of the fund's shares. Ratings are based on an evaluation of several
factors, including credit quality, diversification, and maturity of
assets in the portfolio, as well as management strength and operational
capabilities. An AAA rating from Duff & Phelps is given to funds for
their "credit analysis, ability to evaluate market risk, experienced
portfolio management and sound internal control systems." These ratings
are subject to change and do not remove market risk.
** Performance quoted is based on past performance and is not indicative
of future results. Yield will vary.
PRIME OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
BANK NOTES-3.3%
BANKING-3.3%
$ 10,000,000 Bank of New York, New York, 5.570%, 5/30/1996 $ 9,998,393
16,000,000 Comerica Bank, Detroit, MI, 5.650%, 9/23/1996 15,994,078
98,000,000 Mellon Bank NA, Pittsburgh, 5.750% - 5.810%,
2/28/1996 - 10/16/1996 97,993,505
TOTAL BANK NOTES 123,985,976
CERTIFICATES OF DEPOSIT-5.9%
BANKING-5.9%
100,000,000 Bayerische Hypotheken-Und Wechsel-Bank Ag, 5.740% - 5.770%,
4/12/1996 100,003,002
25,000,000 Commerzbank AG, Frankfurt, 5.650%, 3/5/1996 25,000,658
60,000,000 Royal Bank of Canada, Montreal, 5.766% - 5.770%, 2/5/1996 59,999,971
36,000,000 Swiss Bank Corp., Basle, 5.770%, 2/2/1996 36,000,000
TOTAL CERTIFICATES OF DEPOSIT 221,003,631
(A)COMMERCIAL PAPER-54.4%
BANKING-16.9%
102,300,000 ABN AMRO N.A., Finance, Inc., (Guaranteed by ABN AMRO Bank
N.V., Amsterdam), 5.267% - 5.860%, 2/16/1996 - 7/18/1996 101,365,576
15,000,000 Banque Nationale de Paris (Canada), (Guaranteed by Banque
Nationale de Paris), 5.784%, 5/1/1996 14,789,250
4,145,000 Benedictine Health System, (Lasalle National Bank, Chicago LOC),
5.525%, 4/17/1996 4,097,309
8,000,000 City of Cleveland, (Union Bank of Switzerland, Zurich LOC), 5.606%,
4/3/1996 8,000,000
13,500,000 National Australia Funding, Inc., (Guaranteed by National Australia
Bank, Ltd., Melbourne), 5.369%, 4/18/1996 13,346,963
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)COMMERCIAL PAPER-CONTINUED
BANKING-CONTINUED
$ 30,000,000 PEMEX Capital, Inc., (Swiss Bank Corp., Basle LOC), 5.350% - 5.412%,
4/16/1996 - 4/23/1996 $ 29,657,233
10,000,000 Queensland Alumina Ltd., (Credit Suisse, Zurich LOC), 5.755%,
2/16/1996 9,976,375
121,000,000 Royal Bank of Canada, Montreal, 5.259% - 5.620%,
4/26/1996 - 7/8/1996 118,765,046
95,000,000 Societe Generale North America, Inc., (Guaranteed by Societe
Generale, Paris), 5.463% - 5.744%, 3/18/1996 - 4/16/1996 94,058,517
191,000,000 Svenska Handelsbanken, Inc., (Guaranteed by Svenska
Handelsbanken, Stockholm), 5.233% - 5.475%, 4/9/1996 - 7/22/1996 187,760,258
48,800,000 UBS Finance (Delaware), Inc., (Guaranteed by Union Bank of
Switzerland, Zurich), 5.951%, 2/1/1996 48,800,000
Total 630,616,527
FINANCE - COMMERCIAL-20.4%
157,750,000 Asset Securitization Cooperative Corp., 5.307% - 5.790%,
2/9/1996 - 5/9/1996 156,395,696
71,850,000 Beta Finance, Inc., 5.262% - 5.822%, 2/5/1996 - 7/12/1996 71,518,357
2,000,000 CIESCO, Inc., 5.399%, 4/12/1996 1,978,976
59,000,000 CIT Group Holdings, Inc., 5.696% - 5.783%, 2/12/1996 - 3/22/1996 58,722,194
73,000,000 Corporate Asset Funding Co., Inc. (CAFCO), 5.397%, 4/10/1996 72,254,244
33,775,000 Falcon Asset Securitization Corp., 5.701% - 5.773%,
2/5/1996 - 5/3/1996 33,571,728
176,300,000 General Electric Capital Corp., 5.128% - 5.772%, 2/5/1996 - 9/27/1996 173,729,614
170,062,000 Greenwich Funding Corp., 5.349% - 5.778%, 2/2/1996 - 4/23/1996 169,313,682
22,500,000 PREFCO-Preferred Receivables Funding Co., 5.671% - 5.681%,
3/7/1996 - 3/25/1996 22,350,833
Total 759,835,324
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)COMMERCIAL PAPER-CONTINUED
FINANCE - RETAIL-12.7%
$ 60,000,000 American Express Credit Corp., 5.233% - 5.280%,
7/22/1996 - 10/11/1996 $ 58,084,622
164,000,000 Associates Corp. of North America, 5.322% - 5.738%,
2/23/1996 - 9/26/1996 162,157,166
74,800,000 Ford Credit Receivables Funding, Inc., 5.483% - 5.508%,
4/1/1996 - 4/5/1996 74,102,795
39,000,000 McKenna Triangle National Corp., 5.467%, 4/2/1996 38,643,150
120,000,000 New Center Asset Trust, A1+/P1 Series, 5.370% - 5.752%,
2/28/1996 - 4/19/1996 119,078,292
21,000,000 Norwest Financial, Inc., 5.322%, 9/27/1996 20,286,187
Total 472,352,212
INSURANCE-2.7%
35,000,000 City of New York G.O. 1995-B, (Guaranteed by FGIC), 5.868%,
2/21/1996 35,000,000
53,900,000 CXC, Inc., (Guaranteed by CAPMAC), 5.365% - 5.373%,
4/12/1996 - 4/26/1996 53,274,999
10,000,000 Marsh & McLennan Cos., Inc., 5.214%, 10/11/1996 9,647,206
Total 97,922,205
OIL & OIL FINANCE-1.7%
30,000,000 Chevron U.K. Investment PLC, (Guaranteed by Chevron Corp.),
5.242% - 5.602%, 5/24/1996 - 7/19/1996 29,383,567
35,000,000 Koch Industries, Inc., 5.951%, 2/1/1996 35,000,000
Total 64,383,567
TOTAL COMMERCIAL PAPER 2,025,109,835
SHORT-TERM NOTES-1.6%
FINANCE - COMMERCIAL-0.4%
15,000,000 Beta Finance, Inc., 5.770%, 9/19/1996 15,000,000
FINANCE - EQUIPMENT-0.6%
5,247,719 Case Equipment Loan Trust 1995-B Class A-1, 5.825%, 9/15/1996 5,247,719
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM NOTES-CONTINUED
FINANCE - EQUIPMENT-CONTINUED
$ 2,946,263 Caterpillar Financial Asset Trust 1995-A Class A-1, 5.850%, 8/25/1996 $ 2,946,263
13,213,557 Navistar Financial 1995-A Owner Trust, 5.750%, 11/15/1996 13,213,389
Total 21,407,371
FOOD & BEVERAGE-0.6%
24,000,000 PepsiCo, Inc., 5.830%, 8/27/1996 24,004,899
TOTAL SHORT-TERM NOTES 60,412,270
(B)VARIABLE RATE INSTRUMENTS-20.5%
BANKING-16.4%
4,000,000 500 South Front St. L.P., Series A, (Huntington National Bank,
Columbus, OH LOC), 5.540%, 2/1/1996 4,000,000
6,500,000 500 South Front St. L.P., Series B, (Huntington National Bank,
Columbus, OH LOC), 5.540%, 2/1/1996 6,500,000
14,233,000 Adesa Funding Corp., (Bank One, Indianapolis, IN LOC), 5.510%,
2/1/1996 14,233,000
8,455,000 Alexandria Executive Club L.P., (Huntington National Bank,
Columbus, OH LOC), 5.540%, 2/1/1996 8,455,000
9,000,000 Arrow N.A., Inc., (Huntington National Bank, Columbus, OH LOC),
5.535%, 2/1/1996 9,000,000
4,000,000 Bardstown, KY City of, (Comerica, Inc. LOC), 5.550%, 2/1/1996 4,000,000
16,900,000 Beverly California Corp., (PNC Bank, N.A. LOC), 5.535%, 2/5/1996 16,900,000
1,627,790 Bowling Green Manor L.P., (Huntington National Bank, Columbus,
OH LOC), 5.535%, 2/1/1996 1,627,790
8,215,000 Capital One Funding Corp., Series 1994-A, (Bank One, Columbus,
N.A. LOC), 5.535%, 2/1/1996 8,215,000
21,005,000 Capital One Funding Corp., Series 1994-C, (Bank One, Cleveland,
N.A. LOC), 5.735%, 2/1/1996 21,005,000
9,755,000 Capital One Funding Corp., Series 1994-D, (Liberty National Bancorp,
Inc., KY LOC), 5.535%, 2/1/1996 9,755,000
25,039,000 Capital One Funding Corp., Series 1995-A, (Bank One, Indianapolis,
IN LOC), 5.535%, 2/1/1996 25,039,000
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(B)VARIABLE RATE INSTRUMENTS-CONTINUED
BANKING-CONTINUED
$ 25,446,000 Capital One Funding Corp., Series 1995-B, (Liberty National Bank &
Trust Co. LOC), 5.535%, 2/1/1996 $ 25,446,000
23,334,000 Capital One Funding Corp., Series 1995-F, (Bank One, Cleveland,
N.A. LOC), 5.535%, 2/1/1996 23,334,000
1,052,337 Clyde Manor L.P., (Huntington National Bank, Columbus, OH LOC),
5.535%, 2/1/1996 1,052,337
17,400,000 CMH Funding, (Huntington National Bank, Columbus, OH LOC),
5.495%, 7/3/1996 17,400,000
5,300,000 Crystal Enterprises, Inc., Series 1995, (NBD Bank, N.A., Detroit,
MI LOC), 5.500%, 2/1/1996 5,300,000
3,950,000 Eastwinds Investment, Ltd., (Huntington National Bank, Columbus,
OH LOC), 5.540%, 2/1/1996 3,950,000
7,215,000 Fort Craig Limited Partnership, (Huntington National Bank,
Columbus, OH LOC), 5.535%, 2/1/1996 7,215,000
3,500,000 Gerken Materials, Inc., (Huntington National Bank, Columbus,
OH LOC), 5.535%, 2/1/1996 3,500,000
5,000,000 G.M.H. Enterprises, Inc., (National City Bank, Cleveland, OH LOC),
5.600%, 2/1/1996 5,000,000
2,420,000 Grote Family L.P., (Huntington National Bank, Columbus, OH LOC),
5.535%, 2/1/1996 2,420,000
12,300,000 Hunt Club Apartments, Inc., (Huntington National Bank, Columbus,
OH LOC), 5.540%, 2/7/1996 12,300,000
1,700,000 Jade Sterling Steel Co., Inc., (Huntington National Bank, Columbus,
OH LOC), 5.535%, 2/1/1996 1,700,000
15,595,000 Kenny, Donald R. and Cheryl A., Series 1995-A & B, (National City
Bank, Columbus, OH LOC), 5.535% - 5.540%, 2/1/1996 15,595,000
3,900,000 Kokosing Construction Co., Inc., (National City Bank, Cleveland,
OH LOC), 5.600%, 2/7/1996 3,900,000
3,892,000 Midwest Funding Corp., Series 1991-A Class A-1, (Bank One,
Columbus, N.A. LOC), 5.535%, 2/1/1996 3,892,000
3,510,000 Midwest Funding Corp., Series 1991-B, (Bank One, Columbus,
N.A. LOC), 5.535%, 2/1/1996 3,510,000
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(B)VARIABLE RATE INSTRUMENTS-CONTINUED
BANKING-CONTINUED
$ 4,714,000 Midwest Funding Corp., Series 1991-C, (Bank One, Columbus,
N.A. LOC), 5.535%, 2/1/1996 $ 4,714,000
9,850,000 Midwest Funding Corp., Series 1992-A, (Bank One, Columbus,
N.A. LOC), 5.535%, 2/1/1996 9,850,000
1,608,000 Midwest Funding Corp., Series 1992-B, (Bank One, Columbus,
N.A. LOC), 5.535%, 2/1/1996 1,608,000
4,064,000 Midwest Funding Corp., Series 1992-C, (Bank One, Columbus,
N.A. LOC), 5.535%, 2/1/1996 4,064,000
12,000,000 Mississippi Business Finance Corp., Choctaw Foods, Inc.,
(Rabobank Nederland, Utrecht LOC), 5.700%, 2/7/1996 12,000,000
8,600,000 Mississippi Business Finance Corp., Metalloy Project,
(Comerica Bank, Detroit, MI LOC), 5.535%, 2/1/1996 8,600,000
2,000,000 Mississippi Business Finance Corp., Series 1995 Plantation Pointe,
LP Project, (Amsouth Bank N.A., Birmingham LOC), 5.535%,
2/1/1996 2,000,000
4,745,000 Olen Corp., (National City Bank, Cleveland, OH LOC), 5.600%,
2/7/1996 4,745,000
2,475,000 Orangeburg Convalescent Care Center, Inc., Series A 1995,
(PNC Bank, Kentucky LOC), 5.535%, 2/5/1996 2,475,000
1,700,000 PNC Bank, N.A., 5.420%, 2/1/1996 1,698,749
5,618,000 Primex Funding Corp., (Bank One, Indianapolis, IN LOC), 5.535%,
2/1/1996 5,618,000
10,730,000 Roby Company Ltd. Partnership, (Huntington National Bank,
Columbus, OH LOC), 5.535% - 5.540%, 2/1/1996 10,730,000
13,150,000 Rooker, J.W., (Wachovia Bank of Georgia NA, Atlanta LOC), 5.525%,
2/7/1996 13,150,000
250,000 Scranton Times, L.P., (PNC Bank, Northeast, PA LOC), 5.535%,
2/5/1996 250,000
6,720,000 Shenandoah Partners L.P., (Huntington National Bank, Columbus,
OH LOC), 5.540%, 2/1/1996 6,720,000
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(B)VARIABLE RATE INSTRUMENTS-CONTINUED
BANKING-CONTINUED
$ 20,000,000(c)SMM Trust, Series 1995-B, 5.4375%, 2/1/1996 $ 20,000,000
101,000,000(c)SMM Trust, Series 1995-I, 5.520%, 2/1/1996 100,990,521
20,000,000(c)SMM Trust, Series 1995-L, 5.645%, 2/15/1996 19,997,796
10,000,000(c)SMM Trust, Series 1995-N, 5.925%, 2/15/1996 10,000,000
5,965,000 Springfield Limited Series A, (Union Bank of Switzerland, Zurich
LOC), 5.535%, 2/1/1996 5,965,000
48,000,000 Terry Griffin Gate Partners, Ltd., Series 1995, (Liberty National Bank
& Trust Co. LOC), 5.535%, 2/7/1996 48,000,000
3,308,000 Vista Funding Corp., (Bank One, Akron, N.A. LOC), 5.510%, 2/1/1996 3,308,000
5,583,000 Vista Funding Corp., Series 1994-A, (Fifth Third Bank of
Northwestern OH LOC), 5.535%, 2/1/1996 5,583,000
11,500,000 Vista Funding Corp., Series 1995-B, (Fifth Third Bank of
Northwestern OH LOC), 5.535%, 2/1/1996 11,500,000
10,492,000 Vista Funding Corp., Series 1995-D, (Fifth Third Bank of
Northwestern OH LOC), 5.535%, 2/1/1996 10,492,000
9,480,000 Vista Funding Corp., Series 1995-E, (Bank One, Dayton, N.A. LOC),
5.535%, 2/1/1996 9,480,000
6,000,000 Vulcan, Inc., (Amsouth Bank N.A., Birmingham LOC), 5.640%,
2/1/1996 6,000,000
1,001,431 Wauseon Manor II L.P., (Huntington National Bank, Columbus,
OH LOC), 5.535%, 2/1/1996 1,001,431
3,775,000 Wexner Heritage House, (Huntington National Bank, Columbus,
OH LOC), 5.535%, 2/1/1996 3,775,000
2,445,000 YMCA of Central, OH, (Huntington National Bank, Columbus,
OH LOC), 5.540%, 2/1/1996 2,445,000
Total 611,004,624
ELECTRICAL EQUIPMENT-0.9%
5,839,750 GS Funding Corp., (Guaranteed by General Electric Co.), 5.535%,
2/5/1996 5,839,750
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(B)VARIABLE RATE INSTRUMENTS-CONTINUED
ELECTRICAL EQUIPMENT-CONTINUED
$ 6,000,000 Lauda Air, Luftfahrt, (Guaranteed by General Electric Co.), 5.561%,
2/1/1996 $ 6,000,000
19,918,165 Northwest Airlines, Inc., (Guaranteed by General Electric Co.),
5.561%, 2/5/1996 19,918,165
Total 31,757,915
FINANCE - AUTOMOTIVE-1.7%
6,100,000 Alabama State IDA, Series 1994 Miltope Project, (First Alabama Bank,
Birmingham LOC), 5.535%, 2/1/1996 6,100,000
10,100,000 Alabama State IDA, TRB Wellborn Cabinet, Inc., (Amsouth Bank N.A.,
Birmingham LOC), 5.550%, 2/7/1996 10,100,000
37,000,000 Carco Auto Loan Master Trust, Series 1993-2 Class A-1, 5.685%,
2/15/1996 37,000,000
12,000,000 Money Market Auto Loan Trust, (Guaranteed by CAPMAC), 5.825%,
2/15/1996 12,000,000
Total 65,200,000
INSURANCE-0.8%
30,000,000(c)Peoples Security Life Insurance, 6.030%, 2/1/1996 30,000,000
MUNICIPAL-0.7%
26,300,000(c)City of Columbus, OH, 5.660%, 2/1/1996 26,300,000
TOTAL VARIABLE RATE INSTRUMENTS 764,262,539
SHORT-TERM MUNICIPAL SECURITIES-0.7%
MUNICIPAL-0.7%
26,310,000 New Haven, CT, IDRB (Series 1994-A), 5.300%, 2/1/1996 26,182,646
TIME DEPOSITS-2.5%
BANKING-2.5%
50,000,000 Canadian Imperial Bank of Commerce, Toronto, 5.813%, 2/1/1996 50,000,000
25,000,000 Mellon Bank NA, Pittsburgh, 5.938%, 2/1/1996 25,000,000
16,000,000 Mitsubishi Bank Ltd., Tokyo, 6.000%, 2/1/1996 16,000,000
TOTAL TIME DEPOSITS 91,000,000
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(D)REPURCHASE AGREEMENTS-11.3%
$ 115,050,000 First Union Capital Markets Corp., 5.900%, dated 1/31/1996,
due 2/1/1996 $ 115,050,000
150,250,000 Sanwa Securities USA Co., L.P., 5.900%, dated 1/31/1996,
due 2/1/1996 150,250,000
3,870,000 State Street Bank and Trust Co., 5.900%, dated 1/31/1996,
due 2/1/1996 3,870,000
152,000,000 Swiss Bank Corp., New York, 5.900%, dated 1/31/1996,
due 2/1/1996 152,000,000
TOTAL REPURCHASE AGREEMENTS 421,170,000
TOTAL INVESTMENTS, AT AMORTIZED COST(E) $ 3,733,126,897
</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) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At the end of the period, these
securities amounted to $207,288,317 which represents 5.6% of net assets.
(d) The 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 ($3,726,074,160) at January 31, 1996.
The following acronyms are used throughout this portfolio:
CAPMAC - Capital Municipal Assurance Corporation
FGIC - Financial Guaranty Insurance Company
GO - General Obligation
IDA - Industrial Development Authority
IDRB - Industrial Development Revenue Bond
LOC - Letter of Credit
LP - Limited Partnership
PLC - Public Limited Company
TRB - Taxable Revenue Bond
(See Notes which are an integral part of the Financial Statements)
PRIME OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments in repurchase agreements $ 421,170,000
Investments in securities 3,311,956,897
Total investments in securities, at amortized cost and value $3,733,126,897
Income receivable 11,920,596
Total assets 3,745,047,493
LIABILITIES:
Income distribution payable 16,751,727
Payable to Bank 1,988,153
Accrued expenses 233,453
Total liabilities 18,973,333
NET ASSETS for 3,726,074,160 shares outstanding $3,726,074,160
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$2,898,497,044 / 2,898,497,044 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$827,577,116 / 827,577,116 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME OBLIGATIONS FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest $101,054,358
EXPENSES:
Investment advisory fee $3,442,898
Administrative personnel and services fee 1,302,552
Custodian fees 139,994
Transfer and dividend disbursing agent fees and expenses 67,358
Directors'/Trustees' fees 26,600
Auditing fees 7,624
Legal fees 23,624
Portfolio accounting fees 134,109
Shareholder services fee-Institutional Shares 3,571,919
Shareholder services fee-Institutional Service Shares 731,703
Share registration costs 314,820
Printing and postage 14,564
Insurance premiums 34,496
Taxes 20,104
Miscellaneous 10,032
Total expenses 9,842,397
Waivers-
Waiver of investment advisory fee $(2,020,133)
Waiver of shareholder services fee-Institutional Shares (3,571,919)
Total waivers (5,592,052)
Net expenses 4,250,345
Net investment income $ 96,804,013
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME OBLIGATIONS FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED
1996 JULY 31, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS-
Net investment income $ 96,804,013 $ 122,465,120
DISTRIBUTIONS TO SHAREHOLDERS-
Distributions from net investment income
Institutional Shares (80,956,690) (109,911,005)
Institutional Service Shares (15,847,323) (12,554,115)
Change in net assets resulting from distributions
to shareholders (96,804,013) (122,465,120)
SHARE TRANSACTIONS-
Proceeds from sale of shares 17,588,692,354 28,128,464,929
Net asset value of shares issued to shareholders in payment
of distributions declared 24,787,766 34,127,138
Cost of shares redeemed (16,846,157,278) (26,464,207,220)
Change in net assets resulting from share transactions 767,322,842 1,698,384,847
Change in net assets 767,322,842 1,698,384,847
NET ASSETS:
Beginning of period 2,958,751,318 1,260,366,471
End of period $ 3,726,074,160 $ 2,958,751,318
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS-INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
1996 1995 1994 1993 1992 1991 1990(A)
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.06 0.03 0.03 0.05 0.07 0.03
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (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 $ 1.00
TOTAL RETURN(B) 2.88% 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% 0.20%*
Net investment income 5.67%* 5.60% 3.47% 3.20% 4.53% 6.54% 8.21%*
Expense waiver/reimbursement(c) 0.37%* 0.38% 0.14% 0.09% 0.10% 0.24% 0.68%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $2,898,497 $2,457,797 $1,250,979 $1,098,159 $917,418 $473,593 $34,777
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and
net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
PRIME OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS-INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
1996 1995 1994(A)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.003
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.003)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.75% 5.38% 0.30%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.46%* 0.45% 0.34%*
Net investment income 5.42%* 5.66% 4.68%*
Expense waiver/reimbursement(c) 0.12%* 0.13% 0.14%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $827,577 $500,954 $9,387
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and
net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
PRIME OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996 (UNAUDITED)
(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 portfolios. The
financial statements included herein are only those of Prime Obligations Fund
(the "Fund"), a diversified portfolio. The financial statements of the other
portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held. The Fund offers two classes of shares: Institutional Shares
and Institutional Service Shares.
(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 uses the amortized cost method to value
its portfolio securities 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
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.
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.
PRIME 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.
RESTRICTED SECURITIES-Restricted securities are securities that may
only be resold upon registration under federal securities laws or in
transactions exempt from such registration. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. In some cases, the restricted securities may be resold
without registration upon exercise of a demand feature. Such
restricted securities may be determined to be liquid under criteria
established by the Board of Trustees. The Fund will not incur any
registration costs upon such resales. Restricted securities are valued
at amortized cost in accordance with Rule 2a-7 under the Investment
Company Act of 1940.
Additional information on each restricted security held at January 31,
1996 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
<S> <C> <C>
City of Columbus, OH, 5.660%, 2/1/1996 1/30/96 $ 26,300,000
Peoples Security Life Insurance, 6.030%, 2/1/1996 7/6/95-10/24/95 30,000,000
SMM Trust, Series 1995-B 8/4/95 20,000,000
SMM Trust, Series 1995-I 5/26/95 100,990,521
SMM Trust, Series 1995-L 8/4/95 19,997,796
SMM Trust, Series 1995-N 11/3/95 10,000,000
</TABLE>
OTHER-Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for
each class of shares. At January 31, 1996, capital paid-in aggregated
$3,726,074,160.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31, JULY 31,
INSTITUTIONAL SHARES 1996 1995
<S> <C> <C>
Shares sold 13,709,795,163 23,850,176,668
Shares issued to shareholders in payment of distributions declared 19,296,826 27,352,248
Shares redeemed (13,288,392,118) (22,670,711,004)
Net change resulting from Institutional Share transactions 440,699,871 1,206,817,912
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31, JULY 31,
INSTITUTIONAL SERVICE SHARES 1996 1995
<S> <C> <C>
Shares sold 3,878,897,191 4,278,288,261
Shares issued to shareholders in payment of distributions declared 5,490,940 6,774,890
Shares redeemed (3,557,765,160) (3,793,496,216)
Net change resulting from Institutional Service Share transactions 326,622,971 491,566,935
Net change resulting from share transactions 767,322,842 1,698,384,847
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE-Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to 0.20% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE-Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during
the period of the Administrative Services Agreement shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE-Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to
0.25% of average daily net assets of the Fund for the period. This fee paid
to FSS is used to finance certain services for shareholders and to maintain
the shareholder accounts. FSS may voluntarily choose to waive any portion of
its fee. FSS can modify or terminate this voluntary waiver at any time at its
sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES-FServ, through its
registered transfer and dividend disbursing agent, Federated Shareholder
Services Company, maintains all necessary shareholder records and receives a
fee 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.
TRUSTEES OFFICERS
<TABLE>
<S> <S>
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. J. Christopher Donahue
William J. Copeland President
J. Christopher Donahue Edward C. Gonzales
James E. Dowd Executive Vice President
Lawrence D. Ellis, M.D. John W. McGonigle
Edward L. Flaherty, Jr. Executive Vice President and Secretary
Peter E. Madden Richard B. Fisher
Gregor F. Meyer Vice President
John E. Murray, Jr. David M. Taylor
Wesley W. Posvar Treasurer
Marjorie P. Smuts J. Crilley Kelly
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Tax-Free
Obligations Fund, which covers the six-month period ended January 31, 1996. The
report begins with an investment review on the short-term tax-free market from
the fund's portfolio manager. Following the investment review, you will find the
fund's portfolio of investments and its financial statements.
In Tax-Free Obligations Fund, your ready cash is at work pursuing daily income
free of federal income tax--along with the additional advantages of daily
liquidity and stability of principal--by investing in short-term municipal
securities.*
During the six-month reporting period, tax-free dividends paid to shareholders
totaled $0.02 per share. At the end of the reporting period, net assets of the
fund stood at $1.8 billion.
Thank you for your confidence in the daily earning power of Tax-Free Obligations
Fund. As always, your questions and comments are welcome.
Sincerely,
J. Christopher Donahue
President
March 15, 1996
*Although money market mutual funds seek to maintain a stable net asset value of
$1.00 per share, there is no assurance that they will be able to do so.
Investments in mutual funds are neither insured nor guaranteed by the U.S.
government. Income may be subject to the federal alternative minimum tax.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Tax-Free Obligations Fund, which is rated AAA by Fitch Investors Service,* is
invested in
high quality, short-term tax-exempt debt securities. For the six-month reporting
period ended
January 31, 1996, the net assets of the fund increased from $1.547 billion to
$1.815 billion. The effective average maturity of the fund on January 31, 1996
was 47 days.
The semi-annual reporting period brought continued signs of moderation in the
economy, as softening in the manufacturing, housing, and consumer sectors
restrained growth. Gross Domestic Product came in below the 2-2-1/2% pace
generally considered to be the potential, noninflationary rate of growth for the
economy. The monthly National Association of Purchasing Manager's Index**
registered readings of below 50 since July 1995, levels thought to be indicative
of a contracting economy. Inflation remained quite friendly, with prices at the
consumer level rising less than 3%. Against this backdrop, the Federal Reserve
Board (the "Fed") continued to ease monetary policy during the final months of
the reporting period. On December 19, 1995 the Fed lowered the Federal Funds
target rate from 5.75% to 5.50%, precisely the level at which 1995 began. After
market anticipation throughout January 1996, the Fed took action again on
January 31, 1996 and lowered the Federal Funds target rate 25 basis points from
5.50% to 5.25%.
The combination of a sluggish economy and benign inflation drove short-term
interest rates downward over the reporting period, as the market anticipated the
easing by the Fed in an attempt to move monetary policy closer to a neutral
stance. The yield on the one-year Treasury bill fell by more than 65 basis
points over the reporting period, from 5.70% to close to 5.05%. Over the
reporting period, municipal fixed rate note yields mirrored the rally in
treasury market. The Bond Buyer Note Index+, a proxy for one-year note yields,
started the period at 3.85%, traded in a narrow range of 3.80-3.95% until early
November 1995, before declining steadily to end the reporting period at 3.36%.
Fed policy, low supply conditions and the desire of money fund portfolio
managers to extend the average maturities of their funds contributed to the
rally. Over the reporting period, one-year note levels averaged 69% of one-year
Treasury bills which is attractive for an investor in a 31% or higher tax
bracket.
Over the reporting period, the movement of tax-exempt yields on variable rate
demand notes (VRDNs), which comprise 50% or more of the fund's assets, was
affected by the cuts in the Federal Funds target rate and market technicals.
Supply and demand imbalances from large amounts of bond calls and maturities,
tax payments, and year-end fund redemptions caused yields on VRDNs to display
significant volatility. For example, in the first week of December 1995, rates
fell from a 3.95% to 3.37% due to large amounts of bond calls and maturities,
resulting in a temporary surge in demand. Rates then quickly reversed direction
in mid-December due to corporate tax-payments and year-end selling, causing them
to spike to 5.10% by month's end. Despite this volatility, yields
* Fitch's money market fund ratings are an assessment of the safety of invested
principal and the ability to maintain a stable market value of the fund's
shares. Ratings are based on an evaluation of several factors, including
credit quality, diversification, and maturity of assets in the portfolio, as
well as management strength and operational capabilities. This rating,
however, is subject to change and does not remove market risk.
** The National Association of Purchasing Manager's Index is a diffusion index
that measures the economic activity of the largest manufacturers in the
United States.
+ The Bond Buyer's Index is a standard against which municipal bond yields are
measured.
on VRDNs averaged 67% of seven-day taxable paper, which is attractive for an
investor in a 35% tax bracket.
In this interest rate environment, the fund's average maturity was in a neutral
range of 45-55 days. Looking forward, short term interest rates should trade in
a narrow band based on expectations of steady to modestly easing monetary
policy. However, changing economic and market developments are continuously
monitored to best serve our clients attracted to the short-term municipal
market.
TAX-FREE OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
SHORT-TERM SECURITIES--102.3%
-------------------------------------------------------------
ALABAMA--7.0%
-------------------------------------------------------------
$ 9,010,000 Alabama Special Care Facilities Finance Authority Weekly
VRDNs (Providence Hospital)/(Daughters of Charity GTD) VMIG1 $ 9,010,000
-------------------------------------------------------------
3,000,000 Birmingham, AL IDA, Revenue Refunding Bonds Weekly VRDNs
(S.P. Hotel Company)/(Amsouth Bank N.A., Birmingham LOC) VMIG1 3,000,000
-------------------------------------------------------------
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
-------------------------------------------------------------
1,500,000 Birmingham, AL, GO (Series 1992A) Weekly VRDNs (First Alabama
Bank, Birmingham LOC) A-1+ 1,500,000
-------------------------------------------------------------
1,000,000 Bon Air, AL IDB Weekly VRDNs (Avondale Mills, Inc.)/(Trust
Company Bank, Atlanta LOC) A-1+ 1,000,000
-------------------------------------------------------------
3,500,000 Cherokee, AL IDB, IDR Refunding Bonds (Series 1993) Weekly
VRDNs (BOC Group, Inc.)/(Wachovia Bank of Georgia NA, Atlanta
LOC) A-1+ 3,500,000
-------------------------------------------------------------
3,000,000 Decatur, AL IDB, Revenue Refunding Bonds (Series 1993) Weekly
VRDNs (Allied-Signal, Inc.) A-1 3,000,000
-------------------------------------------------------------
6,550,000 Eutaw, AL IDB Weekly VRDNs (Mississippi Power
Co.)/(Mississippi Power Co. GTD) VMIG1 6,550,000
-------------------------------------------------------------
9,295,000 Homewood, AL IDA Weekly VRDNs (Mountain Brook Inn (Homewood
AL))/(SouthTrust Bank of Alabama, Birmingham LOC) P-1 9,295,000
-------------------------------------------------------------
4,800,000 Huntsville, AL Health Care Authority/Health Care Facilities,
(Series 1994A) Weekly VRDNs (MBIA INS)/(Amsouth Bank N.A.,
Birmingham LIQ) A-1 4,800,000
-------------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
ALABAMA--CONTINUED
-------------------------------------------------------------
$ 5,700,000 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 $ 5,700,000
-------------------------------------------------------------
275,000 Huntsville, AL IDA Weekly VRDNs (Parkway Project (Huntsville,
AL))/(First Alabama Bank, Birmingham LOC) A-1+ 275,000
-------------------------------------------------------------
2,931,000 Irondale, AL IDB, Variable Fixed Rate Revenue Bonds (Series
1989) Weekly VRDNs (Collateral Mortgage, Ltd.)/(SouthTrust
Bank of Alabama, Birmingham LOC) P-1 2,931,000
-------------------------------------------------------------
14,000,000 Jefferson County, AL, GO Warrants (Series 1996) Weekly VRDNs
(Bayerische Landesbank Girozentrale LOC) A-1+ 14,000,000
-------------------------------------------------------------
10,000,000 Jefferson County, AL, Sewer Revenue Warrants (Series 1995-A)
Weekly VRDNs (Bayerische Landesbank Girozentrale LOC) A-1+ 10,000,000
-------------------------------------------------------------
3,900,000 Madison, AL IDA, (Series A) Weekly VRDNs (Executive
Inn)/(Amsouth Bank N.A., Birmingham LOC) A-1 3,900,000
-------------------------------------------------------------
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
-------------------------------------------------------------
2,500,000 Mobile, AL IDA Weekly VRDNs (McRae's Industries,
Inc.)/(Nationsbank, N.A. (Carolinas) LOC) A-1 2,500,000
-------------------------------------------------------------
3,500,000 Mobile, AL IDB, PCR (Series 1993A) Weekly VRDNs (Alabama
Power Co. GTD) A-1 3,500,000
-------------------------------------------------------------
9,250,000 Mobile, AL IDB, PCR (Series 1993B) Weekly VRDNs (Alabama
Power Co. GTD) A-1 9,250,000
-------------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
ALABAMA--CONTINUED
-------------------------------------------------------------
$ 20,000,000 Montgomery, AL BMC Special Care Facilities Finance Authority,
(Series 94A) Weekly VRDNs (Baptist Medical Center,
AL)/(Amsouth Bank N.A., Birmingham LOC) VMIG1 $ 20,000,000
-------------------------------------------------------------
970,000 Tuscaloosa County, AL Port Authority, (Series 1989A) Weekly
VRDNs (Capstone Hotel Ltd.)/ (SouthTrust Bank of Alabama,
Birmingham LOC) P-1 970,000
-------------------------------------------------------------
1,480,000 Tuscaloosa, AL IDB, Revenue Refunding Bonds (Series 1994)
Weekly VRDNs (Harco, Inc.)/ (Amsouth Bank N.A., Birmingham
LOC) P-1 1,480,000
-------------------------------------------------------------
5,755,000 Vincent, AL IDB Weekly VRDNs (Headquarters Partnership
Project)/(National Australia Bank, Ltd., Melbourne LOC) P-1 5,755,000
------------------------------------------------------------- ----------------
Total 126,556,000
------------------------------------------------------------- ----------------
ARIZONA--3.9%
-------------------------------------------------------------
16,000,000 Apache County, AZ IDA, 1983 (Series A) Weekly VRDNs (Tucson
Electric Power Co.)/(Barclays Bank PLC, London LOC) A-1+ 16,000,000
-------------------------------------------------------------
7,300,000 Apache County, AZ Weekly VRDNs (Tucson Electric Power
Co.)/(Chemical Bank, New York LOC) P-1 7,300,000
-------------------------------------------------------------
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
-------------------------------------------------------------
6,500,000 Coconino County, AZ Pollution Control Corporation, PCR
Refunding Bonds (Series 1995E) Weekly VRDNs (Nevada Power
Co.)/(Societe Generale, Paris LOC) A-1+ 6,500,000
-------------------------------------------------------------
13,500,000 Pima County, AZ IDA Weekly VRDNs (Tucson Electric Power
Co.)/(Barclays Bank PLC, London LOC) VMIG1 13,500,000
-------------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
ARIZONA--CONTINUED
-------------------------------------------------------------
$ 23,600,000 Pima County, AZ IDA, Floating Rate Notes (Series A) Weekly
VRDNs (Tucson Electric Power Co.)/ (Barclays Bank PLC, London
LOC) VMIG1 $ 23,600,000
------------------------------------------------------------- ----------------
Total 70,900,000
------------------------------------------------------------- ----------------
ARKANSAS--0.1%
-------------------------------------------------------------
1,000,000 Sheridan, AR IDA Weekly VRDNs (H.H. Robertson Co.)/(PNC Bank,
N.A. LOC) VMIG1 1,000,000
-------------------------------------------------------------
CALIFORNIA--11.8%
-------------------------------------------------------------
27,350,000 California School Cash Reserve Program Authority, (Series
1995 A), 4.75% TRANs (MBIA INS), 7/3/1996 SP-1+ 27,453,214
-------------------------------------------------------------
43,000,000 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 NA, New York, Credit Suisse, Zurich, Morgan Guaranty
Trust Co., New York, National Westminster Bank, PLC, London,
Societe Generale, Paris, Sumitomo Bank Ltd., Osaka, Swiss
Bank Corp., Basle, Toronto-Dominion Bank and Westdeutsche
Landesbank Girozentrale LOCs),
4/25/1996 SP-1 43,086,051
-------------------------------------------------------------
12,995,000 Kern County, CA Board of Education, 4.50% TRANs, 6/28/1996 SP-1+ 13,022,804
-------------------------------------------------------------
4,000,000 Livermore Valley, CA USD, TRANS (Series 1995-96), 4.75%,
9/19/1996 MIG1 4,016,965
-------------------------------------------------------------
10,000,000 Los Angeles County, CA Unified School District, 4.50% TRANs,
7/3/1996 SP-1+ 10,032,239
-------------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
CALIFORNIA--CONTINUED
-------------------------------------------------------------
$ 34,000,000 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., Basle, Union Bank of
Switzerland, Zurich and Westdeutsche Landesbank Girozentrale
LOCs), 7/1/1996 SP-1 $ 34,098,080
-------------------------------------------------------------
23,500,000 Los Angeles, CA Wastewater System, Tender Option Certificates
(Series 1995H) Weekly VRDNs (MBIA INS)/(Swiss Bank Corp.,
Basle LIQ) A-1+ 23,500,000
-------------------------------------------------------------
40,850,000 Orange County, CA IDA, (Series 1991A) Weekly VRDNs (The
Lakes)/(Citibank NA, New York LOC) A-1 40,850,000
-------------------------------------------------------------
7,000,000 Temecula Valley Unified School District, CA, 4.50% TRANs,
7/5/1996 SP-1+ 7,014,239
-------------------------------------------------------------
10,800,000 Ventura County, CA Community College District, 4.50% TRANs,
6/28/1996 SP-1+ 10,823,108
------------------------------------------------------------- ----------------
Total 213,896,700
------------------------------------------------------------- ----------------
COLORADO--1.4%
-------------------------------------------------------------
2,625,000 Denver (City & County), CO, 4.50% TOBs (Blake Street
Compendium)/(Norwest Bank Minnesota, Minneapolis LOC),
Optional Tender 12/15/1996 A-1+ 2,625,000
-------------------------------------------------------------
23,800,000 Moffat County, CO, PCR (Series 1984) Weekly VRDNs (Columbus
UTE Electric Associates.)/ (National Rural Utilities
Cooperative Finance Corp. GTD) A-1 23,800,000
------------------------------------------------------------- ----------------
Total 26,425,000
------------------------------------------------------------- ----------------
CONNECTICUT--0.2%
-------------------------------------------------------------
1,000,000 Connecticut Development Health Care Facilities Weekly VRDNs
(Independence Living)/(Chemical Bank, New York LOC) VMIG1 1,000,000
-------------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
CONNECTICUT--CONTINUED
-------------------------------------------------------------
$ 2,000,000 Connecticut State Transportation Infrastructure Authority
Weekly VRDNs (Connecticut State)/ (Commerzbank AG, Frankfurt
LOC) A-1 $ 2,000,000
------------------------------------------------------------- ----------------
Total 3,000,000
------------------------------------------------------------- ----------------
FLORIDA--11.4%
-------------------------------------------------------------
5,500,000 Dade County, FL HFA, Hospital Revenue Bonds (Series 1995)
Weekly VRDNs (Miami Children's Hospital Project)/(AMBAC INS)
(Trust & Co. of Atlanta LIQ) A-1+ 5,500,000
-------------------------------------------------------------
1,200,000 Dade County, FL IDA, Industrial Development Revenue Refunding
Bonds Weekly VRDNs (Continental Farms, Inc.)/(Nationsbank,
N.A. (Carolinas) LOC) P-1 1,200,000
-------------------------------------------------------------
55,520,000 Dade County, FL Water & Sewer System Weekly VRDNs (FGIC
INS)/(Commerzbank AG, Frankfurt LIQ) A-1 55,520,000
-------------------------------------------------------------
3,285,000 Florida State Board of Education Administration, (CR
49)/(Series 1989A), 3.60% TOBs (Citibank NA, New York LIQ),
Optional Tender 6/1/1996 NR(2) 3,285,000
-------------------------------------------------------------
4,235,000 Florida State Board of Education Administration, (CR49D),
3.60% TOBs (Citibank NA, New York LIQ), Optional Tender
6/1/1996 NR(2) 4,235,000
-------------------------------------------------------------
1,210,000 Florida State Board of Education Administration, (CR55),
(Series 1989A), 3.60% TOBs (Citibank NA, New York LIQ),
Optional Tender 6/1/1996 NR(2) 1,210,000
-------------------------------------------------------------
17,975,000 Hillsborough County, FL IDA, PCR Refunding Bonds (Series
1994) Weekly VRDNs (Tampa Electric Company)/(MBIA
INS)/(Citibank N.A. LIQ) NR(2) 17,975,000
-------------------------------------------------------------
26,900,000 Jacksonville Electric Authority, (Series D-3), 3.35% CP
(Credit Suisse, Zurich LIQ), Mandatory Tender 3/20/1996 A-1+ 26,900,000
-------------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
FLORIDA--CONTINUED
-------------------------------------------------------------
$ 14,070,000 Jacksonville Health Facilities Authority, Hospital Revenue
Improvement Bonds (Series 1994) Weekly VRDNs (Baptist Medical
Center, FL)/(First Union National Bank of Florida LOC) A-1+ $ 14,070,000
-------------------------------------------------------------
8,700,000 Jacksonville, FL Health Facilities Authority, Hospital
Revenue Bonds (Series 1993) Daily VRDNs (Baptist Medical
Center, FL)/(MBIA INS) VMIG1 8,700,000
-------------------------------------------------------------
3,000,000 Key West, FL Community Redevelopment Authority Weekly VRDNs
(Pier House Joint Venture)/ (PNC Bank, N.A. LOC) P-1 3,000,000
-------------------------------------------------------------
1,900,000 Manatee County, FL HFA, Multi-Family Mortgage Revenue
Refunding Bonds (Series 1989A) Weekly VRDNs (Hampton/McGuire
L.P.)/(Nationsbank, N.A. (Carolinas) LOC) A-1 1,900,000
-------------------------------------------------------------
12,000,000 Orange County, FL, Health Facilities Authority, Variable Rate
Demand Revenue Bonds (Series 1995) Weekly VRDNs (Adventist
Health System)/ (Rabobank Nederland, Utrecht LOC) A-1+ 12,000,000
-------------------------------------------------------------
26,945,000 Orlando, FL Utilities Commission, Variable Rate Demand Water
and Electric Revenue BANS (Series 1991) Weekly VRDNs (Morgan
Guaranty Trust Co., New York LIQ) A-1+ 26,945,000
-------------------------------------------------------------
5,500,000 Pinellas County, FL Health Facility Authority, (Series 1987)
Weekly VRDNs (St. Mark Village Project)/(Nationsbank of
Florida, N.A. LOC) A-1 5,500,000
-------------------------------------------------------------
13,400,000 Southeast Volusia Hospital District, Revenue Bonds (Series
1995) Weekly VRDNs (Bert Fish Medical Center
(FL))/(SouthTrust Bank of Alabama, Birmingham LOC) A-1 13,400,000
-------------------------------------------------------------
5,000,000 Suwannee County, FL, (Series 1989) Weekly VRDNs (Advent
Christian Village Project)/(Barnett Bank of Jacksonville LOC) VMIG1 5,000,000
------------------------------------------------------------- ----------------
Total 206,340,000
------------------------------------------------------------- ----------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
GEORGIA--2.3%
-------------------------------------------------------------
$ 13,200,000 Albany-Dougherty County, GA Hospital Authority, Refunding
Revenue Anticipation Certificates (Series 1991) Weekly VRDNs
(AMBAC INS)/(Credit Local de France LIQ) A-1 $ 13,200,000
-------------------------------------------------------------
4,000,000 Atlanta, GA, Urban Residential Finance Authority, Residential
Construction Revenue Bonds, (Series 1995) Weekly VRDNs
(Summerhill Neighborhood Bond Program)/(First Union National
Bank, Charlotte, N.C. LOC) A-1 4,000,000
-------------------------------------------------------------
1,600,000 De Kalb County, GA, (Series 1992) Weekly VRDNs (American
Cancer Society, GA)/(Trust Company Bank, Atlanta LOC) P-1 1,600,000
-------------------------------------------------------------
4,470,000 Fulton County, GA Housing Authority, (Series 1994B) Weekly
VRDNs (Champions Green Apartments Project)/(SouthTrust Bank
of Alabama, Birmingham LOC) P-1 4,470,000
-------------------------------------------------------------
5,000,000 Fulton County, GA Housing Authority, Multifamily Housing
Revenue Refunding Bonds (Series 1994) Weekly VRDNs (Spring
Creek Crossing Project)/ (Wachovia Bank of Georgia NA,
Atlanta LOC) A-1+ 5,000,000
-------------------------------------------------------------
1,370,000 Georgia State HFA, Single Family Mortgage Revenue, 3.55% TOBs
(Citibank NA, New York LIQ), Optional Tender 6/1/1996 NR(2) 1,370,000
-------------------------------------------------------------
12,000,000 Municipal Electric Authority of Georgia, (Series B), 4.25%
TOBs, Optional Tender 6/1/1996 VMIG1 12,005,753
------------------------------------------------------------- ----------------
Total 41,645,753
------------------------------------------------------------- ----------------
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
------------------------------------------------------------- ----------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
ILLINOIS--7.6%
-------------------------------------------------------------
$ 12,685,000 Chicago O'Hare International Airport, Second Lien Revenue
Bonds, 1984 (Series B) Weekly VRDNs (Societe Generale, Paris
LOC) P-1 $ 12,685,000
-------------------------------------------------------------
3,000,000 Illinois Development Finance Authority Weekly VRDNs (Newlywed
Food)/(Mellon Bank NA, Pittsburgh LOC) A-1 3,000,000
-------------------------------------------------------------
15,000,000 Illinois Development Finance Authority, Var/Fixed Rate Demand
Revenue Bonds (Series 1994) Weekly VRDNs (Chicago Symphony
Orchestra Project)/ (Northern Trust Co., Chicago, IL and
Sanwa Bank Ltd, Osaka LOCs) A-1+ 15,000,000
-------------------------------------------------------------
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, 4.00% CP (Field
Museum of Natural History)/(Sanwa Bank Ltd, Osaka LOC),
Mandatory Tender 3/7/1996 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
-------------------------------------------------------------
16,100,000 Illinois Health Facilities Authority Weekly VRDNs (OSF Health
Care Systems) VMIG1 16,100,000
-------------------------------------------------------------
20,200,000 Illinois Health Facilities Authority, (Series 1989A) Weekly
VRDNs (Methodist Health Services Corp.)/ (Fuji Bank, Ltd.,
Tokyo LOC) A-1 20,200,000
-------------------------------------------------------------
35,000,000 Illinois Health Facilities Authority, Variable Rate Demand
Revenue Bonds (Series 1985B) Weekly VRDNs (OSF Health Care
Systems)/(Bank of America Illinois LIQ) VMIG1 35,000,000
-------------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
ILLINOIS--CONTINUED
-------------------------------------------------------------
$ 15,000,000 Lisle (Village of), IL, Multi-Family Housing Mortgage Revenue
Bonds, (1985 Series A) Weekly VRDNs (Four Lakes
Project)/(Chemical Bank, New York LOC) A-1 $ 15,000,000
------------------------------------------------------------- ----------------
Total 138,985,000
------------------------------------------------------------- ----------------
INDIANA--3.6%
-------------------------------------------------------------
1,115,000 Dale, IN IDA Weekly VRDNs (Spencer Industries)/ (National
City Bank, Kentucky LOC) P-1 1,115,000
-------------------------------------------------------------
6,350,000 Elkhart, IN, Community Schools, Tax Anticipation Time
Warrants, 4.00% TANs, 12/31/1996 NR(2) 6,372,404
-------------------------------------------------------------
14,500,000 Fort Wayne, IN Community Schools, Tax Anticipation Time
Warrants, 3.75% TANs, 12/31/1996 SP-1+ 14,532,008
-------------------------------------------------------------
30,000,000 Indiana Bond Bank, Advance Funding Program Notes (Series 1996
A-2), 4.25% BANs, 1/9/1997 SP-1+ 30,204,300
-------------------------------------------------------------
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
-------------------------------------------------------------
3,250,000 Indianapolis, IN Local Public Improvement, Bond Bank Notes
(1995E), 4.50% BANs, 7/11/1996 SP-1+ 3,261,213
-------------------------------------------------------------
2,000,000 Indianapolis, IN Local Public Improvement, Bond Bank Notes
(Series 1995 H), 4.50% BANs, 7/11/1996 SP-1+ 2,006,900
-------------------------------------------------------------
6,000,000 Washington Township, IN, Temporary Loan Warrants (Series
1996), 4.00% TRANs, 6/28/1996 NR(2) 6,013,200
------------------------------------------------------------- ----------------
Total 65,950,025
------------------------------------------------------------- ----------------
IOWA--0.4%
-------------------------------------------------------------
7,425,000 Iowa School Corporations, Warrant Certificates (Series
1995-96 B), 4.25% TRANs (FSA INS),
1/30/1997 SP-1+ 7,485,811
------------------------------------------------------------- ----------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
KANSAS--0.6%
-------------------------------------------------------------
$ 10,000,000 La Cygne, KS Weekly VRDNs (Kansas City Power And Light Co.) A-1 $ 10,000,000
------------------------------------------------------------- ----------------
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--0.3%
-------------------------------------------------------------
5,025,000 Louisiana PFA, Advance Funding Notes/School Board Advance
Funding Program (Series 1995 B), 4.50% TANs (St. Charles
Parish, LA), 8/29/1996 SP-1 5,037,512
------------------------------------------------------------- ----------------
MARYLAND--3.0%
-------------------------------------------------------------
3,000,000 Baltimore County, MD, Puttable T-E Rec, Series 20, Der
Inverse T-E Rec (Series-20) Weekly VRDNs (Morgan Guaranty
Trust Co., New York LIQ) VMIG1 3,000,000
-------------------------------------------------------------
1,700,000 Baltimore, MD PCR Weekly VRDNs (SCM Plants, Inc.)/(Barclays
Bank PLC, London LOC) A-1+ 1,700,000
-------------------------------------------------------------
1,500,000 Frederick County, MD, Variable Rate Demand/ Fixed Rate
Revenue Bonds (Series 1995) Weekly VRDNs (Sheppard Pratt
Residential Treatment Facility)/(Societe Generale, Paris LOC) P-1 1,500,000
-------------------------------------------------------------
1,000,000 Maryland Health & Higher Educational Facilities Authority,
(Series 1985B) Weekly VRDNs (First National Bank of Chicago
LOC) VMIG1 1,000,000
-------------------------------------------------------------
1,900,000 Maryland Health & Higher Educational Facilities Authority,
ACES Revenue Bonds (Series 1994) Weekly VRDNs (Daughters of
Charity GTD) VMIG1 1,900,000
-------------------------------------------------------------
15,300,000 Maryland Health & Higher Educational Facilities Authority,
Revenue Bonds (Series 1985A) Weekly VRDNs (First National
Bank of Chicago LOC) VMIG1 15,300,000
-------------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
MARYLAND--CONTINUED
-------------------------------------------------------------
$ 8,930,000 Maryland State Community Development Administration, (Series
1987-2), 3.90% TOBs (First National Bank of Chicago LIQ),
Optional Tender 4/1/1996 NR(2) $ 8,930,000
-------------------------------------------------------------
2,525,000 Montgomery County, MD EDA Weekly VRDNs (Howard Hughes Medical
Center) A-1+ 2,525,000
-------------------------------------------------------------
10,700,000 Montgomery County, MD EDA Weekly VRDNs (U.S. Pharmacopeial
Convention Facility)/(Chemical Bank, New York LOC) VMIG1 10,700,000
-------------------------------------------------------------
7,500,000 Montgomery County, MD, Consolidated CP BANs (Series 1995),
3.25% CP, Mandatory Tender
3/12/1996 Aaa 7,500,000
-------------------------------------------------------------
1,000,000 University of Maryland, Revolving Equipment Loan Program
(Series A) Weekly VRDNs (Student Loan Marketing Association
LIQ) A-1+ 1,000,000
------------------------------------------------------------- ----------------
Total 55,055,000
------------------------------------------------------------- ----------------
MASSACHUSETTS--2.5%
-------------------------------------------------------------
15,000,000 Commonwealth of Massachusetts, (Series A), 3.35% CP (Union
Bank of Switzerland, Zurich LIQ), Mandatory Tender 2/12/1996 A-1+ 15,000,000
-------------------------------------------------------------
30,655,000 Massachusetts State HFA, Multi-Family Refunding Revenue Bonds
(1995 Series A) Weekly VRDNs (Republic National Bank of New
York LIQ) A-1+ 30,655,000
------------------------------------------------------------- ----------------
Total 45,655,000
------------------------------------------------------------- ----------------
MICHIGAN--2.9%
-------------------------------------------------------------
3,850,000 Dearborn, MI Economic Development Corp, (Series 1991) Weekly
VRDNs (Oakbrook Common Project)/ (Mellon Bank NA, Pittsburgh
LOC) A-1 3,850,000
-------------------------------------------------------------
2,000,000 Kalamazoo, MI Economic Development Corp., 1995 Limited
Obligation Revenue Refunding Bonds Weekly VRDNs (Wyndham
Project, MI)/(First of America Bank-Illinois LOC) A-1 2,000,000
-------------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
MICHIGAN--CONTINUED
-------------------------------------------------------------
$ 2,000,000 Michigan Municipal Bond Authority, 4.50% RANs, 7/3/1996 SP-1+ $ 2,005,635
-------------------------------------------------------------
2,700,000 Michigan State Hospital Finance Authority, (Series A) Weekly
VRDNs (OSF Health Care Systems) VMIG1 2,700,000
-------------------------------------------------------------
4,600,000 Michigan State Housing Development Authority, Rental Housing
Revenue Bonds (1994 Series C) Weekly VRDNs (Credit Suisse,
Zurich LOC) A-1+ 4,600,000
-------------------------------------------------------------
9,500,000 Michigan Strategic Fund, Ltd Obligations PCRs (Series 1993)
Weekly VRDNs (Allied-Signal, Inc.) A-1 9,500,000
-------------------------------------------------------------
25,700,000 Michigan Underground Storage Tank Financial Assurance
Authority, (Series I--1995) Weekly VRDNs (Canadian Imperial
Bank of Commerce, Toronto LOC) VMIG1 25,700,000
-------------------------------------------------------------
2,195,000 Ottawa County, MI Economic Development Corp., Limited
Obligation Revenue Bonds (Series 1995B) Weekly VRDNs (Sunset
Manor, Inc. Project)/(Old Kent Bank & Trust Co., Grand Rapids
LOC) A-1 2,195,000
------------------------------------------------------------- ----------------
Total 52,550,635
------------------------------------------------------------- ----------------
MINNESOTA--1.3%
-------------------------------------------------------------
9,000,000 Becker, MN, PCR (Series 1992A), 4.00% CP (Northern States
Power Co.), Mandatory Tender 2/6/1996 A-1+ 9,000,000
-------------------------------------------------------------
6,000,000 Becker, MN, PCR (Series 1993A & B), 4.00% CP (Northern States
Power Co.), Mandatory Tender
2/6/1996 A-1+ 6,000,000
-------------------------------------------------------------
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 NA, Minneapolis LOC) A-1 2,065,000
-------------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
MINNESOTA--CONTINUED
-------------------------------------------------------------
$ 3,440,000 Minneapolis CDA, Revenue Refunding Bonds (Series 1995) Weekly
VRDNs (Walker Methodist Health Center, Inc. Project)/(First
Bank NA,
Minneapolis LOC) A-1 $ 3,440,000
-------------------------------------------------------------
2,000,000 Minneapolis, MN, (Series 1993) Weekly VRDNs (Market Square
Real Estate, Inc.)/(Norwest Bank Minnesota, Minneapolis LOC) A-1+ 2,000,000
-------------------------------------------------------------
800,000 St. Paul, MN Port Authority, (Series 1991) Weekly VRDNs (West
Gate Office)/(First Bank NA,
Minneapolis LOC) A-1 800,000
------------------------------------------------------------- ----------------
Total 23,305,000
------------------------------------------------------------- ----------------
MISSISSIPPI--0.1%
-------------------------------------------------------------
1,730,000 Hinds County, MS, (Series 1991) Weekly VRDNs (North State St.
Project)/(Amsouth Bank N.A.,
Birmingham LOC) VMIG1 1,730,000
------------------------------------------------------------- ----------------
MISSOURI--0.5%
-------------------------------------------------------------
5,400,000 Missouri State HEFA, Health Facilities Revenue Bonds (Series
1989 B) Weekly VRDNs (Sisters of Mercy Health System)/(ABN
AMRO Bank N.V., Amsterdam LIQ) VMIG1 5,400,000
-------------------------------------------------------------
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
------------------------------------------------------------- ----------------
Total 9,600,000
------------------------------------------------------------- ----------------
NEW JERSEY--4.0%
-------------------------------------------------------------
28,500,000 Essex County, NJ, TANs of 1996 (Series A), 4.00% TANs
(Chemical Bank, New York LOC), 8/19/1996 MIG1 28,602,490
-------------------------------------------------------------
45,000,000 New Jersey State, Tax and Revenue Anticipation Notes (Series
Fiscal 1996C), 3.60% CP, Mandatory Tender 3/7/1996 A-1+ 45,000,000
------------------------------------------------------------- ----------------
Total 73,602,490
------------------------------------------------------------- ----------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
NEW YORK--7.8%
-------------------------------------------------------------
$ 7,000,000 Nassau County, NY, (Series 1995A), 4.50% TANs,
3/15/1996 SP-1+ $ 7,004,858
-------------------------------------------------------------
27,500,000 New York City Municipal Water Finance Authority, (Series 4),
3.40% CP (Credit Suisse, Zurich LOC), Mandatory Tender
2/7/1996 A-1+ 27,500,000
-------------------------------------------------------------
25,000,000 New York City, NY, (Fiscal 1996 Series A), 4.50% RANs,
4/11/1996 SP-1+ 25,037,283
-------------------------------------------------------------
26,735,000 New York City, NY, (Series B), 4.75% RANs (Bank of Nova
Scotia, Toronto, Canadian Imperial Bank of Commerce, Toronto,
Chemical Bank, New York, Citibank NA, New York, Commerzbank
AG, Frankfurt, Morgan Guaranty Trust Co., New York and Union
Bank of Switzerland, Zurich LOCs),
6/28/1996 MIG1 26,870,445
-------------------------------------------------------------
5,800,000 New York City, NY, GO Bonds (Series 1994A) Daily VRDNs
(Chemical Bank, New York LOC) A-1 5,800,000
-------------------------------------------------------------
5,000,000 New York City, NY, GO Tax Exempt Adjustable Rate Series B
Bonds, Subseries B10 Weekly VRDNs (Union Bank of Switzerland,
Zurich LOC) VMIG1 5,000,000
-------------------------------------------------------------
8,100,000 New York State Energy Research & Development Authority, PCR,
(1994 Series D) Daily VRDNs (Union Bank of Switzerland,
Zurich LOC) VMIG1 8,100,000
-------------------------------------------------------------
13,300,000 New York State Local Government Assistance Corp., (Series D)
Weekly VRDNs (Societe Generale, Paris LOC) A-1+ 13,300,000
-------------------------------------------------------------
24,300,000 New York State Local Government Assistance Corp., Variable
Rate Bonds (Series 1995F) Weekly VRDNs (Toronto-Dominion Bank
LOC) VMIG1 24,300,000
------------------------------------------------------------- ----------------
Total 142,912,586
------------------------------------------------------------- ----------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
NORTH CAROLINA--3.8%
-------------------------------------------------------------
$ 24,213,600 Charlotte-Mecklenburg Hospital Authority, NC, Loan
Participation Certificates (1995) VRNs,
5/22/1996 NR(2) $ 24,213,600
-------------------------------------------------------------
2,330,000 Fayetteville, NC Public Works Commission, Revenue Refunding
Bonds Weekly VRDNs (FGIC INS)/ (Merrill Lynch Capital
Services, Inc. LIQ) VMIG1 2,330,000
-------------------------------------------------------------
4,000,000 Greensboro, NC, Certificates of Participation 1994 Equipment
Project Weekly VRDNs (Greensboro, NC Center City
Corp.)/(Wachovia Bank of Georgia NA, Atlanta LIQ) A-1+ 4,000,000
-------------------------------------------------------------
15,000,000 Martin County, NC IFA, (Series 1993) Weekly VRDNs
(Weyerhauser Co.) A-1 15,000,000
-------------------------------------------------------------
645,000 NCNB Pooled Tax-Exempt Trust, (Series 1990A) Weekly VRDNs
(NCNB Tax Exempt Trust 1990a)/ (Nationsbank, N.A. (Carolinas)
LOC) P-1 645,000
-------------------------------------------------------------
19,800,000 North Carolina Municipal Power Agency No. 1, (Series A),
3.35% CP (Morgan Guaranty Trust Co., New York and Union Bank
of Switzerland, Zurich LOCs), Mandatory Tender 3/19/1996 P-1 19,800,000
-------------------------------------------------------------
3,000,000 Winston-Salem, NC, GO Bonds (Series 1990) Weekly VRDNs
(Credit Suisse, Zurich LIQ) A-1+ 3,000,000
------------------------------------------------------------- ----------------
Total 68,988,600
------------------------------------------------------------- ----------------
NO STATE--0.7%
-------------------------------------------------------------
11,000,652 LaSalle National Bank Leasetops Trust, Series 1995A Leasetops
Certificates Weekly VRDNs (Lasalle National Bank, Chicago
LOC) A-1+ 11,000,652
-------------------------------------------------------------
2,200,000 Merrill Lynch Puttable FLOATs/RITES Trust, (Series PP2)
Weekly VRDNs (Merrill Lynch Capital Services LIQ) VMIG1 2,200,000
------------------------------------------------------------- ----------------
Total 13,200,652
------------------------------------------------------------- ----------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
OHIO--3.4%
-------------------------------------------------------------
$ 2,585,000 Ashland County, OH Health Care Weekly VRDNs (Brethren Care,
Inc.)/(National City Bank, Cleveland, OH LOC) P-1 $ 2,585,000
-------------------------------------------------------------
8,000,000 Cleveland, OH City School District, Energy Conservation
Improvement Bonds (Series 1994) Weekly VRDNs (Internationale
Nederlanden Bank N.V. LIQ)/(Internationale Nederlanden Bank
N.V. LOC) A-1+ 8,000,000
-------------------------------------------------------------
1,100,000 Cuyahoga County, OH Hospital Authority Weekly VRDNs (St.
Lukes Hospital)/(First National Bank of Chicago LOC) VMIG1 1,100,000
-------------------------------------------------------------
2,550,000 Cuyahoga County, OH IDA Weekly VRDNs (H.P. Parking
Co.)/(Society National Bank, Cleveland, OH LOC) P-1 2,550,000
-------------------------------------------------------------
2,000,000 Dayton, OH, Revenue Refunding Bonds (Series 1993E) Weekly
VRDNs (Emery Air Freight Corp.)/ (Mellon Bank NA, Pittsburgh
LOC) VMIG1 2,000,000
-------------------------------------------------------------
9,100,000 Franklin County, OH Hospital Facility Authority Weekly VRDNs
(Riverside United Methodist Hospital)/(National City Bank,
Cleveland, OH LOC) VMIG1 9,100,000
-------------------------------------------------------------
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
-------------------------------------------------------------
4,200,000 Lucas County, OH, Hospital Refunding Revenue Bonds Weekly
VRDNs (Riverside Hospital, OH)/ (Huntington National Bank,
Columbus, OH LOC) P-1 4,200,000
-------------------------------------------------------------
1,645,000 Marion County, OH Hospital Authority, (Series 1991) Weekly
VRDNs (Marion County, OH Pooled Hospital Program)/(Bank One,
Columbus, N.A. LOC) A-1+ 1,645,000
-------------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
OHIO--CONTINUED
-------------------------------------------------------------
$ 4,000,000 Mayfield Village, OH IDA Weekly VRDNs (Beta Campus
Co.)/(First Union National Bank, Charlotte, N.C. LOC) P-1 $ 4,000,000
-------------------------------------------------------------
10,000,000 Montgomery County, OH Health Facilities Authority, (Series
1995) Weekly VRDNs (Sisters of Charity Health Care
System)/(Toronto-Dominion Bank LIQ) P-1 10,000,000
-------------------------------------------------------------
750,000 Montgomery County, OH IDA Weekly VRDNs (Center-Plex
Venture)/(Society National Bank, Cleveland, OH LOC) P-1 750,000
-------------------------------------------------------------
1,700,000 Montgomery, OH IDA Weekly VRDNs (Bethesda Two Limited
Partnership)/(Huntington National Bank, Columbus, OH LOC) A-1 1,700,000
-------------------------------------------------------------
4,500,000 Muskingum County, OH, Hospital Facilities Revenue Bonds
Weekly VRDNs (Bethesda Care System)/(National City Bank,
Columbus, OH LOC) VMIG1 4,500,000
-------------------------------------------------------------
3,800,000 Ohio State Air Quality Development Authority, (Series 1998A)
Weekly VRDNs (PPG Industries, Inc.) P-1 3,800,000
-------------------------------------------------------------
1,800,000 Seneca County, OH Hospital Facility Authority Weekly VRDNs
(St. Francis Home)/(National City Bank, Cleveland, OH LOC) VMIG1 1,800,000
-------------------------------------------------------------
800,000 Solon, OH, IDA Weekly VRDNs (Solon Industries)/ (Society
National Bank, Cleveland, OH LOC) P-1 800,000
-------------------------------------------------------------
1,050,000 Twinsburg, OH IDA Weekly VRDNs (Carl J Massara
Project)/(Society National Bank, Cleveland, OH LOC) P-1 1,050,000
------------------------------------------------------------- ----------------
Total 61,875,000
------------------------------------------------------------- ----------------
OKLAHOMA--2.5%
-------------------------------------------------------------
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) P-1 10,000,000
-------------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
OKLAHOMA--CONTINUED
-------------------------------------------------------------
$ 36,000,000 Oklahoma State Industrial Authority, Health System Revenue
Bonds (Series 1995A), 3.30% CP (Baptist Medical Center, OK),
Mandatory Tender
2/1/1996 A-1+ $ 36,000,000
------------------------------------------------------------- ----------------
Total 46,000,000
------------------------------------------------------------- ----------------
OREGON--0.1%
-------------------------------------------------------------
2,000,000 Oregon Health, Housing & Cultural Facilities Authority,
Adjustable Rate Revenue Bonds (1995 Series A) Weekly VRDNs
(Guide Dogs for the Blind, Inc. Project)/(Banque Nationale de
Paris LOC) VMIG1 2,000,000
------------------------------------------------------------- ----------------
PENNSYLVANIA--4.8%
-------------------------------------------------------------
6,500,000 Allegheny County, PA HDA, Var Rate Hosp Revenue Bonds (Series
B 1995) Weekly VRDNs (Allegheny General Hospital)/(Morgan
Guaranty Trust Co., New York LOC) VMIG1 6,500,000
-------------------------------------------------------------
5,000,000 Allegheny County, PA IDA, PCR (Series 1992A), 3.75% TOBs
(Duquesne Light Power Co.)/(Canadian Imperial Bank of
Commerce, Toronto LOC), Optional Tender 11/7/1996 P-1 5,000,000
-------------------------------------------------------------
9,075,000 Commonwealth of Pennsylvania, GO Bonds (Second Series of
1995), 5.00% BANs, 11/15/1996 NR(2) 9,169,927
-------------------------------------------------------------
4,500,000 Dauphin County, PA, General Authority Hospital Revenue Bonds
Weekly VRDNs (Jamison Memorial Hospital)/(PNC Bank, N.A. LOC) A-1 4,500,000
-------------------------------------------------------------
3,700,000 Delaware County, PA Weekly VRDNs (American College)/(PNC
Bank, N.A. LOC) P-1 3,700,000
-------------------------------------------------------------
31,500,000 Erie County, PA Hospital Authority Weekly VRDNs (St. Vincent
Health System)/(Mellon Bank NA, Pittsburgh LOC) A-1 31,500,000
-------------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
-------------------------------------------------------------
$ 3,710,000 Lehigh County, PA General Purpose Authority, Revenue Bonds
(Series 1990) Weekly VRDNs (Phoebe Terrace, Inc.)/(Meridian
Bank, Reading, PA LOC) P-1 $ 3,710,000
-------------------------------------------------------------
5,000,000 North Lebanon Township, PA, Municipal Authority Mortgage
Weekly Weekly VRDNs (Grace Community, Inc.)/(Meridian Bank,
Reading, PA LOC) VMIG1 5,000,000
-------------------------------------------------------------
8,800,000 Philadelphia Redevelopment Authority, Multi-Family Revenue
Bonds (Series 1985) Weekly VRDNs (Franklin Town
Towers)/(Marine Midland Bank N.A., Buffalo, NY LOC) P-2 8,800,000
-------------------------------------------------------------
5,000,000 Philadelphia, PA IDA, (Series 93) Weekly VRDNs (Sackett
Development)/(Mellon Bank NA, Pittsburgh LOC) VMIG1 5,000,000
-------------------------------------------------------------
3,000,000 Philadelphia, PA, GO (Series 1990), 3.85% CP (Fuji Bank,
Ltd., Tokyo LOC), Mandatory Tender
2/21/1996 VMIG1 3,000,000
-------------------------------------------------------------
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
-------------------------------------------------------------
2,000,000 Washington County, PA Hospital Authority Weekly VRDNs
(Keystone Diversified Management Corp.)/ (Mellon Bank NA,
Pittsburgh LOC) A-1 2,000,000
------------------------------------------------------------- ----------------
Total 88,379,927
------------------------------------------------------------- ----------------
PUERTO RICO--0.1%
-------------------------------------------------------------
1,000,000 Puerto Rico Government Development Bank Weekly VRDNs (Credit
Suisse, Zurich LOC) A-1+ 1,000,000
------------------------------------------------------------- ----------------
RHODE ISLAND--0.3%
-------------------------------------------------------------
4,600,000 Cranston, RI, BANS (Series 1995), 4.00%, (State Street Bank
and Trust Co. LOC), 6/17/1996 P-1 4,603,371
------------------------------------------------------------- ----------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
SOUTH CAROLINA--0.3%
-------------------------------------------------------------
$ 5,000,000 University of South Carolina, Athletic Facilities (Series
1995), 5.25% BANs, 3/1/1996 NR(3) $ 5,004,324
------------------------------------------------------------- ----------------
TENNESSEE--3.2%
-------------------------------------------------------------
10,000,000 Chattanooga, TN HEFA Weekly VRDNs (Mccallie School)/(Trust
Company Bank, Atlanta LOC) A-1+ 10,000,000
-------------------------------------------------------------
14,000,000 Chattanooga, TN HEFA Weekly VRDNs (Sisken Hospital)/(Sumitomo
Bank Ltd., Osaka LOC) P-1 14,000,000
-------------------------------------------------------------
8,400,000 Chattanooga, TN HEFA Weekly VRDNs (Sisken Hospital)/(Sumitomo
Bank Ltd., Osaka LOC) P-1 8,400,000
-------------------------------------------------------------
8,500,000 Chattanooga-Hamilton County, TN Hospital Authority Daily
VRDNs (Erlanger Medical Center)/ (Morgan Guaranty Trust Co.,
New York LOC) A-1 8,500,000
-------------------------------------------------------------
3,440,000 Knox County, TN Health Education & Housing Facilities Board,
Variable Rate Hospital Facilities Revenue Demand Bonds
(Series 1985 B) Weekly VRDNs (MBIA Insured)/(Morgan Guaranty
Trust Co., New York LIQ) VMIG1 3,440,000
-------------------------------------------------------------
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) P-1 6,200,000
------------------------------------------------------------- ----------------
Total 57,870,000
------------------------------------------------------------- ----------------
TEXAS--5.4%
-------------------------------------------------------------
4,325,000 Dallas, TX, (Series C), 3.90% TOBs, Optional Tender 6/17/1996 VMIG1 4,325,000
-------------------------------------------------------------
11,050,000 Harris County, TX HFDC, (Series B), 3.65% TOBs (San Jacinto
Methodist Hospital)/(Morgan Guaranty Trust Co., New York
LOC), Optional Tender
3/1/1996 A-1+ 11,050,000
-------------------------------------------------------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
TEXAS--CONTINUED
-------------------------------------------------------------
$ 1,900,000 Houston, TX, (Series 1993A) Weekly VRDNs
(Morgan Guaranty Trust Co., New York LIQ) A-1+ $ 1,900,000
-------------------------------------------------------------
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
-------------------------------------------------------------
1,820,000 North Richland Hills, TX IDC Weekly VRDNs (Tecnol,
Inc.)/(Nationsbank, N.A. (Carolinas) LOC) P-1 1,820,000
-------------------------------------------------------------
10,600,000 San Antonio, TX, Electric & Gas Systems Commercial Paper
Notes, (Series A), 3.45% CP (Bank of Tokyo Ltd., Tokyo,
Credit Suisse, Zurich, Mitsubishi Bank Ltd, Tokyo, Sanwa Bank
Ltd, Osaka, Sumitomo Bank Ltd., Osaka, Texas Commerce Bank,
NA, Houston, Toronto-Dominion Bank and Union Bank of
Switzerland, Zurich LIQs), Mandatory Tender 2/7/1996 A-1 10,600,000
-------------------------------------------------------------
25,200,000 Texas State Public Finance Authority, (Series 1993A), 3.30%
CP, Mandatory Tender 3/5/1996 A-1+ 25,200,000
-------------------------------------------------------------
30,600,000 Texas State, (Series 1995A), 4.75% TRANs, 8/30/1996 SP-1+ 30,731,238
-------------------------------------------------------------
10,000,000 Texas State, (Series 1995B), 3.65% CP, Mandatory Tender
8/20/1996 A-1+ 10,000,000
------------------------------------------------------------- ----------------
Total 97,626,238
------------------------------------------------------------- ----------------
VIRGINIA--1.5%
-------------------------------------------------------------
7,000,000 Fairfax County, VA Housing Authority Weekly VRDNs (Chase
Commons Associates)/(Bankers Trust Co., New York LOC) P-1 7,000,000
-------------------------------------------------------------
19,600,000 Roanoke, VA IDA, (Series A) Weekly VRDNs (Carilion Health
System)/(Nationsbank of Virginia, N.A. LIQ) A-1 19,600,000
------------------------------------------------------------- ----------------
Total 26,600,000
------------------------------------------------------------- ----------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<S> <S> <C> <C>
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
WASHINGTON--0.1%
-------------------------------------------------------------
$ 1,900,000 Port of Seattle, WA, IDRBs (Series 1985) Weekly VRDNs
(Douglas Management Company Project)/ (Mellon Bank NA,
Pittsburgh LOC) P-1 $ 1,900,000
------------------------------------------------------------- ----------------
WEST VIRGINIA--0.4%
-------------------------------------------------------------
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
-------------------------------------------------------------
40,000,000 Wisconsin HEFA Weekly VRDNs (St. Luke's Medical
Center)/(Sumitomo Bank Ltd., Osaka LOC) VMIG1 40,000,000
------------------------------------------------------------- ----------------
Total 41,100,000
------------------------------------------------------------- ----------------
WYOMING--0.2%
-------------------------------------------------------------
1,900,000 Lincoln County, WY, PCR Refunding Bonds (Series 1994) Daily
VRDNs (Pacificorp)/(AMBAC INS)/ (Bank of New York, New York
LIQ) A-1 1,900,000
-------------------------------------------------------------
1,125,000 Natrona County, WY, Hospital Revenue, 5.6875% TOBs (W.W.
Grainger, Inc.), Optional Tender
6/1/1996 P-1 1,125,000
------------------------------------------------------------- ----------------
Total 3,025,000
------------------------------------------------------------- ----------------
TOTAL INVESTMENTS, AT AMORTIZED COST(A) $ 1,856,695,624
------------------------------------------------------------- ----------------
</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
($1,815,380,798) at January 31, 1996.
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
The following acronym(s) are used throughout this portfolio:
<TABLE>
<S> <C>
ACES-- Adjustable Convertible Extendable
Securities
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
GTD-- Guaranty
HDA-- Hospital Development Authority
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 Bond
IFA-- Industrial Finance Authority
INS-- Insured
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
TAN-- Tax Anticipation Note
TANs-- Tax Anticipation Notes
TOBs-- Tender Option Bonds
TRANs-- Tax and Revenue Anticipation Notes
USD-- University School District
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
JANUARY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -----------------------------------------------------------------------------------------------
Total investments in securities, at amortized cost and value $ 1,856,695,624
- -----------------------------------------------------------------------------------------------
Income receivable 12,251,194
- ----------------------------------------------------------------------------------------------- ----------------
Total assets 1,868,946,818
- -----------------------------------------------------------------------------------------------
LIABILITIES:
- -----------------------------------------------------------------------------------------------
Payable for investments purchased $ 43,703,327
- --------------------------------------------------------------------------------
Income distribution payable 5,304,859
- --------------------------------------------------------------------------------
Payable to Bank 4,348,597
- --------------------------------------------------------------------------------
Accrued expenses 209,237
- -------------------------------------------------------------------------------- -------------
Total liabilities 53,566,020
- ----------------------------------------------------------------------------------------------- ----------------
NET ASSETS for 1,815,317,429 shares outstanding $ 1,815,380,798
- ----------------------------------------------------------------------------------------------- ----------------
NET ASSETS CONSIST OF:
- -----------------------------------------------------------------------------------------------
Paid in capital $ 1,815,317,429
- -----------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 63,369
- ----------------------------------------------------------------------------------------------- ----------------
Total Net Assets $ 1,815,380,798
- ----------------------------------------------------------------------------------------------- ----------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -----------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES:
$1,407,668,949 / 1,407,618,442 shares outstanding $1.00
- ----------------------------------------------------------------------------------------------- ----------------
INSTITUTIONAL SERVICE SHARES:
$407,711,849 / 407,698,987 shares outstanding $1.00
- ----------------------------------------------------------------------------------------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TAX-FREE OBLIGATIONS FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest $ 33,831,433
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------------
Investment advisory fee $ 1,748,161
- ------------------------------------------------------------------------------------
Administrative personnel and services fee 661,370
- ------------------------------------------------------------------------------------
Custodian fees 75,353
- ------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 36,646
- ------------------------------------------------------------------------------------
Directors'/Trustees' fees 2,742
- ------------------------------------------------------------------------------------
Auditing fees 6,606
- ------------------------------------------------------------------------------------
Legal fees 9,394
- ------------------------------------------------------------------------------------
Portfolio accounting fees 62,402
- ------------------------------------------------------------------------------------
Shareholder services fee--Institutional Shares 1,773,802
- ------------------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 411,399
- ------------------------------------------------------------------------------------
Share registration costs 131,684
- ------------------------------------------------------------------------------------
Printing and postage 15,672
- ------------------------------------------------------------------------------------
Insurance premiums 7,734
- ------------------------------------------------------------------------------------
Miscellaneous 4,758
- ------------------------------------------------------------------------------------ -------------
Total expenses 4,947,723
- ------------------------------------------------------------------------------------
Waivers--
- ---------------------------------------------------------------------
Waiver of investment advisory fee $ (975,902)
- ---------------------------------------------------------------------
Waiver of shareholder services fee--Institutional Shares (1,773,802)
- --------------------------------------------------------------------- -------------
Total waivers (2,749,704)
- ------------------------------------------------------------------------------------ -------------
Net expenses 2,198,019
- --------------------------------------------------------------------------------------------------- -------------
Net investment income 31,633,414
- --------------------------------------------------------------------------------------------------- -------------
Net realized gain on investments 84,604
- --------------------------------------------------------------------------------------------------- -------------
Change in net assets resulting from operations $ 31,718,018
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TAX-FREE OBLIGATIONS FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
JANUARY 31, 1996 JULY 31, 1995
<S> <C> <C>
- ---------------------------------------------------------------------------- ----------------- -----------------
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------------------
Net investment income $ 31,633,414 $ 41,769,131
- ----------------------------------------------------------------------------
Net realized gain (loss) on investments ($0 net gain and $40 net gain,
respectively, as computed for federal income tax purposes) 84,604 (1,395)
- ---------------------------------------------------------------------------- ----------------- -----------------
Change in net assets resulting from operations 31,718,018 41,767,736
- ---------------------------------------------------------------------------- ----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------------------------------
Distributions from net investment income
- ----------------------------------------------------------------------------
Institutional Shares (25,968,903) (36,508,581)
- ----------------------------------------------------------------------------
Institutional Service Shares (5,664,511) (5,260,550)
- ---------------------------------------------------------------------------- ----------------- -----------------
Change in net assets resulting from distributions to shareholders (31,633,414) (41,769,131)
- ---------------------------------------------------------------------------- ----------------- -----------------
SHARE TRANSACTIONS--
- ----------------------------------------------------------------------------
Proceeds from sale of shares 6,356,918,469 7,385,500,551
- ----------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of distributions
declared 1,867,573 2,286,899
- ----------------------------------------------------------------------------
Cost of shares redeemed (6,090,963,344) (6,655,215,610)
- ---------------------------------------------------------------------------- ----------------- -----------------
Change in net assets resulting from share transactions 267,822,698 732,571,840
- ---------------------------------------------------------------------------- ----------------- -----------------
Change in net assets 267,907,302 732,570,445
- ----------------------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------------------
Beginning of period 1,547,473,496 814,903,051
- ---------------------------------------------------------------------------- ----------------- -----------------
End of period $ 1,815,380,798 $ 1,547,473,496
- ---------------------------------------------------------------------------- ----------------- -----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TAX-FREE OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
<S> <C> <C> <C> <C > <C> <C> <C>
1996 1995 1994 1993 1992 1991 1990(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------
Net investment income 0.02 0.04 0.02 0.03 0.04 0.05 0.04
- ------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------
Distributions from net investment income (0.02) (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 $ 1.00
- ------------------------------------------ ------ --------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 1.87% 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% 0.20%*
- ------------------------------------------
Net investment income 3.65%* 3.62% 2.41% 2.49% 3.58% 4.93% 5.75%*
- ------------------------------------------
Expense waiver/reimbursement (c) 0.36%* 0.39% 0.15% 0.14% 0.17% 0.26% 0.21%*
- ------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------
NET ASSETS, END OF PERIOD (000 OMITTED)
$1,407,669 $1,295,458 $789,755 $454,119 $308,855 $165,669 $145,552
- ------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
TAX-FREE OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
<S> <C> <C> <C>
1996 1995 1994(A)
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00
- ------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------------------
Net investment income 0.02 0.03 0.002
- ------------------------------------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------------------------------------
Distributions from net investment income (0.02) (0.03) (0.002)
- ------------------------------------------------------------------------ ------------- --------- ----------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
- ------------------------------------------------------------------------ ------------- --------- ----------
TOTAL RETURN (B) 1.74% 3.39% 0.18%
- ------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------------------------
Expenses 0.45%* 0.45% 0.39%*
- ------------------------------------------------------------------------
Net investment income 3.43%* 3.48% 3.04%*
- ------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.11%* 0.14% 0.15%*
- ------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000 OMITTED) $407,712 $252,016 $25,148
- ------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
TAX-FREE OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996
(UNAUDITED)
- --------------------------------------------------------------------------------
(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 portfolios. The financial
statements included herein are only those of Tax-Free Obligations Fund (the
"Fund"), a diversified portfolio. The financial statements of the other
portfolios are presented separately. The assets of each portfolio are segregated
and a shareholder's interest is limited to the portfolio in which shares are
held.
The Fund offers two classes of shares: Institutional Shares and Institutional
Service Shares.
(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 uses the amortized cost method to value its
portfolio securities in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
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>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
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.
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 January 31, 1996, capital paid-in aggregated $1,815,317,429.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31, JULY 31,
1996 1995
<S> <C> <C>
INSTITUTIONAL SHARES SHARES SHARES
<CAPTION>
- ------------------------------------------------------------------------------ ---------------- ----------------
<S> <C> <C>
Shares sold 5,438,380,727 6,466,015,512
- ------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 1,115,658 1,609,289
- ------------------------------------------------------------------------------
Shares redeemed (5,327,356,878) (5,961,920,320)
- ------------------------------------------------------------------------------ ---------------- ----------------
Net change resulting from Institutional Share transactions 112,139,507 505,704,481
- ------------------------------------------------------------------------------ ---------------- ----------------
</TABLE>
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31, JULY 31,
1996 1995
INSTITUTIONAL SERVICE SHARES SHARES SHARES
- ------------------------------------------------------------------------------ ---------------- ----------------
<S> <C> <C>
Shares sold 918,537,742 919,485,039
Shares issued to shareholders in payment of distributions declared 751,915 677,610
Shares redeemed (763,606,466) (693,295,290)
- ------------------------------------------------------------------------------ ---------------- ----------------
Net change resulting from Institutional Service Share
transactions 155,683,191 226,867,359
- ------------------------------------------------------------------------------ ---------------- ----------------
Net change resulting from Share
transactions 267,822,698 732,571,840
- ------------------------------------------------------------------------------ ---------------- ----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to 0.20% of the Fund's average daily net assets.The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of Federated
Investors for the period. The administrative fee received during the period of
the Administrative Services Agreement shall be at least $125,000 per portfolio
and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25%
of average daily net assets of the Fund for the period. The fee paid to FSS is
used to finance certain services for shareholders and to maintain shareholder
accounts. FSS may voluntarily choose to waive any portion of its fee. FSS can
modify or terminate this voluntary waiver at any time at its sole discretion.
For the period ended January 31, 1996, Institutional Shares fully waived its
shareholder services fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
registered transfer and dividend disbursing agent, Federated Shareholder
Services Company, maintains all necessary shareholder records and receives a fee
based on the size, type, and number of accounts and transactions made by
shareholders.
TAX-FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
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.
INTERFUND TRANSACTIONS--During the period ended January 31, 1996, the Trust
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common Officers. These purchase and sale transactions
were made at current market value pursuant to Rule 17a-7 under the Act amounting
to $2,129,421,008 and $2,028,444,240 respectively.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. J. Christopher Donahue
William J. Copeland President
J. Christopher Donahue Edward C. Gonzales
James E. Dowd Executive Vice President
Lawrence D. Ellis, M.D. John W. McGonigle
Edward L. Flaherty, Jr. Executive Vice President and Secretary
Peter E. Madden Richard B. Fisher
Gregor F. Meyer Vice President
John E. Murray, Jr. David M. Taylor
Wesley W. Posvar Treasurer
Marjorie P. Smuts J. Crilley Kelly
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or
any other government agency. Investment in mutual funds involves
investment risk, including possible loss of principal. Although money market
funds seek to maintain a stable net asset value of $1.00 per share, there is no
assurance that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
TAX-FREE
OBLIGATIONS
FUND
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JANUARY 31, 1996
FEDERATED SECURITIES CORP.
- --------------------------
Distributor
A Subsidiary of Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip 60934N401
Cusip 60934N880
0022807 (3/96)
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Treasury
Obligations Fund, which covers the six-month period ended January 31, 1996.
The report begins with an investment review on the short-term Treasury market
from the fund's portfolio manager. Following the investment review, you will
find the fund's portfolio of investments and its financial statements.
In Treasury Obligations Fund, your ready cash is at work pursuing daily
income-along with the additional advantages of daily liquidity and stability
of principal*-by investing exclusively in short-term U.S. Treasury
obligations and in repurchase agreements collateralized by these obligations.
During the six-month reporting period, dividends paid to shareholders totaled
$0.03 per share. At the end of the reporting period, net assets of the fund
stood at $5.6 billion.
Thank you for your confidence in the daily earning power of Treasury
Obligations Fund. As always, your questions and comments are welcome.
Sincerely,
J. Christopher Donahue
President
March 15, 1996
* Although money market mutual funds seek to maintain a stable net asset
value of $1.00 per share, there is no assurance that they will be able to do
so. Investments in mutual funds are neither insured nor guaranteed by the
U.S. government.
INVESTMENT REVIEW
Treasury Obligations Fund, which is rated AAAm by Standard & Poor's Ratings
Group and Aaa by Moody's Investors Service, Inc.,* is invested in direct
obligations of the U.S. Treasury either in the form of notes and bills or as
collateral for repurchase agreements. Recently, the fund has been managed
within a 40-50 day average maturity range.
The semi-annual reporting period brought continued signs of moderation in the
economy, as softening in the manufacturing, housing, and consumer sectors
restrained growth. Gross Domestic Product came in below the 2-21/2% pace
generally considered to be the potential, noninflationary rate of growth for
the economy. The monthly National Association of Purchasing Manager's Index**
registered readings of below 50 since July 1995, levels thought to be
indicative of a contracting economy. Inflation remained quite friendly, with
prices at the consumer level rising less than 3%. Against this backdrop, the
Federal Reserve Board (the "Fed") eased monetary policy in late December 1995
and again in January 1996, each time by 25 basis points to lower the Federal
Funds target rate from 5.75% to 5.25% by the end of the reporting period. In
July of 1995, the Fed had reversed its course in monetary policy by lowering
the Federal Funds target rate from 6% to 5.75%, after seven consecutive
tightenings throughout 1994 and early 1995.
The combination of a sluggish economy and benign inflation drove short-term
interest rates downward over the reporting period, as the market anticipated
the easings by the Fed in an attempt to move monetary policy closer to a
neutral stance. The yield on the three-month Treasury bill fell by more than
50 basis points over the reporting period, from 5.57% to close to 5.00%.
Yields on the six-month and one-year Treasury bills declined even more, by 63
and 75 basis points, respectively. The front end of the yield curve ended the
period inverted, with the one-year Treasury bill trading roughly 15 basis
points below the three-month Treasury bill at the end of January 1996. Aside
from the underlying fundamental factors, movements in market rates were also
influenced by the budget negotiations in Washington and the disruption to the
Treasury auction schedule in October and November 1995.
Throughout the reporting period, the fund was targeted in a 40-50 day average
maturity target range, a modestly bullish stance, as we expected to see
additional easings from the Fed. However, with short-term interest rates
often anticipating a more aggressive forecast regarding future easing in
monetary policy than was consistent with our own outlook, we felt that a
yield advantage continued to exist for investments in repurchase agreements
versus direct investments in short-term Treasury securities. The fund
reinforced its barbell structure by combining this position in repurchase
agreements with purchases in an area of the yield curve that offered relative
value-securities with longer maturities of six to thirteen months. This
portfolio structure provided a competitive yield for the fund.
With the harsh winter weather likely to be a drag on the economy, and
inflation remaining under control, we would anticipate additional easings in
monetary policy by the Fed in the future. Without a notable change in the
underlying economic fundamentals, we would look to reinforce the fund's
barbelled structure should market opportunities permit, and will attempt to
continue to maximize performance through ongoing relative value analysis.
However, changing economic and market developments are continuously monitored
to best serve our clients attracted to the short-term U.S. government market.
* These ratings are obtained after Standard & Poor's Ratings Group
evaluates a number of factors, including credit quality, market price
exposure and management. Standard & Poor's Ratings Group monitors the
portfolio weekly for developments that could cause changes in the ratings.
Money market funds and bond funds rated Aaa by Moody's Investors Service,
Inc. are judged to be of an investment quality similar to Aaa-rated fixed
income obligations, that is, they are judged to be of the best quality.
Ratings are subject to change and do not remove market risks.
** The National Association of Purchasing Manager's Index is a
diffusion index that measures the economic activity of the largest
manufacturers in the United States.
TREASURY OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM U.S. TREASURY OBLIGATIONS-24.5%
(A)U.S. TREASURY BILLS-13.5%
$772,000,000 4.85%-6.05%, 4/4/1996 - 11/14/1996 $ 754,110,899
U.S. TREASURY NOTES-11.0%
608,000,000 5.50%-9.375%, 3/31/1996 - 10/31/1996 611,223,351
TOTAL SHORT-TERM U.S. TREASURY OBLIGATIONS 1,365,334,250
(B)REPURCHASE AGREEMENTS-75.8%
250,000,000 Aubrey G. Lanston and Company, Inc., 5.90%, dated
1/31/1996, due 2/1/1996 250,000,000
200,000,000 BT Securities Corporation, 5.93%, dated 1/31/1996, due
2/1/1996 200,000,000
161,700,000 BZW Securities, Inc., 5.92%, dated 1/31/1996, due 2/1/199 161,700,000
244,000,000 Bear, Stearns and Co., Inc., 5.90%, dated 1/31/1996,
due 2/1/1996 244,000,000
250,000,000 CIBC Wood Gundy Securities Corp., 5.90%, dated 1/31/1996,
due 2/1/1996 250,000,000
265,000,000 Daiwa Securities America, Inc., 5.90%, dated 1/31/1996,
due 2/1/1996 265,000,000
175,000,000 Deutsche Bank Government Securities, Inc., 5.93%, dated
1/31/1996, due 2/1/1996 175,000,000
250,000,000 Donaldson, Lufkin and Jenrette Securities Corp., 5.90%, dated
1/31/1996, due 2/1/1996 250,000,000
275,000,000 Dresdner Securities (USA), Inc., 5.90%, dated 1/31/1996,
due 2/1/1996 275,000,000
275,000,000 First Chicago Capital Markets, Inc., 5.90%, dated 1/31/1996,
due 2/1/1996 275,000,000
150,000,000 First Union Capital Markets Corp., 5.90%, dated 1/31/1996,
due 2/1/1996 150,000,000
</TABLE>
TREASURY OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(B)REPURCHASE AGREEMENTS-CONTINUED
$ 55,000,000 Harris Government Securities, Inc., 5.93%, dated 1/31/1996,
due 2/1/1996 $ 55,000,000
270,000,000 Lehman Brothers, Inc., 5.95%, dated 1/31/1996, due 2/1/1996 270,000,000
400,000,000 NationsBank Capital Markets, 5.95%, dated 1/31/1996, due
2/1/1996 400,000,000
100,000,000 Nikko Securities Co. International, Inc., 5.90%, dated 1/31/1996,
due 2/1/1996 100,000,000
260,000,000 Nomura Securities International, Inc., 5.90%, dated 1/31/1996,
due 2/1/1996 260,000,000
50,000,000 State Street Bank and Trust Co., 5.90%, dated 1/31/1996,
due 2/1/1996 50,000,000
275,000,000 Swiss Bank Corp., New York, 5.90%, dated 1/31/1996,
due 2/1/1996 275,000,000
275,000,000 UBS Securities, Inc., 5.90%, dated 1/31/1996, due 2/1/1996 275,000,000
42,000,000 (c)Lehman Brothers, Inc., 5.55%, dated 12/21/1995,
due 2/20/1996 42,000,000
TOTAL REPURCHASE AGREEMENTS 4,222,700,000
TOTAL INVESTMENTS, AT AMORTIZED COST(D) $5,588,034,250
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase.
(b) The 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 the transaction to permit termination of the
repurchase agreement within seven days if the creditworthiness of the issuer
is downgraded.
(d) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net
assets ($5,571,079,168) at January 31, 1996.
(See Notes which are an integral part of the Financial Statements)
TREASURY OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1996 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Investments in repurchase agreements $ 4,222,700,000
Investments in securities 1,365,334,250
Total investments in securities, at amortized cost and value $ 5,588,034,250
Income receivable 10,975,067
Total assets 5,599,009,317
LIABILITIES:
Income distribution payable 25,652,805
Payable to Bank 1,823,350
Accrued expenses 453,994
Total liabilities 27,930,149
NET ASSETS for 5,571,079,168 shares outstanding $ 5,571,079,168
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$4,380,145,664 / 4,380,145,664 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$1,190,933,504 / 1,190,933,504 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TREASURY OBLIGATIONS FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1996 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $146,033,303
EXPENSES:
Investment advisory fee $ 4,985,755
Administrative personnel and services fee 1,886,223
Custodian fees 179,488
Transfer and dividend disbursing agent fees and expenses 52,350
Directors'/Trustees' fees 40,544
Auditing fees 6,624
Legal fees 2,576
Portfolio accounting fees 172,009
Shareholder services fee - Institutional Shares 5,075,313
Shareholder services fee - Institutional Service Shares 1,156,967
Share registration costs 357,272
Printing and postage 11,592
Insurance premiums 22,632
Taxes 12,512
Miscellaneous 8,096
Total expenses 13,969,953
Waivers-
Waiver of investment advisory fee $(2,642,231)
Waiver of shareholder services fee-Institutional Shares (5,075,313)
Total waivers (7,717,544)
Net expenses 6,252,409
Net investment income $139,780,894
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TREASURY OBLIGATIONS FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
JANUARY 31, JULY 31,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS-
Net investment income $ 139,780,894 $ 176,982,155
DISTRIBUTIONS TO SHAREHOLDERS-
Distributions from net investment income
Institutional Shares (114,576,621) (167,724,558)
Institutional Service Shares (25,204,273) (9,257,597)
Change in net assets resulting from distributions
to shareholders (139,780,894) (176,982,155)
SHARE TRANSACTIONS-
Proceeds from sale of shares 15,242,785,245 19,110,121,123
Net asset value of shares issued to shareholders in payment
of distributions declared 23,238,127 22,269,297
Cost of shares redeemed (13,679,866,477) (17,739,330,600)
Change in net assets resulting from share transactions 1,586,156,895 1,393,059,820
Change in net assets 1,586,156,895 1,393,059,820
NET ASSETS:
Beginning of period 3,984,922,273 2,591,862,453
End of period $ 5,571,079,168 $ 3,984,922,273
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TREASURY OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS-INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
1996 1995 1994 1993 1992 1991 1990(A)
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.03 0.03 0.05 0.07 0.04
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (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 $1.00
TOTAL RETURN(B) 2.87% 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% 0.20%*
Net investment income 5.64%* 5.42% 3.29% 3.11% 4.49% 6.65% 8.16%*
Expense waiver/reimbursement(c) 0.36%* 0.36% 0.10% 0.07% 0.08% 0.09% 0.15%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $4,380,146 $3,441,068 $2,582,975 $2,532,482 $2,432,037 $1,678,880 $576,048
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
TREASURY OBLIGATIONS FUND
FINANCIAL HIGHLIGHTS-INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
1996 1995 1994(A)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.003
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.003)
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00
TOTAL RETURN(B) 2.74% 5.23% 0.29%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.46%* 0.45% 0.39%*
Net investment income 5.45%* 5.53% 4.26%*
Expense waiver/reimbursement(c) 0.11%* 0.11% 0.10%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $1,190,933 $543,855 $8,887
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and
net investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
TREASURY OBLIGATIONS FUND
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996 (UNAUDITED)
(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 portfolios. The
financial statements included herein are only those of Treasury Obligations
Fund (the "Fund"), a diversified portfolio. The financial statements of the
other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held. The Fund offers two classes of shares: Institutional Shares
and Institutional Service Shares.
(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 uses the amortized cost method to value
its portfolio securities 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.
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.
TREASURY 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 January 31, 1996, capital paid-in aggregated
$5,571,079,168. Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31, JULY 31,
INSTITUTIONAL SHARES 1996 1995
<S> <C> <C>
Shares sold 11,656,697,335 17,554,361,142
Shares issued to shareholders in payment of distributions declared 12,968,260 18,926,732
Shares redeemed (10,730,587,604) (16,715,195,395)
Net change resulting from Institutional Share transactions 939,077,991 858,092,479
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31, JULY 31,
INSTITUTIONAL SERVICE SHARES 1996 1995
<S> <C> <C>
Shares sold 3,586,087,910 1,555,759,981
Shares issued to shareholders in payment of distributions declared 10,269,867 3,342,565
Shares redeemed (2,949,278,873) (1,024,135,205)
Net change resulting from Institutional Service Share transactions 647,078,904 534,967,341
Net change resulting from share transactions 1,586,156,895 1,393,059,820
</TABLE>
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 .20% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE-Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during
the period of the Administrative Services Agreement shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE-Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to
0.25% of average daily net assets of the Fund for the period. The fee paid to
FSSis used to finance certain services for shareholders and to maintain
shareholder accounts. FSS may voluntarily choose to waive any portion of its
fee. FSScan modify or terminate this voluntary waiver at any time at its sole
discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES-FServ, through its
registered transfer and dividend disbursing agent, Federated Shareholder
Services Company, maintains all necessary shareholder records and receives a
fee based on the size, type, and number of accounts 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.
TRUSTEES OFFICERS
<TABLE>
<S> <S>
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. J. Christopher Donahue
William J. Copeland President
J. Christopher Donahue Edward C. Gonzales
James E. Dowd Executive Vice President
Lawrence D. Ellis, M.D. John W. McGonigle
Edward L. Flaherty, Jr. Executive Vice President and Secretary
Peter E. Madden Richard B. Fisher
Gregor F. Meyer Vice President
John E. Murray, Jr. David M. Taylor
Wesley W. Posvar Treasurer
Marjorie P. Smuts J. Crilley Kelly
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
