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, 1997.
First, you will find an investment review on the short-term market from the
fund's portfolio manager. Following the investment review are the fund's
portfolio of investments and its financial statements.
Over the six-month reporting period, dividends paid to shareholders of
Institutional Service Shares and Cash II Shares each totaled $0.02 per
share. At the end of the period, net assets surpassed $2 billion.
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 period, the fund's assets were invested
in commercial paper (51.6%), variable rate instruments (24.2%), repurchase
agreements (9.9%), short-term notes (7.2%), time deposits (4.2%), and
certificates of deposit (3.1%).
Thank you for participating in the daily earning power of this high-quality
money market mutual fund. As always, we welcome your questions, comments, or
suggestions.
Sincerely,
[Graphic]
J. Christopher Donahue
President
March 15, 1997
* Although money market funds seek to maintain a stable net asset value of
$1.00 per share, there is no assurance that they will be able to do so. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
Automated Cash Management Trust invests in 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.
U.S. economic growth has slowed in a nearly ideal fashion. Labor markets are
still tight, but monthly payroll gains have downshifted from 233,000 per
month in the first half of 1996 to 171,000 over the second half. Home
building has slowed as well. Offsetting this consumer slowdown, however, is
a strengthening manufacturing sector. The National Association of Purchasing
Managers Index* has decreased to 52.0% for January, but industrial
production and capacity utilization remain high. So while the economy
remains mixed, overall it appears to be advancing at a moderate and
sustainable pace.
The lingering concern is that tight labor markets and gently rising wage
pressures will prove inflationary. To date, however, price pressures have
been evident only in the food and energy sectors. Elsewhere in the economy
systematic price pressures are largely absent. The consumer price index has
risen at an annualized rate of just 2.9% over the past six months while the
producer price index increased by 3.5% for the same period.
Thirty-day commercial paper started the period at 5.39% on August 1, 1996,
and declined very modestly to 5.35% on January 31, 1997. This lack of
movement reflects the 5.25% federal funds target maintained by the Federal
Reserve Board (the "Fed") for the entire six-month time period.
The money market yield curve flattened substantially throughout the time
period. One month commercial paper rates decreased 4 basis points while the
six-month rates dropped 22 basis points, reflecting the complacent market
attitude toward slow growth and low inflation.
The target average maturity range for the fund remained in the 35-45 day
target range for the entire period, reflecting a neutral position regarding
Fed policy. In structuring the fund, there is continued emphasis placed on
positioning 30-35% of the fund's assets in variable rate demand notes and
accomplishing a modest barbell structure.
During the six months ended January 31, 1997, the net assets of the fund
increased from $1,274.4 to $2,024.9 million while the 7-day net yield
increased from 4.92% to 4.94%** for Institutional Service Shares. The 7-day
net yield for Cash II Shares was 4.76%** as of January 31, 1997. The
effective average maturity of the fund on January 31, 1997, was 46 days.
* The National Association of Purchasing Managers Index is a diffusion index
that measures the economic activity of the largest manufacturers in the
United States.
** Performance quoted represents past performance and is not indicative of
future results. Yield will vary.
SHAREHOLDER MEETING RESULTS
A Special Meeting of the Shareholders of State Bond Cash Management Fund
(the "Portfolio"), a Portfolio of State Bond Money Funds, Inc., was held on
December 9, 1996. On October 11, 1996, the record date for shareholders
voting at the meeting, there were 2,784,696 total outstanding shares. The
following item was considered by shareholders and the results of their
voting were as follows:
ABSTENTIONS WITHHELD
AND AUTHORITY TO
AGENDA ITEM FOR AGAINST BROKER NON-VOTES VOTE
To approve or disapprove a proposed Agreement and Plan of Reorganization
between the Portfolio and Money Market Obligations Trust, on behalf of its
portfolio, Automated Cash Management Trust (the "Fund"), whereby the Fund would
acquire all of the net assets of the Portfolio in exchange for the Fund's
Institutional Service Shares to be distributed pro rata by the Portfolio to the
holders of its shares in complete liquidation of the Portfolio.
1,490,160 51,159 52,381 0
AUTOMATED CASH MANAGEMENT TRUST
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)COMMERCIAL PAPER -- 51.6%
BANKING -- 14.7%
$ 13,000,000 ABN AMRO Bank N.V., Amsterdam, 5.594% - 5.794%,
2/28/1997 - 3/6/1997 $ 12,941,556
18,000,000 Abbey National N.A. Corp., (Guaranteed by Abbey National
Bank PLC, London), 5.488% - 5.635%, 3/17/1997 - 4/24/1997 17,824,784
82,000,000 Bank of Nova Scotia, Toronto, 5.393% - 5.604%, 3/5/1997 - 7/14/1997 81,220,254
25,000,000 Commonwealth Bank of Australia, Sydney, 5.520% - 5.540%,
7/21/1997 - 7/24/1997 24,358,385
15,000,000 Deutsche Bank Financial, Inc., (Guaranteed by Deutsche Bank,
AG), 5.404%, 3/12/1997 14,913,387
15,000,000 National Australia Funding, Inc., (Guaranteed by National Australia
Bank, Ltd., Melbourne), 5.540%, 2/3/1997 14,995,508
12,000,000 PEMEX Capital, Inc., (Swiss Bank Corp., Basle LOC), 5.497%,
4/21/1997 11,859,117
15,000,000 Royal Bank of Canada, Montreal, 5.499%, 7/14/1997 14,636,646
15,000,000 Societe Generale North America, Inc., (Guaranteed by Societe
Generale, Paris), 5.500% - 5.620%, 3/27/1997 - 4/9/1997 14,868,165
72,000,000 Svenska Handelsbanken, Inc., (Guaranteed by Svenska
Handelsbanken, Stockholm), 5.433% - 5.620%, 2/18/1997 - 7/23/1997 71,321,526
15,000,000 Toronto Dominion Holdings (USA), Inc., (Guaranteed by
Toronto-Dominion Bank), 5.457%, 6/13/1997 14,707,950
3,400,000 Westpac Capital Corp., (Guaranteed by Westpac Banking Corp. Ltd.),
5.526%, 2/14/1997 3,393,395
Total 297,040,673
BROKERAGE -- 1.7%
35,000,000 Merrill Lynch & Co., Inc., 5.371% - 5.424%, 2/11/1997 - 4/24/1997 34,702,917
</TABLE>
AUTOMATED CASH MANAGEMENT TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)COMMERCIAL PAPER -- CONTINUED
FINANCE - COMMERCIAL -- 25.1%
$ 14,486,000 Alpha Finance Corp., Ltd., 5.384% - 5.530%, 2/28/1997 - 7/29/1997 $ 14,202,123
92,180,000 Asset Securitization Cooperative Corp., 5.359% - 5.454%,
2/7/1997 - 4/29/1997 91,701,427
76,200,000 Beta Finance, Inc., 5.359% - 5.563%, 2/3/1997 - 5/27/1997 75,679,931
52,000,000 CIT Group Holdings, Inc., 5.381% - 5.523%, 2/3/1997 - 3/4/1997 51,906,046
10,000,000 CXC, Inc., 5.387%, 2/12/1997 9,983,775
20,000,000 Corporate Asset Funding Co., Inc. (CAFCO), 5.378% - 5.415%,
2/19/1997 - 3/6/1997 19,924,817
41,754,000 Falcon Asset Securitization Corp., 5.372% - 5.592%,
2/19/1997 - 7/17/1997 41,340,295
74,000,000 General Electric Capital Corp., 5.410% - 5.784%, 3/6/1997 - 6/6/1997 72,969,219
56,830,000 Greenwich Funding Corp., 5.378% - 5.475%,
2/25/1997 - 6/12/1997 56,340,341
75,575,000 PREFCO-Preferred Receivables Funding Co., 5.372% - 5.785%,
2/13/1997 - 4/25/1997 75,226,698
Total 509,274,672
FINANCE - RETAIL -- 6.8%
13,000,000 American Express Credit Corp., 5.421%, 5/23/1997 12,788,360
35,000,000 Associates Corp. of North America, 5.503%, 2/3/1997 34,989,306
8,000,000 Avco Financial Services, Inc., 5.784%, 3/5/1997 7,960,036
5,000,000 Household Finance Corp., 5.412%, 3/11/1997 4,971,817
31,000,000 McKenna Triangle National Corp., 5.374% - 5.530%,
2/20/1997 - 4/17/1997 30,843,618
46,000,000 New Center Asset Trust, A1+/P1 Series, 5.454% - 5.601%,
2/21/1997 - 7/10/1997 45,268,349
Total 136,821,486
</TABLE>
AUTOMATED CASH MANAGEMENT TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)COMMERCIAL PAPER -- CONTINUED
INSURANCE -- 1.3%
$ 10,000,000 American General Corp., 5.503%, 2/3/1997 $ 9,996,944
17,030,000 Marsh & McLennan Cos., Inc., 5.472%, 2/3/1997 17,024,825
Total 27,021,769
OIL & OIL FINANCE -- 1.4%
4,000,000 Chevron Transport Corp., (Guaranteed by Chevron Corp.),
5.678%, 3/20/1997 3,971,173
25,000,000 Koch Industries, Inc., 5.583%, 2/3/1997 24,992,250
Total 28,963,423
PHARMACEUTICALS AND HEALTH CARE -- 0.6%
12,000,000 Glaxo Wellcome PLC, 5.373%, 2/25/1997 11,957,600
TOTAL COMMERCIAL PAPER 1,045,782,540
SHORT-TERM NOTES -- 7.2%
BANKING -- 1.5%
16,500,000 (a)City of Cleveland, (Union Bank of Switzerland, Zurich LOC,
Credit Suisse, Zurich LOC), 5.560%, 2/4/1997 16,500,000
14,000,000 (a)(b)SALTS III Cayman Island Corp., (Bankers Trust International,
PLC Swap Agreement), 5.788%, 7/23/1997 14,000,000
Total 30,500,000
BROKERAGE -- 1.7%
35,000,000 (a)(b)Goldman Sachs Group, LP, 5.563%, 4/28/1997 35,000,000
FINANCE - AUTOMOTIVE -- 2.0%
30,000,000 (a)Ford Credit Auto Lease Trust 1996-1, Class A-1, 5.451%, 11/15/1997 29,997,638
6,696,755 Nationsbank Auto Owner Trust 1996-A, Class A-1, 5.776%, 8/15/1997 6,699,812
4,405,129 (a)Olympic Automobile Receivables Trust 1996-D, Class A-1, 5.430%,
12/15/1997 4,405,129
Total 41,102,579
FINANCE - COMMERCIAL -- 0.8%
15,100,000 (a)Cargill Lease Receivables Trust 1996-A, Class A-1, 5.613%,
12/20/1997 15,100,000
</TABLE>
AUTOMATED CASH MANAGEMENT TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM NOTES -- CONTINUED
FINANCE - EQUIPMENT -- 1.2%
$ 23,213,413 Capita Equipment Receivables Trust 1996-1, Class A-1, 5.600%,
10/15/1997 $ 23,213,414
TOTAL SHORT-TERM NOTES 144,915,993
CERTIFICATE OF DEPOSITS -- 3.1%
BANKING -- 3.1%
20,000,000 Bank of Scotland, Edinburgh, 5.480%, 6/13/1997 20,000,713
15,000,000 Bayerische Vereinsbank AG, Munich, 5.530%, 7/10/1997 15,000,645
8,000,000 Mellon Bank NA, Pittsburgh, 5.500% - 5.527%, 2/21/1997 - 4/9/1997 8,000,000
20,000,000 Svenska Handelsbanken, Inc., (Guaranteed by Svenska
Handelsbanken, Stockholm), 5.430%, 5/5/1997 - 5/30/1997 19,999,702
TOTAL CERTIFICATE OF DEPOSITS 63,001,060
(C)VARIABLE RATE INSTRUMENTS -- 24.2%
BANKING -- 14.8%
5,000,000 American Seaway Foods, Inc., (KeyBank, N.A. LOC), 5..59%,
2/7/1997 5,000,000
6,650,000 Associated Materials, Inc., (KeyBank, N.A. LOC), 5.59%, 2/7/1997 6,650,000
15,000,000 Australia & New Zealand Banking Group, Melbourne, 5.447%,
2/3/1997 14,997,283
30,000,000 Bank One, Columbus, N.A., 5.350%, 1/31/1997 29,988,164
60,000,000 Bank One, Milwaukee, WI N.A., 5.270%, 2/4/1997 59,970,067
6,000,000 Beverly California Corp., (PNC Bank, N.A. LOC), 5.447%, 2/3/1997 6,000,000
17,700,000 Beverly Hills Nursing Center, Inc., Medilodge Project Series 1996,
(KeyBank, N.A. LOC), 5.51%, 2/6/1997 17,700,000
9,900,000 Cloquet, MN, Series 1996-B Potlach Corp., (Credit Suisse,
Zurich LOC), 5.550%, 2/5/1997 9,900,000
5,300,000 Development Authority of Richmond Cty, GA,
(PNC Bank, N.A. LOC), 5.447%, 2/3/1997 5,300,000
60,000,000 Liquid Asset Backed Securities Trust, Series 1996-3, (Westdeutsche
Landesbank Girozentrale Swap Agreement), 5.442%, 2/15/1997 60,000,000
</TABLE>
AUTOMATED CASH MANAGEMENT TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)VARIABLE RATE INSTRUMENTS -- CONTINUED
BANKING -- CONTINUED
$ 7,000,000 Massachusetts IFA, (Kendell Square), (PNC Bank, N.A. LOC), 5.46%,
2/6/1997 $ 7,000,000
12,000,000 National Funding Corp., Series 1994-A, (American National Bank,
Chicago LOC), 5.43%, 2/6/1997 12,000,000
4,000,000 SMM Trust, Series 1996-B, (Morgan Guaranty Trust Co., New York
Swap Agreement), 5.550%, 2/4/1997 4,000,000
40,000,000 SMM Trust, Series 1996-I, (Morgan Guaranty Trust Co., New York
Swap Agreement), 5.488%, 2/27/1997 39,999,557
7,500,000 SMM Trust, Series 1996-L, (Morgan Guaranty Trust Co., New York
Swap Agreement), 5.472%, 2/15/1997 7,500,000
5,000,000 SMM Trust, Series 1996-V, (Morgan Guaranty Trust Co., New York
Swap Agreement), 5.581%, 2/24/1997 5,000,000
2,796,000 Vista Funding Corp., Series 1996-A, (Bank One, Dayton, N.A. LOC),
5.45%, 2/6/1997 2,796,000
6,350,000 Wendys of Las Vegas and San Antonio, (Huntington National Bank,
Columbus, OH LOC), 5.46%, 2/6/1997 6,350,000
387,000 Westcourt, (Bank One, Texas N.A. LOC), 5.50%, 2/6/1997 387,000
Total 300,538,071
ELECTRICAL EQUIPMENT -- 1.2%
3,850,894 Marta Leasing Ltd., (Guaranteed by General Electric Co.), 5.447%,
2/3/1997 3,850,894
20,181,046 Northwest Airlines, Inc., (Guaranteed by General Electric Co.),
5.422%, 2/3/1997 20,181,046
Total 24,031,940
FINANCE - RETAIL -- 1.5%
30,000,000 Carco Auto Loan Master Trust, Series 1993-2 Class A1, 5.655%,
2/15/1997 30,000,000
</TABLE>
AUTOMATED CASH MANAGEMENT TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)VARIABLE RATE INSTRUMENTS -- CONTINUED
INSURANCE -- 6.2%
$ 44,500,000 General American Life Insurance Co., 5.638%, 2/23/1997 $ 44,500,000
25,000,000 (b)Peoples Security Life Insurance, 6.110%, 2/1/1997 25,000,000
25,000,000 (b)SunAmerica Life Insurance Co., 5.538%, 2/27/1997 25,000,000
30,000,000 Transamerica Occidental Life Insurance Company, 5.438%, 2/27/1997 30,000,000
Total 124,500,000
SOVEREIGN GOVERNMENT -- 0.5%
10,000,000 (b)Short Term Asset Corp., Secured Class F-1 Bonds, 5.442%, 2/15/1997 10,000,000
TOTAL VARIABLE RATE INSTRUMENTS 489,070,011
(A)TIME DEPOSITS -- 4.2%
BANKING -- 4.2%
35,000,000 Mellon Bank NA, Pittsburgh, 5.625%, 2/3/1997 35,000,000
50,000,000 Toronto-Dominion Bank, 5.625%, 2/3/1997 50,000,000
TOTAL TIME DEPOSITS 85,000,000
(D)REPURCHASE AGREEMENTS -- 9.9%
90,000,000 Bear, Stearns and Co., 5.580%, dated 1/31/1997, due 2/3/1997 90,000,000
51,200,000 Daiwa Securities America, Inc., 5.580%, dated 1/31/1997,
due 2/3/1997 51,200,000
10,000,000 Sanwa-BGK Securities Co., L.P., 5.350%, dated 1/31/1997,
due 2/3/1997 10,000,000
50,000,000 UBS Securities, Inc., 5.530%, dated 1/31/1997, due 2/3/1997 50,000,000
TOTAL REPURCHASE AGREEMENTS 201,200,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(E) $2,028,969,604
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase.
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At January 31, 1997, these securities
amounted to $109,000,000 which represents 5.38% of net assets.
(c) Variable rate securities with current rate and next demand date.
(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
($2,024,908,774) at January 31, 1997.
The following acronyms are used throughout this portfolio:
IFA -- Industrial Finance Authority
LOC -- Letter of Credit
LP -- Limited Partnership
PLC -- Public Limited Company
(See Notes which are an integral part of the Financial Statements)
AUTOMATED CASH MANAGEMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 2,028,969,604
Cash 286,618
Income receivable 3,134,517
Receivable for shares sold 36,588
Total assets 2,032,427,327
LIABILITIES:
Income distribution payable $ 6,960,956
Accrued expenses 557,597
Total liabilities 7,518,553
NET ASSETS for 2,024,908,774 shares outstanding $ 2,024,908,774
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SERVICE SHARES:
$1,339,294,208 / 1,339,294,208 shares outstanding $1.00
CASH II SHARES:
$685,614,566 / 685,614,566 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 45,377,451
EXPENSES:
Investment advisory fee $ 4,109,962
Administrative personnel and services fee 621,003
Custodian fees 98,715
Transfer and dividend disbursing agent fees and expenses 141,474
Directors'/Trustees' fees 10,396
Auditing fees 9,704
Legal fees 2,036
Portfolio accounting fees 69,472
Distribution services fee -- Cash II Shares 356,960
Shareholder services fee -- Institutional Service Shares 1,698,021
Shareholder services fee -- Cash II Shares 356,960
Share registration costs 110,960
Printing and postage 12,604
Insurance premiums 6,488
Taxes 20,096
Miscellaneous 5,072
Total expenses 7,629,923
Waivers --
Waiver of investment advisory fee $ (2,493,899)
Waiver of distribution services fee -- Cash II Shares (109,944)
Waiver of shareholder services fee -- Institutional Service Shares (47,545)
Total waivers (2,651,388)
Net expenses 4,978,535
Net investment income $ 40,398,916
</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
(UNAUDITED) YEAR ENDED
JANUARY 31, JULY 31,
1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 40,398,916 $ 64,070,284
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income
Institutional Service Shares (33,525,882) (64,070,284)
Cash II Shares (6,873,034) --
Change in net assets resulting from distributions to
shareholders (40,398,916) (64,070,284)
SHARE TRANSACTIONS --
Proceeds from sale of shares 5,104,818,641 7,830,763,212
Net asset value of shares issued to shareholders in payment of
distributions declared 22,338,164 37,792,484
Cost of shares redeemed (4,376,667,395) (7,735,179,515)
Change in net assets resulting from share transactions 750,489,410 133,376,181
Change in net assets 750,489,410 133,376,181
NET ASSETS:
Beginning of period 1,274,419,364 1,141,043,183
End of period $ 2,024,908,774 $ 1,274,419,364
</TABLE>
(See Notes which are an integral part of the Financial Statements)
AUTOMATED CASH MANAGEMENT TRUST
FINANCIAL HIGHLIGHTS -- INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS THREE
ENDED YEAR MONTHS
(UNAUDITED) ENDED ENDED
JANUARY JULY 31, JULY 31, YEAR ENDED APRIL 30,
31,
1997 1996 1995(A) 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
BEGINNING OF $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
Net investment 0.02 0.05 0.01 0.03 0.03 0.05 0.07 0.08 0.08 0.07
income
LESS DISTRIBUTIONS
Distributions
from net
investment (0.02) (0.05) (0.01) (0.03) (0.03) (0.05) (0.07) (0.08) (0.08) (0.07)
income
NET ASSET VALUE,
END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.51% 5.20% 1.42% 2.84% 3.11% 5.02% 7.52% 8.69% 8.20% 6.72%
RATIOS TO
AVERAGE NET
ASSETS
Expenses 0.57%* 0.57% 0.57%* 0.57% 0.56% 0.56% 0.55% 0.55% 0.55% 0.55%
Net investment 4.94%* 5.08% 5.60%* 2.80% 3.07% 4.88% 7.23% 8.32% 7.93% 6.53%
income
Expense waiver/
reimbursement(c) 0.31%* 0.31% 0.40%* 0.07% 0.04% 0.03% 0.12% 0.09% 0.10% 0.04%
SUPPLEMENTAL DATA
Net assets, end
of
period (000 $1,339,294 $1,274,419 $1,141,043 $975,453 $1,172,170 $1,220,212 $1,464,710 $1,164,013 $943,136 $924,558
omitted)
</TABLE>
* Computed on an annualized basis.
(a) For the period from May 1, 1995, to July 31, 1995, 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 TRUST
FINANCIAL HIGHLIGHTS -- CASH II SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31,
1997(A)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00
TOTAL RETURN(B) 1.67%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.76%*
Net investment income 4.81%*
Expense waiver/reimbursement(c) 0.38%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $685,615
</TABLE>
* Computed on an annualized basis.
(a) For the period from September 19, 1996 (date of initial public offering)
through January 31, 1997.
(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 TRUST
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1997 (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 Automated Cash
Management Trust (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 investment objective of the Fund is
stability of principal and current income consistent with stability of
principal.
The Fund offers two classes of shares: Institutional Service Shares and Cash
II Shares. Effective September 19, 1996, the Fund added Cash II Shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS -- The Fund's use of the amortized cost method to
value its portfolio securities is in accordance with Rule 2a-7 under the
Act.
REPURCHASE AGREEMENTS -- It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less
than the repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS -- Interest income and
expenses are accrued daily. Bond premium and discount, if applicable, are
amortized as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
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 Trustees. The Fund will not
incur any registration costs upon such resales. Restricted securities are
valued at amortized cost in accordance with Rule 2a-7 under the Act.
Additional information on each restricted security held at January 31, 1997
is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST
Goldman Sachs Group, LP 1/27/1997 $35,000,000
Peoples Security Life Insurance 7/08/1996 25,000,000
SALTS III Cayman Island Corp. 1/23/1997 14,000,000
Short Term Asset Corp. 5/07/1996 10,000,000
SunAmerica Life Insurance Co. 9/01/1996 25,000,000
USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER -- Investment transactions are accounted for on the trade date.
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, 1997, capital paid-in aggregated
$2,024,908,774.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JANUARY 31, JULY 31,
1997 1996
INSTITUTIONAL SERVICE SHARES SHARES SHARES
<S> <C> <C>
Shares sold 3,696,731,228 7,830,763,212
Shares issued to shareholders in payment of distributions declared 16,961,081 37,792,484
Shares redeemed (3,648,817,465) (7,735,179,515)
Net change resulting from Institutional Service Share transactions 64,874,844 133,376,181
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JANUARY 31, JULY 31,
1997(A) 1996
CASH II SHARES SHARES SHARES
<S> <C> <C>
Shares sold 1,408,087,413 --
Shares issued to shareholders in payment of distributions declared 5,377,083 --
Shares redeemed (727,849,930) --
Net change resulting from Cash II Share transactions 685,614,566 --
Net change resulting from share transactions 750,489,410 133,376,181
</TABLE>
(a) For the period from September 19, 1996 (date of the initial public
offering) through January 31, 1997.
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE -- Federated Management, the Fund's investment
adviser (the "Adviser"), receives for its services an annual investment
advisory fee equal to 0.50% of the Fund's average daily net assets. The
Adviser may voluntarily choose to waive any portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
ADMINISTRATIVE FEE -- Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during
the period of the Administrative Services Agreement shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE -- The Fund has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan,
the Fund will compensate Federated Securities Corp. ("FSC"), the principal
distributor, from the net assets of the Fund to finance activities intended
to result in the sale of the Fund's Cash II Shares. The Plan provides that
the Fund may incur distribution expenses up to 0.25% of the average daily
net assets of the Cash II Shares, annually, to compensate FSC. FSC may
voluntarily choose to waive a portion of this fee. FSC can modify or
terminate this voluntary waiver at any time at its sole discretion.
SHAREHOLDER SERVICES FEE -- Under the terms of a Shareholder Services
Agreement with Federated Shareholder Services ("FSS"), the Fund will pay FSS
up to 0.25% of average daily net assets of the Fund for the period. The fee
paid to FSS is used to finance certain services for shareholders and to
maintain shareholder accounts. FSS may voluntarily choose to waive any
portion of its fee. FSS can modify or terminate this voluntary waiver at any
time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES -- FServ, through
its subsidiary, Federated Shareholder Services Company ("FSSC") serves as
transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is
based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
GENERAL -- Certain of the Officers and Trustees of the Trust are Officers
and Directors or Trustees of the above companies.
TRUSTEES OFFICERS
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
J. Christopher Donahue
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
John F. Donahue
Chairman
J. Christopher Donahue
President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
J. Crilley Kelly
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective investors only
when preceded or accompanied by the fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
AUTOMATED
CASH
MANAGEMENT
TRUST
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JANUARY 31, 1997
[Graphic]
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 60934N864
Cusip 60934N831
8112802 (3/97)
[Graphic]
[Graphic]
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, 1997. First, you will find an investment review on the short-term
government market from the fund's portfolio manager. Following the
investment review are the fund's portfolio of investments and its financial
statements.
Over the six-month reporting period, dividends paid to shareholders of
Institutional Shares and Institutional Service Shares each totaled $0.03 per
share. At the end of the period, net assets reached the $3.5 billion mark,
up from $2.9 billion at the beginning of the period.
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 period, the fund's portfolio was
invested in repurchase agreements fully collateralized by U.S. government
securities (51.8%), and in short-term U.S. government obligations (48.1%).
Thank you for your confidence in the daily earning power of this
high-quality cash investment. As always, we welcome your questions and
comments.
Sincerely,
[Graphic]
J. Christopher Donahue
President
March 15, 1997
* Although money market funds seek to maintain a stable net asset value of
$1.00 per share, there is no assurance that they will be able to do so. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
Government Obligations Fund, which is rated AAAm* by Standard & Poor's
Ratings Group and Aaa* by Moody's Investors Service, Inc., 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, Federal Farm Credit Bank System, Federal Home Loan Bank System,
and Federal Home Loan Mortgage Corporation, and maintained a small Treasury
position for liquidity purposes.
Over the six months ended January 31, 1997, the Federal Reserve Board (the
"Fed") stood pat in the face of economic growth that exceeded the 21/2% pace
thought to be the non-inflationary potential. Confronted with persistent
strength in the interest rate-sensitive sectors, the Fed stuck to its belief
that economic growth would return to a more moderate pace. Early in the
period, the market itself was not so sure, and movements in interest rates
proved to be rather volatile as expectations regarding the timing and extent
of the next policy move from the Fed swayed back and forth with each new
piece of economic data. When signs of the long-awaited slowdown finally
began to emerge, the market then fretted that it might not be occurring
quickly enough to prevent the need for the Fed to tighten in order to ward
off inflationary pressures. By the end of the reporting period, however, the
market calmed itself once more as growth in employment and housing moderated
and inflation remained tame. While the advance release for fourth quarter
Gross Domestic Product was a robust 4.7%, it was boosted by net exports and
a number of one-time factors, and the underlying fundamentals point to more
sedate growth in the first quarter. Overall, the federal funds target rate
remained unchanged over the period, at 5.25%, where it has been since late
January 1996.
Movements in interest rates early in the period reflected the market
uncertainty. The yield on the three-month Treasury bill peaked at 5.35% in
early September amid fears that the robust economy might spark inflation --
particularly in the face of tight labor market conditions. The yield then
plunged to 5% in late September/early October as signs of tempered growth
began to appear and relief finally took hold. The yield then rebounded to a
more realistic 5.15%, and traded within a fairly narrow range -- with the
exception of a technically-driven drop at year-end -- for the remainder of
the reporting period as the market embraced the idea that the Fed was likely
to be on hold indefinitely. Overall, the yields at the front end of the
Treasury yield curve ended the period 16 to 26 basis points lower,
reflecting the market's retreat from expectations of an imminent tightening
in monetary policy.
* An AAAm rating is 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. These ratings do not remove
market risks and are subject to change.
The fund was targeted in a 35-45 day average maturity target range over the
period, essentially a neutral stance for the portfolio. Once an average
maturity range is established, the fund attempts to maximize performance
through ongoing relative value analysis. The fund's structure remained
barbelled over the reporting period, as a yield advantage continued to exist
for repurchase agreements relative to other short-term investments. The fund
combined a position in repurchase agreements collateralized by U.S.
government mortgage-backed securities with short-term agency floating rate
notes to form the front end of the barbell. We coupled this position with
purchases of fixed rate Treasury or agency securities with longer maturities
of between 6 and 13 months. This portfolio structure provided a competitive
yield for the fund. Over the reporting period, we added modestly to the
fund's floating rate exposure, and increased our holdings of fixed rate
agency securities as spreads offered on these instruments widened relative
to Treasury securities.
The Fed is likely to be fairly content with the present trend of moderating
growth and benign inflation, and, in our opinion, should not be moved to
change monetary policy in the near term. We expect that they will continue
to keep a watchful eye on potential inflationary pressures, however, in
light of continued tight labor market conditions. We would expect the front
end of the market to continue to be range-bound with a slight positive
slope, and we will likely maintain our current neutral positioning. However,
changing economic and market developments are continuously monitored to best
serve our clients attracted to the short-term U.S. government market.
SHAREHOLDER MEETING RESULTS
A Special Meeting of the Shareholders of Government Obligations Money Market
Fund (the "Portfolio"), a Portfolio of Lehman Brothers Institutional Funds
Group Trust, was held on November 13, 1996. On October 11, 1996, the record
date for shareholders voting at the meeting, there were 47,928,566 total
outstanding shares. The following items were considered by shareholders and
the results of their voting were as follows:
<TABLE>
<CAPTION>
ABSTENTIONS WITHHELD
AND AUTHORITY TO
AGENDA ITEM FOR AGAINST BROKER NON-VOTES VOTE
<C> <S>
1. To approve a proposed Agreement and Plan of Reorganization between Lehman Brothers Institutional Funds
Group Trust, on behalf of the Portfolio, and Money Market Obligations Trust (the "Trust"), on behalf of its
portfolio, Government Obligations Fund (the "Fund"), whereby the Trust would acquire all of the assets and
known liabilities of the Portfolio in exchange for Institutional Shares and Institutional Service Shares of
the Fund to be distributed pro rata by the Portfolio to holders of Class A Shares and Class B Shares,
respectively, in complete liquidation of the Portfolio.
</TABLE>
<TABLE>
<C> <S> <C> <C> <C> <C>
36,225,077 0 0 0
2. Election of thirteen Trustees to serve until the next Annual Meeting of Shareholders and until their
successors have been elected and qualified.
John F. Donahue 36,225,077 0 0 0
Thomas G. Bigley 36,225,077 0 0 0
John T. Conroy, Jr. 36,225,077 0 0 0
William J. Copeland 36,225,077 0 0 0
J. Christopher Donahue 36,225,077 0 0 0
James E. Dowd 36,225,077 0 0 0
Lawrence D. Ellis, M.D. 36,225,077 0 0 0
Edward L. Flaherty, Jr. 36,225,077 0 0 0
Peter E. Madden 36,225,077 0 0 0
Gregor F. Meyer 36,225,077 0 0 0
John E. Murray, Jr. 36,225,077 0 0 0
Wesley W. Posvar 36,225,077 0 0 0
Marjorie P. Smuts 36,225,077 0 0 0
</TABLE>
GOVERNMENT OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM OBLIGATIONS -- 48.1%
$ 16,500,000 Federal Farm Credit Bank Note -- 0.5%
5.600%, 6/3/1997 $ 16,492,263
24,000,000 (a)Federal Farm Credit Bank, Discount Note -- 0.7%
5.377%, 5/22/1997 23,620,867
67,000,000 (b)Federal Farm Credit Bank, Floating Rate Note -- 1.9%
5.300%, 3/1/1997 66,942,382
31,500,000 Federal Home Loan Bank -- 0.9%
5.460% - 5.710%, 11/18/1997 - 12/12/1997 31,485,912
101,070,000 (a)Federal Home Loan Bank, Discount Note -- 2.8%
5.361% - 5.476%, 5/1/1997 - 7/15/1997 99,149,086
50,500,000 (b)Federal Home Loan Bank, Floating Rate Note -- 1.4%
5.310% - 5.780%, 3/4/1997 50,473,758
19,000,000 Federal Home Loan Mortgage Corp. -- 0.5%
5.640%, 8/28/1997 18,973,603
30,000,000 (b)Federal Home Loan Mortgage Corp., Floating Rate Note -- 0.8%
5.420%, 2/4/1997 29,971,486
510,065,000 (a)Federal National Mortgage Association, Discount Note -- 14.2%
5.364% - 5.745%, 2/28/1997 - 7/30/1997 503,460,731
247,500,000 (b)Federal National Mortgage Association, Floating Rate Note -- 6.9%
4.985% - 5.430%, 2/4/1997 - 2/18/1997 247,432,518
13,500,000 Student Loan Marketing Association -- 0.4%
5.620%, 6/30/1997 13,480,331
180,125,000 (b)Student Loan Marketing Association, Floating Rate Note -- 5.0%
5.340% - 5.450%, 2/4/1997 180,048,601
</TABLE>
GOVERNMENT OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM OBLIGATIONS -- CONTINUED
$218,665,000 (b)Housing Urban Development, Floating Rate Note -- 6.2%
5.763%, 3/1/1997 $ 218,665,000
13,000,000 (a)U.S. Treasury Bill -- 0.4%
5.665%, 8/21/1997 12,610,953
196,000,000 U.S. Treasury Notes -- 5.5%
5.625% - 8.500%, 3/31/1997 - 9/30/1997 196,320,812
TOTAL SHORT-TERM OBLIGATIONS 1,709,128,303
(C)REPURCHASE AGREEMENTS -- 51.8%
175,000,000 Bear, Stearns and Co., 5.650%, dated 1/31/1997, due 2/3/1997 175,000,000
50,000,000 CIBC Wood Gundy Securities Corp., 5.610%, dated 1/31/1997,
due 2/3/1997 50,000,000
35,000,000 Deutsche Bank Government Securities, Inc., 5.600%, dated
1/31/1997, due 2/3/1997 35,000,000
150,000,000 Goldman Sachs Group, LP, 5.630%, dated 1/31/1997, due 2/3/1997 150,000,000
265,000,000 HSBC Securities, Inc., 5.650%, dated 1/31/1997, due 2/3/1997 265,000,000
100,000,000 J.P. Morgan & Co., Inc., 5.600%, dated 1/31/1997, due 2/3/1997 100,000,000
175,000,000 Nikko Securities, 5.650%, dated 1/31/1997, due 2/3/1997 175,000,000
175,000,000 Nomura Securities International, Inc., 5.650%, dated 1/31/1997,
due 2/3/1997 175,000,000
160,000,000 Smith Barney, Inc., 5.650%, dated 1/31/1997, due 2/3/1997 160,000,000
20,000,000 State Street Bank and Trust Co., 5.550%, dated 1/31/1997,
due 2/3/1997 20,000,000
28,800,000 Swiss Bank Capital Markets, 5.570%, dated 1/31/1997, due 2/3/1997 28,800,000
100,000,000 UBS Securities, Inc., 5.620%, dated 1/31/1997, due 2/3/1997 100,000,000
90,000,000 (d)Goldman Sachs Group, LP, 5.330%, dated 1/24/1997, due 3/25/1997 90,000,000
50,000,000 (d)Goldman Sachs Group, LP, 5.370%, dated 12/2/1996, due 2/3/1997 50,000,000
78,000,000 (d)J.P. Morgan & Co., Inc., 5.330%, dated 1/13/1997, due 3/17/1997 78,000,000
</TABLE>
GOVERNMENT OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)REPURCHASE AGREEMENTS -- CONTINUED
$ 53,000,000 (d)Merrill Lynch, Pierce, Fenner and Smith, 5.340%, dated 1/30/1997,
due 4/1/1997 $ 53,000,000
82,000,000 (d)Morgan Stanley Group, Inc., 5.430%, dated 12/30/1996,
due 2/28/1997 82,000,000
53,000,000 (d)UBS Securities, Inc., 5.350%, dated 1/30/1997, due 4/1/1997 53,000,000
TOTAL REPURCHASE AGREEMENTS 1,839,800,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(E) $3,548,928,303
</TABLE>
(a) Each issue shows the rate of discount 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.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($3,549,608,669) at January 31, 1997.
The following acronym is used throughout this portfolio:
LP -- Limited Partnership
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Investments in repurchase agreements $ 1,839,800,000
Investments in securities 1,709,128,303
Total investments in securities, at amortized cost and value $ 3,548,928,303
Cash 2,599,882
Income receivable 12,990,830
Total assets 3,564,519,015
LIABILITIES:
Income distribution payable 14,481,491
Accrued expenses 428,855
Total liabilities 14,910,346
Net Assets for 3,549,608,669 shares outstanding $ 3,549,608,669
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$2,683,453,137 / 2,683,453,137 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$866,155,532 / 866,155,532 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 85,549,183
EXPENSES:
Investment advisory fee $ 3,142,744
Administrative personnel and services fee 1,187,284
Custodian fees 140,182
Transfer and dividend disbursing agent fees and expenses 52,235
Directors'/Trustees' fees 10,281
Auditing fees 6,719
Legal fees 9,722
Portfolio accounting fees 128,778
Shareholder services fee -- Institutional Shares 2,927,401
Shareholder services fee -- Institutional Service Shares 1,001,030
Share registration costs 130,347
Printing and postage 9,734
Insurance premiums 13,842
Taxes 8,636
Miscellaneous 6,894
Total expenses 8,775,829
Waivers --
Waiver of investment advisory fee $ (1,635,513)
Waiver of shareholder services fee -- Institutional Shares (2,927,401)
Total waivers (4,562,914)
Net expenses 4,212,915
Net investment income $ 81,336,268
</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) YEAR ENDED
JANUARY 31, JULY 31,
1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 81,336,268 $ 135,465,845
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income
Institutional Shares (61,355,618) (108,299,075)
Institutional Service Shares (19,980,650) (27,166,770)
Change in net assets resulting from distributions to
shareholders (81,336,268) (135,465,845)
SHARE TRANSACTIONS --
Proceeds from sale of shares 10,066,767,827 14,537,344,438
Net asset value of shares issued to shareholders in payment of
distributions declared 20,944,159 39,437,151
Cost of shares redeemed (9,423,376,231) (13,957,129,903)
Change in net assets resulting from share transactions 664,335,755 619,651,686
Change in net assets 664,335,755 619,651,686
NET ASSETS:
Beginning of period 2,885,272,914 2,265,621,228
End of period $ 3,549,608,669 $ 2,885,272,914
</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,
1997 1996 1995 1994 1993 1992 1991 1990(A)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM
INVESTMENT
OPERATIONS
Net investment 0.03 0.05 0.05 0.03 0.03 0.05 0.07 0.03
income
LESS DISTRIBUTIONS
Distributions
from net
investment (0.03) (0.05) (0.05) (0.03) (0.03) (0.05) (0.07) (0.03)
income
NET ASSET VALUE,
END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.67% 5.55% 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% 0.20%*
Net investment
income 5.24%* 5.41% 5.58% 3.38% 3.16% 4.55% 6.77% 8.24%*
Expense waiver/
reimbursement(c) 0.35%* 0.36% 0.40% 0.15% 0.11% 0.12% 0.22% 0.34%*
SUPPLEMENTAL DATA
Net assets, end
of period
(000 omitted) $2,683,453 $2,182,999 $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,
1997 1996 1995(A)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.05
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.05)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.54% 5.29% 5.31%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.45%* 0.45% 0.45%*
Net investment income 4.99%* 5.14% 5.63%*
Expense waiver/reimbursement(c) 0.10%* 0.11% 0.15%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $866,156 $702,274 $339,105
</TABLE>
* Computed on an annualized basis.
(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, 1997 (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 investment objective of the Fund is
to provide current income consistent with stability of principal.
The Fund offers two classes of shares: Institutional Shares and
Institutional Service Shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS -- The Fund's use of the amortized cost method to
value its portfolio securities is in accordance with Rule 2a-7 under the
Act.
REPURCHASE AGREEMENTS -- It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the Federal
Reserve Book Entry System, or to have segregated within the custodian bank's
vault, all securities held as collateral under repurchase agreement
transactions. Additionally, procedures have been established by the Fund to
monitor, on a daily basis, the market value of each repurchase agreement's
collateral to ensure that the value of collateral at least equals the
repurchase price to be paid under the repurchase agreement transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less
than the repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS -- Interest income and
expenses are accrued daily. Bond premium and discount, if applicable, are
amortized as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES -- It is the Fund's policy to comply with the provisions of
the Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER -- Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the 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, 1997, capital paid-in aggregated
$3,549,608,669. Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED
1997 JULY 31, 1996
INSTITUTIONAL SHARES SHARES SHARES
<S> <C> <C>
Shares sold 7,477,635,480 11,676,332,015
Shares issued to shareholders in payment of distributions declared 14,117,831 27,600,308
Shares redeemed (6,991,298,730) (11,447,449,600)
Net change resulting from Institutional Share transactions 500,454,581 256,482,723
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED
1997 JULY 31, 1996
INSTITUTIONAL SERVICE SHARES SHARES SHARES
<S> <C> <C>
Shares sold 2,589,132,347 2,861,012,423
Shares issued to shareholders in payment of distributions declared 6,826,328 11,836,843
Shares redeemed (2,432,077,501) (2,509,680,303)
Net change resulting from Institutional Service Share transactions 163,881,174 363,168,963
Net change resulting from share transactions 664,335,755 619,651,686
</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.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES -- FServ, through
its subsidiary, Federated Shareholder Services Company ("FSSC"), serves as
transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is
based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
GENERAL -- Certain of the Officers and Trustees of the Trust are Officers
and Directors or Trustees of the above companies.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
J. Christopher Donahue
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
J. Christopher Donahue
President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
J. Crilley Kelly
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective investors only
when preceded or accompanied by the fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
GOVERNMENT
OBLIGATIONS
FUND
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JANUARY 31, 1997
[Graphic]
Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
[Graphic]
Cusip 60934N104
Cusip 60934N807
1022001 (3/97)
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, 1997. First, you will find an investment review on the
short-term government market from the fund's portfolio manager. Following
the investment review are the fund's portfolio of investments and its
financial statements.
Over the six-month reporting period, dividends paid to shareholders of
Institutional Shares and Institutional Service Shares each totaled $0.02 per
share. At the end of the period, net assets reached $878.4 million.
Government Obligations Tax-Managed Fund helps your cash pursue daily
dividends, a high level of liquidity, and a stable net asset value of
$1.00.* In addition, the fund's portfolio of U.S. government securities is
managed so that dividends are exempt from state and local income taxes.**
Thank you for participating in the daily earning power of this high-quality,
tax-advantaged money market mutual fund. As always, we welcome your
questions, comments, or suggestions.
Sincerely,
[Graphic]
J. Christopher Donahue
President
March 15, 1997
* Although money market funds seek to maintain a stable net asset value of
$1.00 per share, there is no assurance that they will be able to do so. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
** Income may be subject to the federal alternative minimum tax. Unless
otherwise exempt, shareholders are required to pay federal income tax on
dividends.
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
fund invests in issues of the Student Loan Marketing Association, Federal
Farm Credit Bank System, Federal Home Loan Bank System, 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.
Over the six months ended January 31, 1997, the Federal Reserve Board (the
"Fed") stood pat in the face of economic growth that exceeded the 21/2% pace
thought to be the non-inflationary potential. Confronted with persistent
strength in the interest rate-sensitive sectors, the Fed stuck to its belief
that economic growth would return to a more moderate pace. Early in the
period, the market itself was not so sure, and movements in interest rates
proved to be rather volatile as expectations regarding the timing and extent
of the next policy move from the Fed swayed back and forth with each new
piece of economic data. When signs of the long-awaited slowdown finally
began to emerge, the market then fretted that it might not be occurring
quickly enough to prevent the need for the Fed to tighten in order to ward
off inflationary pressures. By the end of the reporting period, however, the
market calmed itself once more as growth in employment and housing moderated
and inflation remained tame. While the advance release for fourth quarter
Gross Domestic Product was a robust 4.7%, it was boosted by net exports and
a number of one-time factors, and the underlying fundamentals point to more
sedate growth in the first quarter. Overall, the federal funds target rate
remained unchanged over the period, at 5.25%, where it has been since late
January 1996.
Movements in interest rates early in the period reflected the market
uncertainty. The yield on the three-month Treasury bill peaked at 5.35% in
early September amid fears that the robust economy might spark inflation --
particularly in the face of tight labor market conditions. The yield then
plunged to 5% in late September/early October as signs of tempered growth
began to appear and relief finally took hold. The yield then rebounded to a
more realistic 5.15%, and traded within a fairly narrow range -- with the
exception of a technically-driven drop at year-end -- for the remainder of
the reporting period as the market embraced the idea that the Fed was likely
to be on hold indefinitely. Overall, the yields at the front end of the
Treasury yield curve ended the period 16 to 26 basis points lower,
reflecting the market's retreat from expectations of an imminent tightening
in monetary policy.
* An AAAm rating is 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. These ratings do not remove
market risks and are subject to change.
The fund remained targeted in a 35 to 45 day average maturity target range
throughout the reporting period, essentially a neutral positioning for the
fund, and moved its positioning within that range according to the relative
value opportunities offered in the market. Inflows of temporary cash late in
the reporting period caused the average maturity of the fund to fall
temporarily below the established target range. We maintained the fund's
barbelled structure, which continued to provide a competitive yield. About
25% of the fund is invested in U.S. government agency floating rate notes,
including a position in a Student Loan Marketing Association master note
which helps to provide liquidity for the fund. This floating rate position
is combined with short-term agency discount notes to comprise the short end
of the barbell. The fund combines this short position with Treasury and
agency securities with longer maturities of 6 to 12 months.
The Fed is likely to be fairly content with the present trend of moderating
growth and benign inflation, and, in our opinion, should not be moved to
change monetary policy in the near term. We expect that they will continue
to keep a watchful eye on potential inflationary pressures, however, in
light of continued tight labor market conditions. We would expect the front
end of the market to continue to be range-bound with a slight positive
slope, and we will likely maintain our current neutral positioning. 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, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
GOVERNMENT AGENCIES -- 105.3%
$ 3,000,000 Federal Farm Credit Bank Notes, 5.600%, 6/3/1997 $ 2,998,593
48,875,000 (a)Federal Farm Credit Bank, Discount Notes, 5.323% - 5.371%,
2/12/1997 - 5/20/1997 48,614,237
35,000,000 (b)Federal Farm Credit Bank, Floating Rate Notes, 5.050% - 5.300%,
2/4/1997 - 3/1/1997 34,976,412
6,600,000 Federal Home Loan Bank Notes, 5.460% - 5.710%,
11/18/1997 - 12/12/1997 6,597,042
396,970,000 (a)Federal Home Loan Bank, Discount Notes, 5.313% - 5.735%,
2/3/1997 - 7/10/1997 395,023,802
37,000,000 (b)Federal Home Loan Bank, Floating Rate Notes, 5.258% - 5.310%,
2/4/1997 - 3/4/1997 36,982,281
2,500,000 Student Loan Marketing Association, 5.620%, 6/30/1997 2,496,358
215,000,000 (a)Student Loan Marketing Association, Discount Notes,
5.342% - 5.569%, 2/3/1997 - 3/31/1997 214,484,119
83,565,000 (b)Student Loan Marketing Association, Floating Rate Notes,
5.345% - 5.550%, 2/4/1997 83,516,159
74,200,000 Student Loan Marketing Association, Floating Rate Master Notes,
5.325%, 2/4/1997 74,200,000
25,000,000 (a)Tennessee Valley Authority, Discount Notes, 5.302% - 5.363%,
2/11/1997 - 3/25/1997 24,872,212
TOTAL GOVERNMENT AGENCIES 924,761,215
</TABLE>
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
U.S. TREASURY OBLIGATIONS -- 4.2%
U.S. TREASURY BILLS -- 0.2%
$ 2,000,000 (a)5.666%, 8/21/1997 $ 1,940,147
U.S. TREASURY NOTES -- 4.0%
35,000,000 5.625% - 6.875%, 3/31/1997 - 9/30/1997 35,072,007
TOTAL U.S. TREASURY OBLIGATIONS 37,012,154
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 961,773,369
</TABLE>
(a) The issue shows the rate of discount at 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
($878,444,002) at January 31, 1997.
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 961,773,369
Cash 1,794,276
Income receivable 1,998,982
Deferred expenses 95,795
Total assets 965,662,422
LIABILITIES:
Payable for investments purchased $ 83,397,937
Income distribution payable 3,544,061
Accrued expenses 276,422
Total liabilities 87,218,420
NET ASSETS for 878,444,002 shares outstanding $ 878,444,002
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$315,529,090 / 315,529,090 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$562,914,912 / 562,914,912 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, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 17,864,699
EXPENSES:
Investment advisory fee $ 662,619
Administrative personnel and services fee 250,312
Custodian fees 46,000
Transfer and dividend disbursing agent fees and expenses 18,196
Directors'/Trustees' fees 1,472
Auditing fees 5,244
Legal fees 1,288
Portfolio accounting fees 62,891
Shareholder services fee -- Institutional Shares 293,129
Shareholder services fee -- Institutional Service Shares 535,144
Share registration costs 50,600
Printing and postage 15,088
Insurance premiums 3,312
Taxes 184
Miscellaneous 3,772
Total expenses 1,949,251
Waivers --
Waiver of investment advisory fee $ (443,805)
Waiver of shareholder services fee -- Institutional Shares (293,129)
Total waivers (736,934)
Net expenses 1,212,317
Net investment income $ 16,652,382
</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) YEAR ENDED
JANUARY 31, JULY 31,
1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 16,652,382 $ 17,665,003
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income
Institutional Shares (6,078,680) (6,666,528)
Institutional Service Shares (10,573,702) (10,998,475)
Change in net assets resulting from distributions to (16,652,382) (17,665,003)
shareholders
SHARE TRANSACTIONS --
Proceeds from sale of shares 1,412,244,415 1,393,097,071
Net asset value of shares issued to shareholders in
payment of
distributions declared 2,925,180 2,785,115
Cost of shares redeemed (1,068,666,091) (943,176,795)
Change in net assets resulting from share transactions 346,503,504 452,705,391
Change in net assets 346,503,504 452,705,391
NET ASSETS:
Beginning of period 531,940,498 79,235,107
End of period $ 878,444,002 $ 531,940,498
</TABLE>
(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, JULY 31,
1997 1996 1995(A)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.05 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.05) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.63% 5.50% 0.94%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.20%* 0.17% 0.20%*
Net investment income 5.18%* 5.28% 5.78%*
Expense waiver/reimbursement(c) 0.38%* 0.44% 0.65%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $315,529 $199,243 $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, JULY 31,
1997 1996 1995(A)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.05 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.05) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.51% 5.23% 0.95%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.45%* 0.42% 0.45%*
Net investment income 4.94%* 5.00% 5.55%*
Expense waiver/reimbursement(c) 0.13%* 0.19% 0.40%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $562,915 $332,698 $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, 1997 (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"). The financial statements of the
other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held. The investment objective of the Fund is to provide current
income consistent with stability of principal and liquidity.
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 over a period not to exceed five years from the Fund's
commencement date.
USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER -- Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the 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, 1997, capital paid-in aggregated
$878,444,002.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JANUARY 31, JULY 31,
1997 1996
INSTITUTIONAL SHARES SHARES SHARES
<S> <C> <C>
Shares sold 394,847,531 570,331,953
Shares issued to shareholders in payment of distributions declared 2,031,702 2,591,398
Shares redeemed (280,592,994) (376,750,642)
Net change resulting from Institutional Share transactions 116,286,239 196,172,709
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JANUARY 31, JULY 31,
1997 1996
INSTITUTIONAL SERVICE SHARES SHARES SHARES
<S> <C> <C>
Shares sold 1,017,396,884 822,765,118
Shares issued to shareholders in payment of distributions declared 893,478 193,717
Shares redeemed (788,073,097) (566,426,153)
Net change resulting from Institutional Service Share transactions 230,217,265 256,532,682
Net change resulting from share transactions 346,503,504 452,705,391
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE -- Federated Administrative Services, 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.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES -- FServ, through
its subsidiary, Federated Shareholder Services Company ("FSSC") serves as
transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is
based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES -- Organizational expenses of $26,061 were borne
initially by the Adviser. The Fund has agreed to reimburse the Adviser for
the organizational expenses during the five-year period following effective
date. For the period ended January 31, 1997, 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
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
J. Christopher Donahue
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
J. Christopher Donahue
President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
J. Crilley Kelly
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective investors only
when preceded or accompanied by the fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JANUARY 31, 1997
[Graphic]
Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 60934N856
Cusip 60934N849
G01611-01 (3/97)
[Graphic]
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, 1997.
First, you will find an investment review on the short-term market from the
fund's portfolio manager. Following the investment review are the fund's
portfolio of investments and its financial statements.
Over the six-month reporting period, dividends paid to shareholders of
Institutional Shares and Institutional Service Shares each totaled $0.03 per
share. At the end of the period, net assets stood at $4.5 billion.
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 period, the fund's portfolio was invested
across a wide range of high-quality, short-term money market securities,
including commercial paper (44.8%), variable rate instruments (25.6%),
certificates of deposit (9.7%), corporate notes (6.8%), and repurchase
agreements (5.4%).
Thank you for your confidence in the daily earning power of Prime
Obligations Fund. As always, your questions and comments are welcome.
Sincerely,
[Graphic]
J. Christopher Donahue
President
March 15, 1997
* Although money market funds seek to maintain a stable net asset value of
$1.00 per share, there is no assurance that they will be able to do so. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
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, 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 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.
U.S. economic growth has slowed in a nearly ideal fashion. Labor markets are
still tight, but monthly payroll gains have downshifted from 233,000 per
month in the first half of 1996 to 171,000 over the second half. Home
building has slowed as well. Offsetting this consumer slowdown, however, is
a strengthening manufacturing sector. The National Association of Purchasing
Managers Index* has decreased to 52.0% for January, but industrial
production and capacity utilization remain high. So while the economy
remains mixed, overall it appears to be advancing at a moderate and
sustainable pace.
The lingering concern is that tight labor markets and gently rising wage
pressures will prove inflationary. To date, however, price pressures have
been evident only in the food and energy sectors. Elsewhere in the economy
systematic price pressures are largely absent. The consumer price index has
risen at an annualized rate of just 2.9% over the past six months while the
producer price index increased by 3.5% for the same period.
Thirty-day commercial paper started the period at 5.39% on August 1, 1996,
and declined very modestly to 5.35% on January 31, 1997. This lack of
movement reflects the 5.25% federal funds target maintained by the Federal
Reserve Board (the "Fed") for the entire six-month time period.
The money market yield curve flattened substantially throughout the time
period. One month commercial paper rates decreased 4 basis points while the
six-month rates dropped 22 basis points, reflecting the complacent market
attitude toward slow growth and low inflation.
The target average maturity range for the fund remained in the 35-45 day
target range for the entire period, reflecting a neutral position regarding
Fed policy. In structuring the fund, there is continued emphasis placed on
positioning 30-35% of the fund's assets in variable rate demand notes and
accomplishing a modest barbell structure.
During the six months ended January 31, 1997, the net assets of the fund
increased from $4,329.6 to $4,537.6 million while the 7-day net yield
increased from 5.25% to 5.28%** for Institutional Shares and from 5.00% to
5.03%** for Institutional Service Shares. The effective average maturity of
the fund on January 31, 1997 was 43 days.
* The National Association of Purchasing Managers Index is a diffusion index
that measures the economic activity of the largest manufacturers in the
United States.
** Performance quoted represents past performance and is not indicative of
future results. Yield will vary.
PRIME OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
BANK NOTE -- 0.2%
BANKING -- 0.2%
$ 10,000,000 Harris Trust & Savings Bank, Chicago, 5.500%, 3/26/1997 $ 9,999,164
CERTIFICATES OF DEPOSIT -- 9.7%
BANKING -- 9.7%
135,000,000 Abbey National Treasury Services, PLC, (Guaranteed by Abbey
National Bank PLC, London), 5.410% - 5.450%, 5/27/1997 134,992,566
25,000,000 Australia & New Zealand Banking Group, Melbourne,
5.430%, 5/6/1997 25,000,749
23,000,000 Bank of Scotland, Edinburgh, 5.480%, 6/5/1997 22,995,631
150,000,000 Banque Nationale de Paris, 5.375%, 2/27/1997 150,000,534
21,000,000 Dresdner Bank AG, Frankfurt, 5.026%, 2/26/1997 20,999,435
61,500,000 Mellon Bank N.A., Pittsburgh, 5.410% - 5.620%, 2/18/1997 - 5/14/1997 61,500,000
23,000,000 Svenska Handelsbanken, Inc., (Guaranteed by Svenska
Handelsbanken, Stockholm), 5.420%, 5/27/1997 23,000,598
TOTAL CERTIFICATES OF DEPOSIT 438,489,513
(A)COMMERCIAL PAPER -- 44.8%
BANKING -- 15.8%
5,000,000 ABN AMRO Bank N.V., Amsterdam, 5.794%, 3/6/1997 4,974,196
46,000,000 Abbey National N.A. Corp., (Guaranteed by Abbey National Bank
PLC, London), 5.402% - 5.626%, 3/11/1997 - 4/2/1997 45,660,916
114,500,000 Bank of Nova Scotia, Toronto, 5.393% - 5.434%, 3/6/1997 - 3/17/1997 113,860,261
6,680,000 Benedictine Health System, (Lasalle National Bank, Chicago LOC),
5.578%, 4/14/1997 6,606,520
7,900,000 City of Cleveland, (Union Bank of Switzerland, Zurich LOC,
Credit Suisse, Zurich LOC), 5.560%, 2/4/1997 7,900,000
35,000,000 Commerzbank U.S. Finance, Inc., (Guaranteed by Commerzbank AG,
Frankfurt), 5.709%, 3/18/1997 34,757,187
50,000,000 Commonwealth Bank of Australia, Sydney, 5.560%, 2/28/1997 49,797,125
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)COMMERCIAL PAPER -- CONTINUED
BANKING -- CONTINUED
$ 25,000,000 Den Danske Corp., Inc., (Guaranteed by Den Danske Bank A/S),
5.530%, 7/17/1997 $ 24,379,806
75,000,000 Deutsche Bank Financial, Inc., (Guaranteed by Deutsche Bank, AG),
5.404%, 3/12/1997 74,566,938
108,000,000 National Australia Funding, Inc., (Guaranteed by National Australia
Bank, Ltd., Melbourne), 5.423% - 5.551%, 2/4/1997 - 4/17/1997 107,573,621
97,540,000 Societe Generale North America, Inc., (Guaranteed by Societe
Generale, Paris), 5.500% - 5.708%, 2/7/1997 - 4/9/1997 96,759,912
152,000,000 Svenska Handelsbanken, Inc., (Guaranteed by Svenska
Handelsbanken, Stockholm), 5.424% - 5.531%, 2/10/1997 - 7/25/1997 149,777,223
Total 716,613,705
BROKERAGE -- 4.8%
1,000,000 Goldman Sachs Group, L.P., 5.583%, 2/3/1997 999,690
218,000,000 Merrill Lynch & Co., Inc., 5.371% - 5.423%, 2/11/1997 - 4/24/1997 216,493,468
Total 217,493,158
FINANCE - AUTOMOTIVE -- 1.8%
80,000,000 Ford Motor Credit Corp., 5.427% - 5.428%, 3/13/1997 - 3/14/1997 79,521,200
FINANCE - COMMERCIAL -- 13.1%
19,000,000 Alpha Finance Corp., Ltd., 5.383% - 5.389%, 2/13/1997 18,966,338
232,000,000 Asset Securitization Cooperative Corp., 5.408% - 5.438%,
3/5/1997 - 4/25/1997 229,954,639
54,700,000 Beta Finance, Inc., 5.402% - 5.775%, 3/3/1997 - 6/13/1997 54,267,028
70,000,000 CIT Group Holdings, Inc., 5.381% - 5.523%, 2/3/1997 - 2/11/1997 69,943,483
51,100,000 CXC, Inc., 5.382% - 5.435%, 2/12/1997 - 4/21/1997 50,763,049
3,200,000 Corporate Asset Funding Co., Inc. (CAFCO), 5.542%, 2/6/1997 3,197,604
55,000,000 General Electric Capital Corp., 5.508% - 5.784%, 3/6/1997 - 4/10/1997 54,468,019
70,231,000 Greenwich Funding Corp., 5.384% - 5.519%, 2/28/1997 - 4/22/1997 69,609,488
44,950,000 PREFCO-Preferred Receivables Funding Co., 5.421% - 5.783%,
2/28/1997 - 3/11/1997 44,715,358
Total 595,885,006
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)COMMERCIAL PAPER -- CONTINUED
FINANCE - RETAIL -- 7.4%
$ 35,000,000 American Express Credit Corp., 5.434%, 6/10/1997 $ 34,336,546
38,100,000 American General Finance Corp., 5.503%, 2/3/1997 38,088,358
90,000,000 Associates Corp. of North America, 5.380% - 5.503%,
2/3/1997 - 2/21/1997 89,919,611
50,000,000 Beneficial Corp., 5.423%, 3/7/1997 49,748,778
59,000,000 McKenna Triangle National Corp., 5.377% - 5.446%,
2/25/1997 - 4/17/1997 58,634,583
51,000,000 New Center Asset Trust, A1+/P1 Series, 5.527% - 5.581%,
2/7/1997 - 3/25/1997 50,827,730
15,000,000 Norwest Financial, Inc., 5.396%, 2/18/1997 14,962,317
Total 336,517,923
INSURANCE -- 0.2%
10,775,000 AIG Funding, Inc., (Guaranteed by AIG), 5.472%, 2/3/1997 10,771,726
OIL & OIL FINANCE -- 1.1%
10,000,000 Chevron Transport Corp., (Guaranteed by Chevron Corp.), 5.434%,
4/11/1997 9,897,267
20,000,000 Chevron U.K. Investment PLC, (Guaranteed by Chevron Corp.),
5.433%, 4/10/1997 19,797,511
20,000,000 Koch Industries, Inc., 5.583%, 2/3/1997 19,993,800
Total 49,688,578
PHARMACEUTICALS AND HEALTH CARE -- 0.6%
26,000,000 Glaxo Wellcome PLC, 5.398%, 2/5/1997 25,984,631
TOTAL COMMERCIAL PAPER 2,032,475,927
GOVERNMENT AGENCIES -- 0.1%
FEDERAL HOME LOAN BANK NOTE -- 0.1%
4,000,000 5.530%, 3/24/1997 4,000,115
SHORT-TERM NOTES -- 6.8%
BANKING -- 0.7%
34,000,000 (b)SALTS III Cayman Island Corp., (Bankers Trust International,
PLC Swap Agreement), 5.788%, 7/23/1997 34,000,000
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM NOTES -- CONTINUED
BROKERAGE -- 2.2%
$ 100,000,000 (b)Goldman Sachs Group, L.P., 5.563%, 4/28/1997 $ 100,000,000
FINANCE - AUTOMOTIVE -- 1.7%
10,000,000 Ford Credit Auto Lease Trust 1996-1, 5.451%, 11/15/1997 9,999,213
2,232,252 Nationsbank Auto Owner Trust 1996-A, 5.776%, 8/15/1997 2,233,271
6,757,373 Olympic Automobile Receivables Trust 1996-C, 5.616%, 9/15/1997 6,757,373
5,836,796 Olympic Automobile Receivables Trust 1996-D, 5.430%, 12/15/1997 5,836,796
3,567,989 WFS Financial Owner Trust 1996-C, 5.630%, 9/20/1997 3,567,989
46,600,000 WFS Financial Owner Trust 1996-D, 5.500%, 1/16/1998 46,600,000
Total 74,994,642
FINANCE - COMMERCIAL -- 0.5%
10,000,000 Beta Finance, Inc., 5.540%, 3/27/1997 10,000,000
15,000,000 Cargill Lease Receivables Trust 1996-A, 5.613%, 12/20/1997 15,000,000
Total 25,000,000
FINANCE - EQUIPMENT -- 1.6%
61,018,080 Capita Equipment Receivables Trust 1996-1, 5.600%, 10/15/1997 61,018,116
1,469,814 Navistar Financial 1996-A Owner Trust, 5.250%, 6/15/1997 1,469,612
11,390,934 Navistar Financial 1996-B Owner Trust, 5.490%, 11/20/1997 11,390,934
Total 73,878,662
FINANCE - RETAIL -- 0.1%
3,000,000 Beneficial Corp., 9.350%, 2/3/1997 3,000,530
TOTAL SHORT-TERM NOTES 310,873,834
(C)VARIABLE RATE INSTRUMENTS -- 25.6%
BANKING -- 18.8%
6,315,000 500 South Front St. L.P., Series B, (Huntington National Bank,
Columbus, OH LOC), 5.530%, 2/6/1997 6,315,000
6,100,000 Abbott Foods, Series 1996, (Huntington National Bank, Columbus,
OH LOC), 5.530%, 2/6/1997 6,100,000
5,580,000 Alabama State IDA, (Series 1994) Miltope Project, (First Alabama
Bank, Birmingham LOC), 5.530%, 2/6/1997 5,580,000
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)VARIABLE RATE INSTRUMENTS -- CONTINUED
BANKING -- CONTINUED
$ 9,015,000 Alabama State IDA, (Wellborn Cabinet, Inc.), Tax Revenue Bonds,
(Amsouth Bank N.A., Birmingham LOC), 5.530%, 2/5/1997 $ 9,015,000
8,285,000 Alexandria Executive Club L.P., (Huntington National Bank,
Columbus, OH LOC), 5.530%, 2/6/1997 8,285,000
8,800,000 Arrow N.A., Inc., (Huntington National Bank, Columbus, OH LOC),
5.530%, 2/6/1997 8,800,000
7,000,000 Asset Holdings Corp. VII, (First Bank NA, Minneapolis LOC),
5.530%, 2/6/1997 7,000,000
3,500,000 Asset Holdings V, (Bayerische Vereinsbank AG, Munich LOC),
5.530%, 2/6/1997 3,500,000
16,500,000 Association of American Medical Colleges, (Guaranteed by Chase
Manhattan Bank N.A., New York), 5.530%, 2/5/1997 16,500,000
15,000,000 Australia & New Zealand Banking Group, Melbourne, 5.360%,
2/4/1997 14,997,283
5,000,000 Bank One, Milwaukee, WI N.A., 5.270%, 2/4/1997 4,997,506
4,000,000 Bardstown City, KY, (RJ Tower Project), (Series 1995), (Comerica, Inc.
LOC), 5.500%, 2/6/1997 4,000,000
16,900,000 Beverly California Corp., (PNC Bank, N.A. LOC), 5.492%, 2/10/1997 16,900,000
1,627,790 Bowling Green Manor L.P., (Huntington National Bank, Columbus,
OH LOC), 5.530%, 2/6/1997 1,627,790
17,400,000 CMH Funding, (Huntington National Bank, Columbus, OH LOC),
5.688%, 7/3/1997 17,400,000
7,008,000 Capital One Funding Corp., Series 1994-A, (Bank One, Columbus,
N.A. LOC), 5.450%, 2/6/1997 7,008,000
22,496,000 Capital One Funding Corp., Series 1995-A, (Bank One,
Indianapolis, IN LOC), 5.450%, 2/6/1997 22,496,000
23,630,000 Capital One Funding Corp., Series 1995-B, (Bank One, Kentucky,
Louisville LOC), 5.450%, 2/6/1997 23,630,000
19,932,000 Capital One Funding Corp., Series 1994-C, (Bank One, Cleveland, N.A.
LOC), 5.450%, 2/6/1997 19,932,000
9,288,000 Capital One Funding Corp., Series 1994-D, (Bank One, Kentucky,
Louisville LOC), 5.450%, 2/6/1997 9,288,000
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)VARIABLE RATE INSTRUMENTS -- CONTINUED
BANKING -- CONTINUED
$ 22,174,000 Capital One Funding Corp., Series 1995-F, (Bank One, Cleveland, N.A.
LOC), 5.450%, 2/6/1997 $ 22,174,000
11,800,000 Cloquet, MN, Series 1996-B Potlach Corp., (Credit Suisse, Zurich LOC),
5.550%, 2/5/1997 11,800,000
1,042,337 Clyde Manor L.P., (Huntington National Bank, Columbus, OH LOC),
5.530%, 2/6/1997 1,042,337
3,200,000 Columbia County, GA Development Authority, Series 1993, (SunTrust
Banks, Inc. LOC), 5.450%, 2/5/1997 3,200,000
3,875,000 Eastwinds Investment, Ltd., (Huntington National Bank, Columbus,
OH LOC), 5.530%, 2/6/1997 3,875,000
7,015,000 Fort Craig Limited Partnership, (Huntington National Bank,
Columbus, OH LOC), 5.530%, 2/6/1997 7,015,000
4,600,000 G.M.H. Enterprises, Inc., (Series 1995), (National City Bank,
Cleveland, OH LOC), 5.550%, 2/6/1997 4,600,000
3,260,000 Gerken Materials, Inc., (Huntington National Bank,
Columbus, OH LOC), 5.530%, 2/6/1997 3,260,000
2,350,000 Grote Family L.P., (Huntington National Bank, Columbus, OH LOC),
5.530%, 2/6/1997 2,350,000
12,165,000 Hunt Club Apartments, Inc., (Huntington National Bank,
Columbus, OH LOC), 5.530%, 2/5/1997 12,165,000
900,000 Illinois Development Finance Authority, Series 1996B Nimlok Co.,
Project, (Bank One, Chicago LOC), 5.680%, 2/6/1997 900,000
245,000 Kenny, Donald R. and Cheryl A., (Huntington National Bank,
Columbus, OH LOC), 5.530%, 2/6/1997 245,000
7,000,000 Kenny, Donald R. and Cheryl A., series 1995-A, (National City Bank,
Columbus, OH LOC), 5.530%, 2/6/1997 7,000,000
7,960,000 Kenny, Donald R. and Cheryl A., series 1995-B, (Huntington National
Bank, Columbus, OH LOC), 5.530%, 2/6/1997 7,960,000
157,000,000 Liquid Asset Backed Securities Trust, Series 1996-3, (Westdeutsche
Landesbank Girozentrale Swap Agreement), 5.442%, 2/18/1997 157,000,000
3,500,000 Manatee County, FL, IDRB Series 1996-A CFI Manufacturing Project,
(Barnett Bank, N.A. LOC), 5.688%, 2/6/1997 3,500,000
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)VARIABLE RATE INSTRUMENTS -- CONTINUED
BANKING -- CONTINUED
$ 2,805,000 Midwest Funding Corp., Series 1991 A Class A-1, (Bank One,
Columbus, N.A. LOC), 5.450%, 2/6/1997 $ 2,805,000
2,528,000 Midwest Funding Corp., Series 1991 B, (Bank One, Columbus,
N.A. LOC), 5.450%, 2/6/1997 2,528,000
3,931,000 Midwest Funding Corp., Series 1991-C, (Bank One, Columbus,
N.A. LOC), 5.450%, 2/6/1997 3,931,000
4,032,000 Midwest Funding Corp., Series 1992-A, (Bank One, Columbus,
N.A. LOC), 5.450%, 2/6/1997 4,032,000
1,548,000 Midwest Funding Corp., Series 1992-B, (Bank One, Columbus,
N.A. LOC), 5.450%, 2/6/1997 1,548,000
3,662,000 Midwest Funding Corp., Series 1992-C, (Bank One, Columbus,
N.A. LOC), 5.450%, 2/6/1997 3,662,000
12,600,000 Mississippi Business Finance Corp., Choctaw Foods, Inc., (Rabobank
Nederland, Utrecht LOC), 5.450%, 2/5/1997 12,600,000
8,130,000 Mississippi Business Finance Corp., Metalloy Project, (Comerica Bank,
Detroit, MI LOC), 5.530%, 2/6/1997 8,130,000
12,000,000 Mississippi Business Finance Corp., Series 1994, (Wachovia Bank of
Georgia N.A., Atlanta LOC), 5.530%, 2/5/1997 12,000,000
2,000,000 Mississippi Business Finance Corp., Series 1995 Plantation Pointe,
LP Project, (Amsouth Bank N.A., Birmingham LOC), 5.530%, 2/6/1997 2,000,000
5,000,000 NUFUNDING, Inc., Series 1996, (Lasalle National Bank, Chicago LOC),
5.538%, 2/5/1997 5,000,000
3,000,000 Newbury Industrial Park, Series 1996, (Huntington National Bank,
Columbus, OH LOC), 5.530%, 2/6/1997 3,000,000
2,860,000 Nova University, Inc. Lease Revenue Bonds, Series 1993 Miami
Dolphins Training Facility, (Sun Bank/South Florida LOC), 5.450%,
2/5/1997 2,860,000
2,310,000 Orangeburg Convalescent Care Center, Inc., Series A 1995, (PNC Bank,
Kentucky LOC), 5.516%, 2/10/1997 2,310,000
4,370,000 Primex Funding Corp., (Bank One, Indianapolis, IN LOC), 5.450%,
2/6/1997 4,370,000
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)VARIABLE RATE INSTRUMENTS -- CONTINUED
BANKING -- CONTINUED
$ 4,000,000 REAL I Funding Corp., Casto Realty Investments Series 1996,
(Huntington National Bank, Columbus, OH LOC), 5.530%, 2/6/1997 $ 4,000,000
2,000,000 Richmond, IN, Holland Colors America Inc., (Bank One,
Indianapolis, IN LOC), 5.530%, 2/6/1997 2,000,000
10,380,000 Roby Company Ltd. Partnership, (Huntington National Bank,
Columbus, OH LOC), 5.530%, 2/6/1997 10,380,000
12,750,000 Rooker, J.W., (Wachovia Bank of Georgia N.A., Atlanta LOC), 5.530%,
2/5/1997 12,750,000
6,000,000 SMM Trust, Series 1996-B, (Morgan Guaranty Trust Co., New York
Swap Agreement), 5.550%, 3/1/1997 6,000,000
105,000,000 SMM Trust, Series 1996-I, (Morgan Guaranty Trust Co., New York
Swap Agreement), 5.488%, 3/1/1997 105,000,000
25,500,000 SMM Trust, Series 1996-L, (Morgan Guaranty Trust Co., New York
Swap Agreement), 5.472%, 2/18/1997 25,500,000
35,000,000 SMM Trust, Series 1996-V, (Morgan Guaranty Trust Co., New York
Swap Agreement), 5.581%, 3/26/1997 35,000,000
250,000 Scranton Times, L.P., (PNC Bank, N.A. LOC), 5.492%, 2/10/1997 250,000
6,205,000 Shenandoah Partners L.P., (Huntington National Bank,
Columbus, OH LOC), 5.530%, 2/6/1997 6,205,000
3,750,000 Spitzer Group, Series 1996A, (Bank One, Cleveland, N.A. LOC),
5.530%, 2/6/1997 3,750,000
2,000,000 Spitzer Group, Series 1996B, (Bank One, Cleveland, N.A. LOC),
5.530%, 2/6/1997 2,000,000
5,315,000 Springfield Limited Series A, (Union Bank of Switzerland,
Zurich LOC), 5.450%, 2/6/1997 5,315,000
47,640,000 Terry Griffin Gate Partners, Ltd., Series 1995, (Bank One, Kentucky,
Louisville LOC), 5.530%, 2/5/1997 47,640,000
6,000,000 Van Dyne Crotty Co., Series 1996, (Huntington National Bank,
Columbus, OH LOC), 5.530%, 2/6/1997 6,000,000
3,076,000 Vista Funding Corp., (Bank One, Akron, N.A. LOC), 5.450%, 2/6/1997 3,076,000
4,272,000 Vista Funding Corp., (Series 1994-A), (Fifth Third Bank of
Northwestern OH LOC), 5.530%, 2/6/1997 4,272,000
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)VARIABLE RATE INSTRUMENTS -- CONTINUED
BANKING -- CONTINUED
$ 11,253,000 Vista Funding Corp., (Series 1995-B), (Fifth Third Bank of
Northwestern OH LOC), 5.530%, 2/6/1997 $ 11,253,000
10,164,000 Vista Funding Corp., (Series 1995-D), (Fifth Third Bank of
Northwestern OH LOC), 5.530%, 2/6/1997 10,164,000
9,024,000 Vista Funding Corp., (Series 1995-E), (Bank One, Dayton, N.A. LOC),
5.530%, 2/6/1997 9,024,000
5,555,000 Vulcan, Inc., (Amsouth Bank N.A., Birmingham LOC), 5.530%,
2/6/1997 5,555,000
991,431 Wauseon Manor II L.P., (Huntington National Bank, Columbus, OH
LOC), 5.530%, 2/6/1997 991,431
3,775,000 Wexner Heritage House, (Huntington National Bank, Columbus, OH
LOC), 5.530%, 2/6/1997 3,775,000
2,385,000 YMCA of Central OH, (Huntington National Bank, Columbus, OH
LOC), 5.530%, 2/6/1997 2,385,000
Total 854,519,347
ELECTRICAL EQUIPMENT -- 0.5%
22,613,059 Northwest Airlines, Inc., (Guaranteed by General Electric Co.),
5.468%, 2/10/1997 22,613,059
FINANCE - RETAIL -- 0.8%
37,000,000 Carco Auto Loan Master Trust 1993-2, (Series 1993-2 Class A1),
5.655%, 2/18/1997 37,000,000
INSURANCE -- 2.9%
30,000,000 (b)Peoples Security Life Insurance, 6.110%, 3/1/1997 30,000,000
10,000,000 (b)SunAmerica Life Insurance Co., 5.538%, 3/1/1997 10,000,000
89,000,000 Transamerica Occidental Life Insurance Company, 5.504%, 3/1/1997 89,000,000
Total 129,000,000
SHORT-TERM MUNICIPAL -- 0.9%
10,000,000 Colorado Health Facilities Authority, National Benevolent Association
Series 1996C, (Kredietbank N.V., Brussels LOC), 5.720%, 11/1/1997 9,996,122
25,700,000 (b)Columbus, OH, 5.655%, 2/6/1997 25,700,000
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)VARIABLE RATE INSTRUMENTS -- CONTINUED
SHORT-TERM MUNICIPAL -- CONTINUED
$ 3,000,000 White Bear Lake, MN City of, (Series 1993), (Norwest Bank Minnesota,
Minneapolis LOC), 5.780%, 2/4/1997 $ 3,000,000
Total 38,696,122
SOVEREIGN GOVERNMENT -- 1.7%
78,000,000 (b)Short-Term Asset Corp., Secured Class F-1 Bonds, (GTD. by European
Bank for Reconstructions and Development), 5.442%, 2/13/1997 78,000,000
TOTAL VARIABLE RATE INSTRUMENTS 1,159,828,528
TIME DEPOSITS -- 6.4%
BANKING -- 6.4%
150,000,000 Bank of Tokyo-Mitsubishi Ltd., 5.625%, 2/3/1997 150,000,000
100,000,000 Deutsche Bank Cayman Island, 5.625%, 2/3/1997 100,000,000
40,000,000 Mellon Bank N.A., Pittsburgh, 5.625%, 2/3/1997 40,000,000
TOTAL TIME DEPOSITS 290,000,000
U.S. TREASURY -- 1.1%
U.S. TREASURY NOTES -- 1.1%
50,000,000 6.875%, 3/31/1997 50,104,198
(D)REPURCHASE AGREEMENTS -- 5.4%
117,500,000 Bear, Stearns and Co., 5.580%, dated 1/31/1997, due 2/3/1997 117,500,000
37,650,000 Daiwa Securities America, Inc., 5.580%, dated 1/31/1997,
due 2/3/1997 37,650,000
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(D)REPURCHASE AGREEMENTS -- CONTINUED
$ 25,000,000 State Street Bank and Trust Co., 5.550%, dated 1/31/1997,
due 2/3/1997 $ 25,000,000
66,500,000 UBS Securities, Inc., 5.530%, dated 1/31/1997, due 2/3/1997 66,500,000
TOTAL REPURCHASE AGREEMENTS 246,650,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(E) $ 4,542,421,279
</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) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At January 31, 1997, these securities
amounted to $277,700,000 which represents 6.1% of net assets.
(c) Current rate and next reset date shown.
(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
($4,537,585,647) at January 31, 1997.
The following acronyms are used throughout this portfolio:
IDA -- Industrial Development Authority
IDRB -- Industrial Development Revenue Bond
LP -- Limited Partnership
LOC -- Letter of Credit
PLC -- Public Limited Company
(See Notes which are an integral part of the Financial Statements)
PRIME OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 4,542,421,279
Cash 130,878
Income receivable 16,508,880
Receivable for shares sold 87
Total assets 4,559,061,124
LIABILITIES:
Income distribution payable $ 21,010,077
Accrued expenses 465,400
Total liabilities 21,475,477
NET ASSETS for 4,537,585,647 shares outstanding $ 4,537,585,647
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$3,071,617,407 / 3,071,617,407 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$1,465,968,240 / 1,465,968,240 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, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 128,563,533
EXPENSES:
Investment advisory fee $ 4,674,833
Administrative personnel and services fee 1,766,081
Custodian fees 206,964
Transfer and dividend disbursing agent fees and expenses 142,449
Directors'/Trustees' fees 17,208
Auditing fees 6,992
Legal fees 20,792
Portfolio accounting fees 182,625
Shareholder services fee -- Institutional Shares 4,055,623
Shareholder services fee -- Institutional Service Shares 1,787,918
Share registration costs 144,124
Printing and postage 10,120
Insurance premiums 18,356
Taxes 48,024
Miscellaneous 17,664
Total expenses 13,099,773
Waivers --
Waiver of investment advisory fee $ (2,478,553)
Waiver of shareholder services fee -- Institutional Shares (4,055,623)
Total waivers (6,534,176)
Net expenses 6,565,597
Net investment income $ 121,997,936
</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) YEAR ENDED
JANUARY 31, JULY 31,
1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 121,997,936 $ 201,522,995
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income
Institutional Shares (85,896,292) (161,912,538)
Institutional Service Shares (36,101,644) (39,610,457)
Change in net assets resulting from distributions
to shareholders (121,997,936) (201,522,995)
SHARE TRANSACTIONS --
Proceeds from sale of shares 28,139,712,019 39,825,611,659
Net asset value of shares issued to shareholders in payment
of
distributions declared 28,484,157 61,968,216
Cost of shares redeemed (27,960,231,699) (38,516,710,023)
Change in net assets resulting from share transactions 207,964,477 1,370,869,852
Change in net assets 207,964,477 1,370,869,852
NET ASSETS:
Beginning of period 4,329,621,170 2,958,751,318
End of period $ 4,537,585,647 $ 4,329,621,170
</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,
1997 1996 1995 1994 1993 1992 1991 1990(A)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT
OPERATIONS
Net investment
income 0.03 0.05 0.06 0.03 0.03 0.05 0.07 0.03
LESS DISTRIBUTIONS
Distributions
from net
investment income (0.03) (0.05) (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 $ 1.00
TOTAL RETURN(B) 2.68% 5.58% 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% 0.20%*
Net investment
income 5.30%* 5.43% 5.60% 3.47% 3.20% 4.53% 6.54% 8.21%*
Expense waiver/
reimbursement(c) 0.36%* 0.36% 0.38% 0.14% 0.09% 0.10% 0.24% 0.68%*
SUPPLEMENTAL DATA
Net assets, end
of period
(000 omitted) $3,071,617 $3,032,602 $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,
1997 1996 1995 1994(A)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.05 0.003
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.05) (0.003)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.56% 5.32% 5.38% 0.30%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.45%* 0.45% 0.45% 0.34%*
Net investment income 5.05%* 5.13% 5.66% 4.68%*
Expense waiver/reimbursement(c) 0.11%* 0.11% 0.13% 0.14%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $1,465,968 $1,297,019 $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, 1997 (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"). The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held.
The Fund offers two classes of shares: Institutional Shares and
Institutional Service Shares. The investment objective of the Fund is to
provide current income consistent with stability of principal.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS -- The Fund's use of the amortized cost method to
value its portfolio securities is in accordance with Rule 2a-7 under the
Act.
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 Trustees. The Fund will not
incur any registration costs upon such resales. Restricted securities are
valued at amortized cost in accordance with Rule 2a-7 under the Act.
Additional information on each restricted security held at January 31, 1997
is as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Columbus, Ohio 1/30/1997 $ 25,700,000
Goldman Sachs Group, L.P. 1/27/1997 100,000,000
Peoples Security Life Insurance 7/8/1996 30,000,000
SALTS III Cayman Island Corp. 1/23/1997 34,000,000
Short Term Asset Corp., Secured Class F-1 Bonds 5/7/1997 78,000,000
SunAmerica Life Insurance Co. 5/28/1996 10,000,000
</TABLE>
USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER -- Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value) for
each class of shares. At January 31, 1997, capital paid-in aggregated
$4,537,585,647.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED
1997 JULY 31, 1996
INSTITUTIONAL SHARES SHARES SHARES
<S> <C> <C>
Shares sold 21,280,404,578 29,766,228,647
Shares issued to shareholders in payment of distributions declared 19,298,916 45,035,407
Shares redeemed (21,260,688,094) (29,236,459,220)
Net change resulting from Institutional Share transactions 39,015,400 574,804,834
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED
1997 JULY 31, 1996
INSTITUTIONAL SERVICE SHARES SHARES SHARES
<S> <C> <C>
Shares sold 6,859,307,441 10,059,383,012
Shares issued to shareholders in payment of distributions declared 9,185,241 16,932,809
Shares redeemed (6,699,543,605) (9,280,250,803)
Net change resulting from Institutional Service Share transactions 168,949,077 796,065,018
Net change resulting from share transactions 207,964,477 1,370,869,852
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE -- Federated Management, the Fund's investment
adviser (the "Adviser"), receives for its services an annual investment
advisory fee equal to 0.20% 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.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES -- FServ, through
its subsidiary, Federated Shareholder Services Company ("FSSC"), serves as
transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is
based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
GENERAL -- Certain of the Officers and Trustees of the Trust are Officers
and Directors or Trustees of the above companies.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
J. Christopher Donahue
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
J. Christopher Donahue
President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
J. Crilley Kelly
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective investors only
when preceded or accompanied by the fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
PRIME OBLIGATIONS FUND
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JANUARY 31, 1997
[Graphic]
Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 60934N203
Cusip 60934N708
1022002 (3/97)
[Graphic]
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, 1997.
First, you will find an investment review on the short-term tax-free market
from the fund's portfolio manager. Following the investment review are the
fund's portfolio of municipal bond investments and its financial statements.
Over the six-month reporting period, tax-free dividends paid to shareholders
of Institutional Shares and Institutional Service Shares each totaled $0.02
per share. At the end of the period, net assets surpassed the $2 billion
mark.
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.
Thank you for your confidence in the daily earning power of Tax-Free
Obligations Fund. As always, your questions and comments are welcome.
Sincerely,
[Graphic]
J. Christopher Donahue
President
March 15, 1997
* Income may be subject to the federal alternative minimum tax and state and
local taxes.
** Although money market funds seek to maintain a stable net asset value of
$1.00 per share, there is no assurance that they will be able to do so. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
Tax-Free Obligations Fund invests in high-quality, short-term tax-exempt
debt securities and seeks to maintain a stable net asset value of $1.00. The
fund is rated AAA by Fitch Investors Service.* For the six-month reporting
period ended January 31, 1997, the fund's net assets increased from $1.921
billion to $2.125 billion. As of January 31, 1997, the effective average
maturity was 45 days.
Although the Federal Reserve Board (the "Fed") maintained a constant
monetary policy over the semi-annual period ended January 31, 1997, the
interest rate outlook was somewhat uncertain. The reason for the uncertainty
was shifting sentiment regarding the strength of the U.S. economy. The
overriding concern beginning in the third quarter of 1996 was the undue
strength of the economy. The Fed was worried about rising consumer spending,
gains in employment, and higher consumer prices. The economic strength
initially appeared during the latter part of the second quarter of 1996 and
influenced the interest rate environment through mid-July. As signs of a
more benign economy emerged in early August, the market retreated from the
view that the Fed would intervene. In their August meeting, the Fed cited an
economic expansion that had "moderated somewhat" from the growth levels that
were earlier influencing the economy. However, market expectations became
inflationary again as signs of a tight labor market appeared. The
inflationary concerns in the labor markets subsided in mid-September, and
rates retreated until early December. From mid-December until the end of the
period, rates rose steadily to reach a four-month high by the end of
January.
Yields on short-term U.S. government securities reflected the volatile mood
in the markets. By mid-August, the yield on the one-year Treasury bill index
had fallen to the 5.60% level and rose to the 5.90's by September. Again the
pattern repeated with the index falling to 5.40% by November 1996, and
rising steadily to 5.62% by the end of January. The Bond Buyer One-Year Note
Index** (the "Bond Buyer Index"), a proxy for the yields of one-year
municipal notes, exhibited roughly the same behavior as the treasury index.
The Bond Buyer Index began August at 3.92%, and ended January at 3.62%.
During the period, the Bond Buyer Index averaged 66% of its treasury
counterpart.
Over the course of the period, yields of tax exempt variable rate demand
notes ("VRDNs") were affected by a number of factors, such as the overall
uncertainty of the direction of rates as previously mentioned. Additionally,
the technical factors of supply and demand imbalances due to bond and coupon
money, tax payments, and 1996 fiscal year-end fund redemptions induced a
measure of volatility to short-term tax-exempt rates, particularly VRDNs.
For example, during the first week of December, excess demand from bond
calls, maturities, and coupon payments resulted in the Public Securities
Association ("PSA") Muni Swap rate,*** a proxy for VRDNs, falling from 3.55%
to 3.12%. Rates then quickly reversed directions and the PSA Muni Swap rate
gained 99 basis points from the first week to the fiscal year end -- peaking
at 4.11%. The reversal was due to mid-December tax payments by corporations,
as well as year-end tax selling by funds. Despite the volatility of
December, the index averaged 67% of seven-day taxable paper.
As long as inflation remains benign, the Fed should be content to sit on the
sidelines until confronted with signs of overriding strength or considerable
weakness in economic growth. The average maturity of the fund will continue
to be managed in accordance with our expectation for a stable monetary
policy in the near term. The average maturity target of 45 to 50 days
reflects our neutral stance. Nevertheless, we are vigilant in our watch of
market developments to best serve our municipal money market clients.
* 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 risks.
** The Bond Buyer's Index is a standard against which municipal bond yields
are measured.
*** The Public Securities Association is an association of dealers, banks,
and brokers underwriting municipal, U.S. government, and federal agency
debt securities and dealers in mortgage-backed securities.
SHAREHOLDER MEETING RESULTS
A Special Meeting of the Shareholders of Tax-Free Money Market Fund (the
"Portfolio"), a Portfolio of Lehman Brothers Institutional Funds Group
Trust, was held on November 13, 1996. On October 11, 1996, the record date
for shareholders voting at the meeting, there were 108,090,314 total
outstanding shares. The following items were considered by shareholders and
the results of their voting were as follows:
ABSTENTIONS WITHHELD
AND BROKER AUTHORITY
AGENDA ITEM FOR AGAINST NON-VOTES TO VOTE
1.To approve a proposed Agreement and Plan of Reorganization between Lehman
Brothers Institutional Funds Group Trust, on behalf of the Portfolio, and
Money Market Obligations Trust (the "Trust"), on behalf of its portfolio,
Tax-Free Obligations Fund (the "Fund"), whereby the Trust would acquire all
of the assets and known liabilities of the Portfolio in exchange for
Institutional Shares and Institutional Service Shares of the Fund to be
distributed pro rata by the Portfolio to holders of Class A Shares and
Class B Shares, respectively, in complete liquidation of the Portfolio.
98,154,593 0 0 0
2.Election of thirteen Trustees to serve until the next Annual Meeting of
Shareholders and until their successors have been elected and qualified.
John F. Donahue 98,154,593 0 0 0
Thomas G. Bigley 98,154,593 0 0 0
John T. Conroy, Jr. 98,154,593 0 0 0
William J. Copeland 98,154,593 0 0 0
J. Christopher Donahue 98,154,593 0 0 0
James E. Dowd 98,154,593 0 0 0
Lawrence D. Ellis, M.D. 98,154,593 0 0 0
Edward L. Flaherty, Jr. 98,154,593 0 0 0
Peter E. Madden 98,154,593 0 0 0
Gregor F. Meyer 98,154,593 0 0 0
John E. Murray, Jr. 98,154,593 0 0 0
Wesley W. Posvar 98,154,593 0 0 0
Marjorie P. Smuts 98,154,593 0 0 0
TAX-FREE OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- 100.0%
ALABAMA -- 3.3%
$ 3,885,000 Alabama HFA, 1995 Series E Weekly VRDNs (Royal Gardens Apart-
ments Project)/(SouthTrust Bank of Alabama, Birmingham LOC) $ 3,885,000
3,200,000 Birmingham, AL IDA, Revenue Refunding Bonds Weekly VRDNs
(S.P. Hotel Company)/(Amsouth Bank N.A., Birmingham LOC) 3,200,000
1,140,000 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) 1,140,000
700,000 Bon Air, AL IDB Weekly VRDNs (Avondale Mills, Inc.)/(SunTrust
Bank, Atlanta LOC) 700,000
3,500,000 Cherokee, AL IDB, IDR Refunding Bonds (Series 1993) Weekly VRDNs
(BOC Group, Inc.)/(Wachovia Bank of Georgia NA, Atlanta LOC) 3,500,000
3,295,000 Homewood, AL IDA Weekly VRDNs (Mountain Brook Inn
(Homewood AL))/(SouthTrust Bank of Alabama, Birmingham LOC) 3,295,000
210,000 Huntsville, AL IDA Weekly VRDNs (Parkway Project (Huntsville,
AL))/(First Alabama Bank, Birmingham LOC) 210,000
2,156,000 Irondale, AL IDB, Revenue Bonds (Series 1989) Weekly VRDNs
(Collateral Mortgage, Ltd.)/(SouthTrust Bank of Alabama,
Birmingham LOC) 2,156,000
12,000,000 Jefferson County, AL, GO Warrants (Series 1996) Weekly VRDNs
(Bayerische Landesbank Girozentrale LOC) 12,000,000
6,000,000 Jefferson County, AL, Sewer Revenue Warrants (Series 1995-A)
Weekly VRDNs (Bayerische Landesbank Girozentrale LOC) 6,000,000
1,385,000 Marshall County, AL, Special Obligation School Refunding Warrant
(Series 1994) Weekly VRDNs (Marshall County, AL Board of
Education)/(First Alabama Bank, Birmingham LOC) 1,385,000
2,500,000 Mobile, AL IDA Weekly VRDNs (McRae's Industries, Inc.)/
(Nationsbank, N.A., Charlotte LOC) 2,500,000
3,500,000 Mobile, AL IDB, PCR (Series 1993A) Weekly VRDNs (Alabama Power
Co.)/(Alabama Power Co. GTD) 3,500,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
ALABAMA -- CONTINUED
$ 9,250,000 Mobile, AL IDB, PCR (Series 1993B) Weekly VRDNs (Alabama Power
Co.)/(Alabama Power Co. GTD) $ 9,250,000
10,000,000 Mobile, AL Port City Medical Clinic Board, Revenue Bonds (Series
1992-A), 3.55% CP (Mobile, AL Infirmiary Association)/(Rabobank
Nederland, Utrecht LOC), Mandatory Tender 5/14/1997 10,000,000
2,000,000 Montgomery, AL BMC Special Care Facilities Finance Authority,
(Series 94A) Weekly VRDNs (Baptist Medical Center, AL)/(Amsouth
Bank N.A., Birmingham LOC) 2,000,000
1,335,000 Tuscaloosa County, AL Port Authority, (Series 1989A) Weekly VRDNs
(Capstone Hotel Ltd.)/(SouthTrust Bank of Alabama, Birmingham
LOC) 1,335,000
1,180,000 Tuscaloosa, AL IDB, Revenue Refunding Bonds (Series 1994) Weekly
VRDNs (Harco, Inc.)/(Amsouth Bank N.A., Birmingham LOC) 1,180,000
2,900,000 Winfield, AL, Variable/Fixed Rate Industrial Revenue Bonds
(Series 1984) Weekly VRDNs (Union Underwear Company, Inc.)/
(Bank of Nova Scotia, Toronto LOC) 2,900,000
Total 70,136,000
ALASKA -- 0.1%
800,000 Alaska State Housing Finance Corp., General Mortgage Revenue
Bonds, (1991 Series A) Weekly VRDNs (Credit Suisse, Zurich and
Westdeutsche Landesbank Girozentrale LIQs) 800,000
430,000 North Slope Boro, AK, (Series G), 7.50% Bonds (AMBAC INS),
6/30/1997 436,131
Total 1,236,131
ARIZONA -- 1.9%
3,000,000 Apache County, AZ IDA, 1983 (Series A) Weekly VRDNs (Tucson
Electric Power Co.)/(Barclays Bank PLC, London LOC) 3,000,000
4,000,000 Arizona Health Facilities Authority Weekly VRDNs (University
Physicians, Inc.)/(Bank One, Arizona N.A. LOC) 4,000,000
6,800,000 Arizona Health Facilities Authority, Pooled Loan Program Revenue
Bonds (Series 1985B) Weekly VRDNs (FGIC INS)/(Chase Manhattan
Bank N.A., New York LIQ) 6,800,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
ARIZONA -- CONTINUED
$ 1,000,000 Arizona Insured Municipal Securities Trust, (Series 1996A) Weekly
VRDNs (Chandler Street and Highway)/(MBIA INS)/(Norwest Bank
Minnesota, Minneapolis LIQ) $ 1,000,000
1,500,000 Arizona Insured Municipal Securities Trust, (Series 1996C) Weekly
VRDNs (Maricopa County, AZ University School District No. 93)/
(FGIC INS)/(Norwest Bank Minnesota, Minneapolis LIQ) 1,500,000
1,250,000 Arizona Insured Municipal Securities Trust, (Series 1996E) Weekly
VRDNs (Scottsdale (Memorial Hospitals))/(AMBAC INS)/(Norwest
Bank Minnesota, Minneapolis LIQ) 1,250,000
10,000,000 Coconino County, AZ Pollution Control Corporation, PCR Refunding
Bonds (Series 1995E) Weekly VRDNs (Nevada Power Co.)/(Societe
Generale, Paris LOC) 10,000,000
1,000,000 Maricopa County, AZ School District 92, (Series 1996A), 4.40%
TANs, 7/31/1997 1,002,362
2,000,000 Pima County, AZ IDA Weekly VRDNs (Tucson Electric Power
Co.)/(Barclays Bank PLC, London LOC) 2,000,000
10,500,000 Pima County, AZ IDA, (Series A) Weekly VRDNs (Tucson Electric
Power Co.)/(Barclays Bank PLC, London LOC) 10,500,000
Total 41,052,362
ARKANSAS -- 0.1%
2,610,000 Arkansas Development Finance Authority, (CR-71) (Series 1987D),
3.85% TOBs (FSA INS)/(Citibank NA, New York LIQ), Optional
Tender 2/1/1997 2,610,000
1,000,000 Sheridan, AR IDA Weekly VRDNs (H.H. Robertson Co.)/(PNC
Bank, N.A. LOC) 1,000,000
Total 3,610,000
CALIFORNIA -- 6.7%
12,700,000 California PCFA, (1996 Series G) Daily VRDNs (Pacific Gas &
Electric Co.) 12,700,000
14,285,000 California Public Capital Improvements Financing Authority, Trust
Receipts (Series 1996 FR-3) Weekly VRDNs (MBIA Insurance
Corporation INS)/(Bank of New York, New York LIQ) 14,285,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
CALIFORNIA -- CONTINUED
$ 22,000,000 California School Cash Reserve Program Authority, (Series A), 4.75%
TRANs (MBIA INS), 7/2/1997 $ 22,078,852
5,000,000 California School Cash Reserve Program Authority, (Series B), 4.50%
TRANs (MBIA INS), 12/19/1997 5,038,191
6,000,000 California State, (Series A), 4.50% RANs, 6/30/1997 6,012,484
31,000,000 California Statewide Communities Development Authority,
(1996 Series A), 4.75% TRANs (FSA INS), 6/30/1997 31,094,142
4,300,000 Lompoc, CA, 4.125% TRANs, 6/30/1997 4,304,295
5,000,000 Los Angeles County, CA Local Educational Agencies, (Series A), 4.75%
TRANs (FSA INS), 6/30/1997 5,014,019
26,000,000 Los Angeles County, CA Unified School District, 4.50% TRANs,
6/30/1997 26,076,629
1,000,000 San Bernardino County, CA, 4.50% TRANs (Landesbank Hessen-
Thueringen, Frankfurt and Toronto-Dominion Bank LOCs), 6/30/1997 1,002,456
10,000,000 South Coast, CA Local Education Agencies, (Series 1996A), 4.75%
TRANs, 6/30/1997 10,026,639
5,000,000 Vacaville Unified School District, CA, 4.375% TRANs, 7/1/1997 5,010,879
Total 142,643,586
COLORADO -- 0.4%
5,600,000 Colorado Health Facilities Authority Weekly VRDNs (Sisters of
Charity Health Care System) 5,600,000
2,825,000 Denver (City & County), CO, 4.10% TOBs (Blake Street Compendium)/
(Norwest Bank Minnesota, Minneapolis LOC), Optional Tender
12/15/1997 2,825,000
Total 8,425,000
CONNECTICUT -- 1.3%
3,805,000 Connecticut Development Health Care Facilities Weekly VRDNs
(Independence Living)/(Chase Manhattan Bank N.A., New York LOC) 3,805,000
23,300,000 Connecticut State Transportation Infrastructure Authority Weekly
VRDNs (Connecticut State)/(Commerzbank AG, Frankfurt LOC) 23,300,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
CONNECTICUT -- CONTINUED
$ 1,000,000 Connecticut State, Special Assessment Unemployment Compensation
Advance Fund, Revenue Bonds (Series 1993C), 3.90% TOBs (FGIC INS)/
(FGIC Securities Purchase, Inc. LIQ), Mandatory Tender 7/1/1997 $ 1,000,000
Total 28,105,000
DISTRICT OF COLUMBIA -- 0.1%
2,070,000 District of Columbia Housing Finance Agency, Multifamily Housing,
4.00% Bonds (Chastleton Project)/(Nationsbank, N.A., Charlotte LOC),
7/1/1997 2,070,000
FLORIDA -- 12.3%
4,000,000 Alachua County, FL Health Facilities Authority, Health Facilities
Revenue Bonds (Series 1996B) Weekly VRDNs (Shands Teaching
Hospital and Clinics, Inc.)/(MBIA INS)/(SunTrust Bank, Central
Florida LIQ) 4,000,000
10,000,000 Broward County, FL School District, (Series 1996A and 1996B), 4.25%
RANs, 4/24/1997 10,012,998
17,500,000 Dade County, FL HFA, Hospital Revenue Bonds (Series 1995) Weekly
VRDNs (Miami Children's Hospital Project)/(AMBAC INS)/
(SunTrust Bank, Atlanta LIQ) 17,500,000
5,610,000 Dade County, FL Solid Waste System, 4.00% Bonds (AMBAC INS),
10/1/1997 5,628,000
4,500,000 Dade County, FL Water & Sewer System Weekly VRDNs (FGIC INS)/
(Commerzbank AG, Frankfurt LIQ) 4,500,000
14,130,000 Florida HFA Weekly VRDNs (Cornerstone Imaging, Inc.)/(PNC Bank,
N.A. LOC) 14,130,000
5,120,000 Florida State Board of Education Administration, (CR55), (Series
1989A), 3.60% TOBs (Citibank NA, New York LIQ), Optional Tender
3/1/1997 5,120,000
7,960,000 Fort Lauderdale, FL Performing Arts Center Authority Weekly VRDNs
(SunTrust Bank, Central Florida LOC) 7,960,000
11,495,000 Gulf Breeze, FL, (Series 1985C) Weekly VRDNs (FGIC INS) 11,495,000
10,000,000 Gulf Breeze, FL, Variable Rate Demand Revenue Bonds (Series 1995A)
Weekly VRDNs (Florida Municipal Bond Fund)/(Barnett Bank,
N.A. LOC) 10,000,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
FLORIDA -- CONTINUED
$ 15,000,000 Highlands County, FL Health Facilities, (Series 1996A Accounts
Receivable) Weekly VRDNs (Adventist Health System)/(Capital
Markets Assurance Corp. INS)/(First National Bank of Chicago LIQ) $ 15,000,000
29,000,000 Highlands County, FL Health Facilities, (Series 1996B Accounts
Receivable) Weekly VRDNs (Adventist Health System)/(Capital
Markets Assurance Corp. INS)/(Canadian Imperial Bank of
Commerce, Toronto LIQ) 29,000,000
14,000,000 Highlands County, FL Health Facilities, Variable Rate Demand
Revenue Bonds (Series 1996A) Weekly VRDNs (Adventist Health
System)/(SunTrust Bank, Central Florida LOC) 14,000,000
7,000,000 Indian River County, FL Hospital District, (Series 1985) Weekly
VRDNs (Kredietbank N.V., Brussels LOC) 7,000,000
10,000,000 Miami, FL Health Facilities Authority, Health Facilities Revenue Bonds
(Series 1996) Weekly VRDNs (Miami Jewish Home and Hospital for
the Aged, Inc.)/(SunTrust Bank, Central Florida LOC) 10,000,000
11,630,000 Orange County, FL HFA, Multifamily Housing Revenue Bonds
Weekly VRDNs (Sutton Place. Ltd. Project)/(Nationsbank, N.A.,
Charlotte LOC) 11,630,000
11,215,000 Orange County, FL, Health Facilities Authority Weekly VRDNs
(Mayflower Retirement Community)/(Rabobank Nederland,
Utrecht LOC) 11,215,000
17,845,000 Orange County, FL, Health Facilities Authority, CDC Municipal
Products, Inc. Class A Certificates (Series 1996 D-1) Weekly VRDNs
(FGIC INS)/(CDC Municipal Products, Inc. LIQ) 17,845,000
10,670,000 Orange County, FL, Health Facilities Authority, CDC Municipal
Products Class A Certificates (Series 1996 D-2) Weekly VRDNs (FGIC
INS)/(CDC Municipal Products, Inc. LIQ) 10,670,000
6,000,000 Palm Beach County, FL, Revenue Bonds, (Series 1995) Weekly VRDNs
(Norton Gallery and School of Art, Inc. Project)/(Northern Trust Co.,
Chicago, IL LOC) 6,000,000
20,000,000 Sarasota County, FL Public Hospital District, Variable Rate Demand
Hospital Revenue Bonds (Series 1996A), 3.65% CP (Sarasota Memorial
Hospital)/(SunTrust Bank, Central Florida LIQ), Mandatory Tender
5/20/1997 20,000,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
FLORIDA -- CONTINUED
$ 13,400,000 Southeast Volusia Hospital District, Revenue Bonds (Series 1995)
Weekly VRDNs (Bert Fish Medical Center (FL))/(SouthTrust Bank of
Alabama, Birmingham LOC) $ 13,400,000
5,955,000 Volusia County, FL HFA Weekly VRDNs (Fisherman's Landing)/
(Mellon Bank NA, Pittsburgh LOC) 5,955,000
Total 262,060,998
GEORGIA -- 2.5%
3,300,000 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) 3,300,000
8,900,000 Burke County, GA Development Authority, (Series A) Weekly VRDNs
(Oglethorpe Power Corp.)/(FGIC INS)/(Credit Local de France LIQ) 8,900,000
3,000,000 Cherokee County, GA Development Authority Weekly VRDNs
(Seaboard Farms of Canton, Inc. Project)/(Bank of Nova Scotia,
Toronto LOC) 3,000,000
1,065,000 Clayton County, GA Housing Authority, (Series 1990A) Weekly
VRDNs (Huntington Woods Apartments)/(FSA INS)/(Barclays Bank
PLC, London LIQ) 1,065,000
22,330,000 Cobb-Marietta, GA Coliseum & Exhibit Hall Authority, Junior Lien
Revenue Bonds (Series 1996A) Weekly VRDNs (MBIA Insurance
Corporation INS)/(Canadian Imperial Bank of Commerce,
Toronto LIQ) 22,330,000
4,405,000 Conyers-Rockdale-Big Haynes, GA Impoundment Authority,
(Series 1997), 3.75% BANs, 12/31/1997 4,406,932
1,200,000 Coweta County, GA IDA Daily VRDNs (Eckerds Warehouse)/(Union
Bank of Switzerland, Zurich LOC) 1,200,000
1,600,000 De Kalb County, GA Development Authority, (Series 1992) Weekly
VRDNs (American Cancer Society, GA)/(SunTrust Bank, Atlanta LOC) 1,600,000
1,580,000 Floyd County, GA, Pollution Control Revenue Bonds (First Series
1996) Daily VRDNs (Georgia Power Company Plant Hammond
Project)/(Georgia Power Company Plant Hammond Project GTD) 1,580,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
GEORGIA -- CONTINUED
$ 4,470,000 Fulton County, GA Housing Authority, (Series 1994B) Weekly VRDNs
(Champions Green Apartments Project)/(SouthTrust Bank of
Alabama, Birmingham LOC) $ 4,470,000
1,660,000 Fulton County, GA Housing Authority, (Series 1996) Weekly VRDNs
(Champions Green Apartments Project)/(SouthTrust Bank of Alabama,
Birmingham LOC) 1,660,000
Total 53,511,932
ILLINOIS -- 12.5%
4,500,000 Chicago O'Hare International Airport, Special Facilities Revenue
Bonds (Series 1983C) Daily VRDNs (AMR Inc. Project)/(Royal Bank
of Canada, Montreal LOC) 4,500,000
20,000,000 Chicago, IL Board of Education, Variable Rate Certificates (Series
1996BB) Weekly VRDNs (MBIA INS)/(Bank of America NT and SA,
San Francisco LIQ) 20,000,000
25,000,000 Chicago, IL, GO (Series 1996), 3.10% TOBs (Landesbank Hessen-
Thueringen, Frankfurt LOC), Mandatory Tender 2/4/1997 25,000,000
350,000 Darien, IL IDA, (Series 1989C) Weekly VRDNs (Kinder-Care Learning
Centers, Inc.)/(Toronto-Dominion Bank LOC) 350,000
7,000,000 Galesburg, IL, (Series 1996) Weekly VRDNs (Knox College Project)/
(Lasalle National Bank, Chicago LOC) 7,000,000
20,000,000 Illinois Development Finance Authority Weekly VRDNs (Lyric Opera
of Chicago)/(Credit Agricole U.S.A., Inc., Harris Trust & Savings Bank,
Chicago, NBD Bank, Michigan and Northern Trust Co., Chicago,
IL LOCs) 20,000,000
3,000,000 Illinois Development Finance Authority Weekly VRDNs (Newlywed
Food)/(Mellon Bank NA, Pittsburgh LOC) 3,000,000
3,900,000 Illinois Development Finance Authority, (Series 1993A) Weekly
VRDNs (Loyola Academy)/(Northern Trust Co., Chicago, IL LOC) 3,900,000
10,000,000 Illinois Development Finance Authority, PCR, (Series 1996A) Weekly
VRDNs (Commonwealth Edison Co.)/(AMBAC INS)/(Bank of New
York, New York LIQ) 10,000,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
ILLINOIS -- CONTINUED
$ 29,400,000 Illinois Development Finance Authority, PCR, (Series 1996B) Weekly
VRDNs (Commonwealth Edison Co.)/(AMBAC INS)/(Bank of New
York, New York LIQ) $ 29,400,000
28,300,000 Illinois Development Finance Authority, Variable/Fixed Rate Demand
Revenue Bonds, (Series 1996) Weekly VRDNs (Chicago Symphony
Orchestra Project)/(Bank of America Illinois LOC) 28,300,000
7,500,000 Illinois Educational Facilities Authority, 3.60% CP (Field Museum of
Natural History)/(Northern Trust Co., Chicago, IL LOC), Mandatory
Tender 5/15/1997 7,500,000
7,500,000 Illinois Educational Facilities Authority, Revenue Bonds (Series 1995)
Weekly VRDNs (Ravinia Festival Association (IL))/(NBD Bank,
Michigan LOC) 7,500,000
4,100,000 Illinois Health Facilities Authority Weekly VRDNs (Highland Park
Hospital)/(FGIC INS)/(FGIC Securities Purchase, Inc. LIQ) 4,100,000
16,100,000 Illinois Health Facilities Authority Weekly VRDNs (OSF Health
Care Systems) 16,100,000
19,800,000 Illinois Health Facilities Authority, (Series 1989A) Weekly VRDNs
(Methodist Health Services Corp.)/(Fuji Bank, Ltd., Tokyo LOC) 19,800,000
8,285,000 Illinois Health Facilities Authority, (Series 1996B) Weekly VRDNs
(Lutheran Home and Services Project)/(Bank One, Chicago LOC) 8,285,000
35,000,000 Illinois Health Facilities Authority, Revenue Bonds (Series 1985B)
Weekly VRDNs (OSF Health Care Systems)/(Bank of America Illinois
and Rabobank Nederland, Utrecht LIQs) 35,000,000
1,000,000 Illinois Health Facilities Authority, Revolving Fund Pooled Financing
Program (Series 1985F) Weekly VRDNs (NBD Bank, Michigan LOC) 1,000,000
5,000,000 Illinois Health Facilities Authority, Variable Rate Adjustable Demand
Revenue Bonds (Series 1996), 3.95% CP (Evanston Hospital Corp.),
Mandatory Tender 8/15/1997 5,000,000
7,022,899 LaSalle National Bank Leasetops Trust, Series 1995A Leasetops
Certificates Weekly VRDNs (Lasalle National Bank, Chicago LIQ)/
(Lasalle National Bank, Chicago LOC) 7,022,899
3,245,000 Rockford Park District, IL, Series C, 5.30% Bonds, 12/15/1997 3,283,208
Total 266,041,107
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
INDIANA -- 1.1
$ 980,000 Dale, IN IDA Weekly VRDNs (Spencer Industries)/(National City
Bank, Kentucky LOC) $ 980,000
2,110,000 Indiana Health Facilities Finance Authority Rehabilitation Center
Weekly VRDNs (Crossroads Rehabilitation Center)/(Bank One,
Indianapolis, IN LOC) 2,110,000
4,735,000 Indianapolis, IN, Variable Rate Demand Economic Development
Revenue Bonds, (Series 1995) Weekly VRDNs (Pleasant Run Children's
Homes, Inc.)/(Fifth Third Bank, Cincinnati LOC) 4,735,000
15,900,000 Rockport, IN, PCR Refunding Bonds (Series 1995 B) Weekly VRDNs
(Indiana Michigan Power Company Project)/(AMBAC INS)/(Bank of
New York, New York LIQ) 15,900,000
Total 23,725,000
IOWA -- 0.1%
2,085,000 Iowa Finance Authority, Single Family Mortgage Bonds (Series 1996A),
3.10% TOBs (FGIC INV)/(FGIC Securities Purchase, Inc. LIQ),
Mandatory Tender 2/28/1997 2,085,000
KENTUCKY -- 2.3%
1,400,000 Boone County, KY, Revenue Refunding Bonds Weekly VRDNs (Spring
Meadow Associates)/(Huntington National Bank, Columbus,
OH LOC) 1,400,000
12,242,000 Kentucky Interlocal School Transportation Association, (Series A),
4.05% TRANs, 6/30/1997 12,242,000
35,000,000 Owensboro, KY, (Series 1996) Weekly VRDNs (Owensboro Mercy
Health System, Inc. Project)/(Bank of America Illinois LOC) 35,000,000
Total 48,642,000
LOUISIANA -- 1.3%
250,000 Baton Rouge, LA, Public Improvement Sales Tax Revenue Bonds,
Series 1992A, 9.00% Bonds (FSA INS), 8/1/1997 255,867
800,000 Calcasieu Parish, LA, IDB, PCR Bonds Weekly VRDNs (Citgo
Petroleum Corp.) 800,000
4,850,000 Louisiana PFA, (Series 1985A) Weekly VRDNs (FGIC INS)/(Societe
Generale, Paris LIQ) 4,850,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
LOUISIANA -- CONTINUED
$ 1,765,000 Louisiana PFA, (Series A), 4.50% TANs (East Baton Rouge School
Board), 9/24/1997 $ 1,771,558
4,000,000 Louisiana PFA, (Series B), 4.50% TANs (Orleans Parish, LA
School Board), 9/24/1997 4,014,863
3,200,000 Louisiana PFA, Hospital Revenue Bonds Series 1995 Weekly VRDNs
(Willis-Knighton Medical Center)/(AMBAC INS)/(Mellon Bank N.A.,
Pittsburgh LIQ) 3,200,000
1,000,000 Louisiana State Recovery District, Sales Tax Revenue Bonds, 3.90%
Bonds (United States Treasury COL)/(FGIC INS), 7/1/1997 1,000,000
1,400,000 St. James Parish, LA, Pollution Control Revenue Weekly VRDNs
(Occidental Petroleum Corp.)/(Wachovia Bank of Georgia N.A.,
Atlanta LOC) 1,400,000
10,065,000 Stephens Municipal Investment Products Company, Inc., Class A
Certificates (Series 1997-1) Weekly VRDNs (New Orleans, LA)/
(FGIC INS)/(Bank of New York, New York LIQ) 10,065,000
Total 27,357,288
MAINE -- 0.2%
3,705,000 Scarborough, ME, 3.90% BANs, 4/15/1997 3,707,192
MARYLAND -- 2.2%
400,000 Baltimore County, MD Port Facility Monthly VRDNs (Occidental
Petroleum Corp.)/(Morgan Guaranty Trust Co., New York LOC) 400,000
2,000,000 Maryland EDC, Pooled Financing Revenue Bonds, (Series 1995)
Weekly VRDNs (Maryland Municipal Bond Fund)/(Nationsbank,
N.A., Charlotte LOC) 2,000,000
2,200,000 Maryland Health & Higher Educational Facilities Authority, (Series
1985B) Weekly VRDNs (First National Bank of Chicago LOC) 2,200,000
1,800,000 Maryland Health & Higher Educational Facilities Authority, ACES
Revenue Bonds (Series 1994) Weekly VRDNs (Daughters of Charity) 1,800,000
546,000 Maryland Health & Higher Educational Facilities Authority, Pooled
Loan Program Revenue Notes, 3.50% CP (John Hopkins University)/
(Sanwa Bank Ltd, Osaka LIQ), Mandatory Tender 3/12/1997 546,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MARYLAND -- CONTINUED
$ 5,970,000 Maryland Health & Higher Educational Facilities Authority, Pooled
Loan Program Revenue Notes, 3.70% CP (John Hopkins University)/
(Sanwa Bank Ltd, Osaka LIQ), Mandatory Tender 2/14/1997 $ 5,970,000
14,600,000 Maryland Health & Higher Educational Facilities Authority, Revenue
Bonds (Series 1985A) Weekly VRDNs (First National Bank of Chicago
LOC) 14,600,000
900,000 Maryland Health & Higher Educational Facilities Authority, Revenue
Bonds (Series 1992B) Weekly VRDNs (North Arundel Hospital)/
(Mellon Bank N.A., Pittsburgh LOC) 900,000
8,635,000 Maryland State Community Development Administration, (Series
1987-2), 3.75% TOBs (First National Bank of Chicago LIQ), Optional
Tender 4/1/1997 8,635,000
1,000,000 Montgomery County, MD, EDR Weekly VRDNs (Howard Hughes
Medical Center) 1,000,000
8,500,000 Montgomery County, MD, EDR Weekly VRDNs (U.S. Pharmacopeial
Convention Facility)/(Chase Manhattan Bank N.A., New York LOC) 8,500,000
560,000 St. Mary's County, MD, Public Facilities Bonds of 1995, 7.00% Bonds
(MBIA INS), 3/1/1997 561,399
Total 47,112,399
MASSACHUSETTS -- 2.2%
9,100,000 Boston, MA Water & Sewer Commission, General Revenue Bonds
(1994 Series A) Weekly VRDNs (State Street Bank and Trust Co. LOC) 9,100,000
7,000,000 Clinton, MA, 4.00% BANs, 11/21/1997 7,021,033
6,000,000 Commonwealth of Massachusetts, (Series B), 5.00% Bonds, 6/1/1997 6,022,987
10,408,000 Easton, MA, 4.00% BANs, 4/10/1997 10,414,535
1,000,000 Massachusetts Water Pollution Abatement Trust Pool, Pool Loan
Program Bonds, Series 2, 4.40% Bonds, 2/1/1997 1,000,000
1,000,000 New Bedford, MA, 4.50% RANs (Fleet National Bank, Providence,
R.I. LOC), 6/30/1997 1,002,157
8,000,000 North Andover, MA, 4.00% BANs, 1/22/1998 8,022,470
1,000,000 Springfield, MA, 4.25% BANs (Fleet National Bank, Providence,
R.I. LOC), 2/14/1997 1,000,155
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MASSACHUSETTS -- CONTINUED
$ 1,000,000 Springfield, MA, 4.50% BANs (Fleet National Bank, Providence,
R.I. LOC), 6/27/1997 $ 1,001,921
1,000,000 Springfield, MA, 4.60% BANs, 7/11/1997 1,002,105
Total 45,587,363
MICHIGAN -- 3.5%
700,000 Battle Creek, MI Economic Development Corporation, Limited
Obligation Economic Development Revenue Refunding Bonds (Series
1992) Weekly VRDNs (Michigan Carton & Paperboard Company)/
(American National Bank, Chicago LOC) 700,000
5,400,000 Dearborn, MI Economic Development Corp, (Series 1991) Weekly
VRDNs (Oakbrook Common)/(Mellon Bank N.A., Pittsburgh LOC) 5,400,000
1,100,000 Garden City, MI HFA, Hospital Revenue Bonds (Series 1996A) Weekly
VRDNs (Garden City Hospital, Osteopathic)/(First of America Bank -
Michigan LOC) 1,100,000
3,365,000 Kalamazoo, MI Economic Development Corp., 1995 Limited
Obligation Revenue Refunding Bonds Weekly VRDNs (Wyndham
Project, MI)/(First of America Bank - Illinois LOC) 3,365,000
6,700,000 Michigan State Building Authority, (Series 1), 3.55% CP (Canadian
Imperial Bank of Commerce, Toronto LOC), Mandatory Tender
5/1/1997 6,700,000
22,500,000 Michigan State Hospital Finance Authority, (Series 1994) Weekly
VRDNs (Mt. Clemens General Hospital)/(Comerica Bank, Detroit,
MI LOC) 22,500,000
12,400,000 Michigan State Hospital Finance Authority, (Series A) Weekly
VRDNs (OSF Health Care Systems) 12,400,000
11,000,000 Michigan Strategic Fund, Limited Obligation PCRs (Series 1993)
Weekly VRDNs (Allied-Signal, Inc.) 11,000,000
2,695,000 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) 2,695,000
1,400,000 Regents of University of Michigan, Intercollegiate Athletic Revenue
Bonds (Series 1995) Daily VRDNs 1,400,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MICHIGAN -- CONTINUED
$ 6,460,000 Wayne County, MI Downriver Sewage Disposal System, (1994
Series B), 3.45% CP (Wayne County, MI )/(Comerica Bank, Detroit,
MI LOC), Mandatory Tender 4/8/1997 $ 6,460,000
Total 73,720,000
MINNESOTA -- 5.8%
8,335,000 Anoka-Hennepin, MN ISD 11, GO Certificates of Indebtedness (Series
1996A), 3.44% TANs (Minnesota Tax and Aid Anticipation Borrowing
Program GTD), 3/13/1997 8,335,068
2,100,000 DDSB Municipal Securities Trusts, Series 1994O Weekly VRDNs
(Richfield, MN ISD 280)/(First Bank NA, Minneapolis LIQ) 2,100,000
1,000,000 DDSB Municipal Securities Trusts, Series 1994S Weekly VRDNs (Osseo,
MN ISD 279)/(First Bank NA, Minneapolis LIQ) 1,000,000
6,390,000 DDSB Municipal Securities Trusts, Series 1994T Weekly VRDNs (Osseo,
MN ISD 279)/(First Bank NA, Minneapolis LIQ) 6,390,000
11,000,000 DDSB Municipal Securities Trusts, Series 1994V Weekly VRDNs
(St. Louis Park Healthsystem, MN)/(Norwest Bank Minnesota,
Minneapolis LIQ) 11,000,000
1,865,000 Dakota County, MN Housing & Redevelopment Authority,
Multifamily Rental Housing Revenue Bonds (Series 1994-B) Weekly
VRDNs (Westwood Ridge Senior Residence Project)/(First Bank N.A.,
Minneapolis LOC) 1,865,000
4,500,000 Hennepin Co. MN, (Series 1995C) Weekly VRDNs (Hennepin Co. MN
GTD) 4,500,000
4,250,000 MN Municipal Securities Trust, Series 1996F, Floating Rate Certificates
Weekly VRDNs (Lakeville, MN ISD 194)/(Norwest Bank Minnesota,
Minneapolis LIQ) 4,250,000
8,500,000 Minneapolis, MN, 4.00% TOBs (Minneapolis Institute of Arts),
Optional Tender 4/1/1997 8,500,000
2,100,000 Minneapolis, MN, Variable Rate Housing Revenue Bonds Weekly
VRDNs (One Ten Grant Project)/(First Bank N.A., Minneapolis LOC) 2,100,000
8,000,000 Minnesota Agricultural and Economic Development Board, (Series
1996) Weekly VRDNs (Evangelical Lutheran Good Samaritan Society)/
(Rabobank Nederland, Utrecht LOC) 8,000,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MINNESOTA -- CONTINUED
$ 5,500,000 Minnesota State Higher Education Coordinating Board, Supplemental
Student Loan Program Refunding Revenue Bonds (Series 1994A)
Weekly VRDNs (Norwest Bank Minnesota, Minneapolis LIQ) $ 5,500,000
3,000,000 Minnesota State Higher Education Facility Authority, (Series Four-A2)
Weekly VRDNs (University of St. Thomas) 3,000,000
7,000,000 Minnesota Tax and Aid Anticipation Borrowing Program, Certificates
of Participation (Series 1996A), 4.25% TANs (Minnesota Tax and Aid
Anticipation Borrowing Program GTD), 2/21/1997 7,003,592
11,500,000 Rochester, MN Health Care Facility Authority Weekly VRDNs (Mayo
Foundation) 11,500,000
13,500,000 Rochester, MN Health Care Facility Authority Weekly VRDNs (Mayo
Foundation) 13,500,000
8,000,000 Rosemount, MN, PCR (Series 1984) Weekly VRDNs (Koch
Refining Co.) 8,000,000
3,000,000 Shakopee, MN Hospital Finance Authority Weekly VRDNs (St. Francis
Regional Medical Center)/(Citibank NA, New York LOC) 3,000,000
4,000,000 St. Paul, MN Port Authority, (Series 1991) Weekly VRDNs (West Gate
Office)/(First Bank N.A., Minneapolis LOC) 4,000,000
10,000,000 VRDC/IVRC Trust, Tax-Exempt Variable Rate Demand Certificates
(Series 1997A) Weekly VRDNs (Regents of University of Minnesota)/
(Citibank NA, New York LIQ) 10,000,000
Total 123,543,660
MISSISSIPPI -- 0.3%
1,640,000 Hinds County, MS, (Series 1991) Weekly VRDNs (North State St.
Project)/(Amsouth Bank N.A., Birmingham LOC) 1,640,000
4,000,000 Perry County, MS, PC Revenue Bonds (Series 1989) Weekly VRDNs
(Leaf River Forest Project)/(Morgan Guaranty Trust Co.,
New York LOC) 4,000,000
Total 5,640,000
MISSOURI -- 1.5%
6,000,000 Missouri State Environmental Improvement & Energy Authority,
3.65% CP (Kansas City Power And Light Co.), Mandatory Tender
11/5/1997 6,000,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
MISSOURI -- CONTINUED
$ 1,000,000 Missouri State HEFA, (Series 1995B) Weekly VRDNs (Sisters of Mercy
Health System, St. Louis, Inc.)/(ABN AMRO Bank N.V., Amsterdam,
Credit Suisse, Zurich and Rabobank Nederland, Utrecht LIQs) $ 1,000,000
1,695,000 Missouri State HEFA, (Series 1996), 4.50% TRANs (Pattonville, MO
School District), 9/8/1997 1,700,878
1,000,000 Missouri State HEFA, (Series 1996D), 4.50% TRANs (Rockwood R-VI
School District), 9/8/1997 1,003,468
1,700,000 Missouri State HEFA, Health Facilities Revenue Bonds (Series 1989 B)
Weekly VRDNs (Sisters of Mercy Health Corporation (Michigan &
Iowa))/(ABN AMRO Bank N.V., Amsterdam LIQ) 1,700,000
14,550,000 Missouri State HEFA, Health Facilities Revenue Bonds (Series 1996A)
Weekly VRDNs (Deacones Long Term Care of Missouri)/(Bank One,
Texas N.A. LOC) 14,550,000
1,000,000 Missouri State HEFA, Series 1995B Weekly VRDNs (SSM Health
Care)/(MBIA INS)/(Rabobank Nederland, Utrecht LIQ) 1,000,000
4,200,000 Poplar Bluff, MO IDA, (Series 1987) Weekly VRDNs (Gates Rubber
Co.)/(NBD Bank, Michigan LOC) 4,200,000
Total 31,154,346
NEVADA -- 0.9%
5,000,000 Clark County, NV, Airport System Refunding Revenue Bonds (Series
1993A) Weekly VRDNs (MBIA INS)/(National Westminster Bank,
PLC, London LIQ) 5,000,000
15,900,000 Nevada Housing Division, Multi-Unit Housing Revenue Refunding
Bonds (1991 Series A) Weekly VRDNs (Park Vista Apartments
Project)/(Sumitomo Bank Ltd., Osaka LOC) 15,900,000
Total 20,900,000
NEW JERSEY -- 0.3%
1,735,000 New Jersey Housing & Mortgage Financing Authority, (C-76), 3.70%
TOBs (MBIA INS)/(Citibank NA, New York LIQ), Mandatory
Tender 4/1/1997 1,735,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
NEW JERSEY -- CONTINUED
$ 5,000,000 New Jersey Housing & Mortgage Financing Authority, (Series 1992A),
3.55% TOBs (Citibank N.A., New York LIQ), Optional Tender 2/1/1997 $ 5,000,000
Total 6,735,000
NEW MEXICO -- 0.6%
12,000,000 New Mexico State Highway Commission, Adjustable Tender
Subordinate Lien Tax Revenue Highway Bonds (Series 1996) Weekly
VRDNs (FSA INS)/(Canadian Imperial Bank of Commerce,
Toronto LIQ) 12,000,000
NEW YORK -- 5.0%
19,081,010 Equity Trust II, (1996 Series) Weekly VRDNs (Republic National Bank
of New York LOC) 19,081,010
8,400,000 New York City Municipal Water Finance Authority, Water and Sewer
System Revenue Bonds (Series 1995 A) Daily VRDNs (FGIC INS)/
(FGIC Securities Purchase, Inc. LIQ) 8,400,000
12,000,000 New York City, NY, (Series 1995 F-5) Weekly VRDNs (Landesbank
Hessen-Thueringen, Frankfurt LOC) 12,000,000
19,000,000 New York City, NY, (Series A), 4.50% TANs, 2/12/1997 19,004,009
21,800,000 New York City, NY, (Series B), 4.50% RANs (Bank of Nova Scotia,
Toronto, Canadian Imperial Bank of Commerce, Toronto and
Commerzbank AG, Frankfurt LOCs), 6/30/1997 21,860,977
17,000,000 New York State, (Series A), 4.50% Bonds, 7/15/1997 17,046,525
1,000,000 Royalton-Hartland, NY CSD, 4.50% BANs, 8/15/1997 1,002,566
7,000,000 VRDC/IVRC Trust, (Series 1993B) Weekly VRDNs (Metropolitan
Transportation Authority, New York)/(AMBAC INS)/(Hong Kong &
Shanghai Banking Corp. LIQ) 7,000,000
Total 105,395,087
NORTH CAROLINA -- 2.2%
3,800,000 Greensboro, NC, Certificates of Participation 1994 Equipment Project
Weekly VRDNs (Wachovia Bank of Georgia N.A., Atlanta LIQ) 3,800,000
15,000,000 Martin County, NC IFA, (Series 1993) Weekly VRDNs
(Weyerhaeuser Co.) 15,000,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
NORTH CAROLINA -- CONTINUED
$ 15,900,000 North Carolina Educational Facilities Finance Agency, (Series 1990)
Weekly VRDNs (Bowman Gray School of Medicine)/(Wachovia Bank
of NC, N.A., Winston-Salem LOC) $ 15,900,000
7,100,000 North Carolina Medical Care Commission Hospital, Revenue Bonds
(Series 1992B) Weekly VRDNs (North Carolina Baptist) 7,100,000
2,150,000 North Carolina Municipal Power Agency No. 1, (Series A), 3.55% CP
(Morgan Guaranty Trust Co., New York and Union Bank of
Switzerland, Zurich LOCs), Mandatory Tender 5/14/1997 2,150,000
3,000,000 Winston-Salem, NC, GO Bonds (Series 1990) Weekly VRDNs (Credit
Suisse, Zurich LIQ) 3,000,000
Total 46,950,000
OHIO -- 4.5%
1,950,000 Akron, Bath & Copley, OH Joint Township Weekly VRDNs (Visiting
Nurses)/(National City Bank, Cleveland, OH LOC) 1,950,000
15,000,000 Clermont County, OH, Adjustable Rate Hospital Facilities Revenue
Bonds (Series 1996) Weekly VRDNs (Mercy Health Systems)/(Credit
Suisse, Zurich LIQ) 15,000,000
1,000,000 Cleveland-Cuyahoga County, OH Port Authority, (Series 1993) Weekly
VRDNs (Rock & Roll Hall of Fame Museum)/(Credit Local de
France LOC) 1,000,000
16,000,000 Columbus, OH CSD, Special Obligation Tax Revenue Notes, 4.00%
TRANs, 4/10/1997 16,014,766
3,600,000 Cuyahoga County, OH Hospital Authority Weekly VRDNs (St. Lukes
Hospital)/(First National Bank of Chicago LOC) 3,600,000
2,450,000 Cuyahoga County, OH IDA Weekly VRDNs (H.P. Parking Co.)/
(KeyBank, N.A. LOC) 2,450,000
3,620,000 Franklin County, OH Hospital Facility Authority, (Series 1992) Weekly
VRDNs (Wesley Glenn, Inc.)/(Fifth Third Bank, Cincinnati LOC) 3,620,000
7,447,000 Greene County, OH, Certificates of Indebtedness - Issue III, 4.00%
BANs, 3/26/1997 7,450,643
5,630,000 Greene County, OH, Various Purpose Certificates of Indebtedness,
4.00% BANs, 12/11/1997 5,646,270
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
OHIO -- CONTINUED
$ 270,000 Lucas County, OH, Hospital Improvement Revenue Weekly VRDNs
(Sunshine Children's Home)/(National City Bank, Cleveland,
OH LOC) $ 270,000
8,000,000 Lucas County, OH, Hospital Refunding Revenue Bonds Weekly
VRDNs (Riverside Hospital, OH)/(Huntington National Bank,
Columbus, OH LOC) 8,000,000
835,000 Marion County, OH Hospital Authority, (Series 1991) Weekly VRDNs
(Marion County, OH Pooled Hospital Program)/(Bank One,
Columbus, N.A. LOC) 835,000
3,750,000 Mayfield Village, OH IDA Weekly VRDNs (Beta Campus Co.)/(Key
Bank, N.A. LOC) 3,750,000
13,900,000 Montgomery County, OH Health Facilities Authority, (Series 1995)
Weekly VRDNs (Sisters of Charity Health Care System)/(Toronto-
Dominion Bank LIQ) 13,900,000
700,000 Montgomery County, OH IDA Weekly VRDNs (Center-Plex Venture)/
(KeyBank, N.A. LOC) 700,000
1,665,000 Montgomery, OH IDA Weekly VRDNs (Bethesda Two Limited
Partnership)/(Huntington National Bank, Columbus, OH LOC) 1,665,000
7,300,000 Rickenbacker, OH Port Authority, (Series 1992) Weekly VRDNs
(Rickenbacker Holdings, Inc.)/(Bank One, Columbus, N.A. LOC) 7,300,000
1,000,000 Twinsburg, OH IDA Weekly VRDNs (Carl J Massara Project)/
(KeyBank, N.A. LOC) 1,000,000
2,085,000 Wayne County, OH, Health Care Facility Revenue Bonds (Series 1995)
Weekly VRDNs (D & M Realty Project)/(Bank One, Youngstown,
NA LOC) 2,085,000
Total 96,236,679
OKLAHOMA -- 3.0%
24,500,000 Oklahoma State Industrial Authority, Flexible Rate Hospital Revenue
Bonds (Series 1990B) Weekly VRDNs (Baptist Medical Center, OK)/
(Credit Suisse, Zurich and Morgan Guaranty Trust Co., New York
LIQs) 24,500,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
OKLAHOMA -- CONTINUED
$ 37,675,000 Oklahoma State Industrial Authority, Health System Revenue Bonds
(Series 1995A) Weekly VRDNs (Baptist Medical Center, OK)/(Credit
Suisse, Zurich and Morgan Guaranty Trust Co., New York LIQs) $ 37,675,000
Total 62,175,000
OREGON -- 0.6%
5,000,000 Multnomah County, OR School District, 4.50% TANs, 6/26/1997 5,011,442
2,000,000 Oregon Health, Housing & Cultural Facilities Authority, Revenue
Bonds (1995 Series A) Weekly VRDNs (Guide Dogs for the Blind, Inc.
Project)/(Banque Nationale de Paris LOC) 2,000,000
5,050,000 Oregon Health, Housing & Cultural Facilities Authority, Variable Rate
Health Facilities Revenue Bonds (1995 Series A) Weekly VRDNs
(Evangelical Lutheran Good Samaritan Society)/(First Bank N.A.,
Minneapolis LOC) 5,050,000
1,000,000 Oregon State Housing and Community Services Department, Single
Family Mortgage Program (Series 1996F), 4.00% TOBs, Mandatory
Tender 8/1/1997 1,000,000
Total 13,061,442
PENNSYLVANIA -- 5.7%
1,850,000 Allegheny County, PA HDA, (Series 1988A) Weekly VRDNs
(Allegheny Hospital)/(PNC Bank, N.A. LOC) 1,850,000
8,800,000 Allegheny County, PA IDA, PCR (Series 1992A), 3.65% TOBs
(Duquesne Light Power Co.)/(Canadian Imperial Bank of Commerce,
Toronto LOC), Optional Tender 10/30/1997 8,800,000
6,250,000 Beaver County, PA IDA, PCR Refunding Bonds (1992 Series-E), 3.70%
CP (Toledo Edison Co.)/(Toronto-Dominion Bank LOC), Mandatory
Tender 12/4/1997 6,250,000
3,070,000 Clinton County, PA Municipal Authority, (Series A) Weekly VRDNs
(Lock Haven Hospital)/(Mellon Bank N.A., Pittsburgh LOC) 3,070,000
7,230,000 Commonwealth of Pennsylvania, 5.25% Bonds (FGIC INS),
11/15/1997 7,317,857
7,690,000 Cumberland County, PA Municipal Authority, Variable Rate Revenue
Bonds (Series 1996 B), 4.25% TOBs (Dickinson College)/(Mellon Bank
N.A., Pittsburgh LOC), Optional Tender 10/31/1997 7,727,171
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
PENNSYLVANIA -- CONTINUED
$ 12,000,000 Delaware County, PA IDA, Refunding Revenue Bonds (Series 1993G),
3.625% TOBs (Delaware County Resource Recovery (PA))/(General
Electric Capital Corp. LOC), Optional Tender 12/1/1997 $ 12,000,000
3,200,000 Delaware County, PA Weekly VRDNs (American College)/(PNC Bank,
N.A. LOC) 3,200,000
12,200,000 Erie County, PA Hospital Authority Weekly VRDNs (St. Vincent
Health System)/(Mellon Bank N.A., Pittsburgh LOC) 12,200,000
7,500,000 Erie County, PA, 4.25% TANs (PNC Bank, N.A. LOC), 12/31/1997 7,516,512
890,000 Merrill Lynch Puttable FLOATs/RITES Trust, (Series PP2) Weekly
VRDNs (Merrill Lynch Capital Services, Inc. LIQ) 890,000
1,500,000 Montgomery County, PA Higher Education and Health Authority,
(Series 1992) Weekly VRDNs (Pottstown Healthcare Corporation
Project)/(Corestates Bank N.A., Philadelphia, PA LOC) 1,500,000
20,500,000 New Castle, PA Area Hospital Authority, (Series 1996) Weekly VRDNs
(Jameson Memorial Hospital)/(FSA INS)/(PNC Bank, N.A. LIQ) 20,500,000
5,000,000 North Lebanon Township, PA, Municipal Authority Mortgage Bonds
Weekly VRDNs (Grace Community, Inc.)/(Corestates Bank N.A.,
Philadelphia, PA LOC) 5,000,000
4,000,000 Northeastern, PA Hospital & Education Authority, (Series 1996)
Weekly VRDNs (Allhealth Pooled Financing Program)/(Chase
Manhattan Bank N.A., New York LOC) 4,000,000
2,000,000 Pennsylvania Housing Finance Authority, 3.85% TOBs (First National
Bank of Chicago LIQ), Optional Tender 4/1/1997 2,000,000
3,200,000 Philadelphia Redevelopment Authority, Multifamily Revenue Bonds
(Series 1985) Weekly VRDNs (Franklin Town Towers)/(Marine
Midland Bank N.A., Buffalo, NY LOC) 3,200,000
7,265,000 Philadelphia, PA IDA, (Series 93) Weekly VRDNs (Sackett
Development)/(Mellon Bank N.A., Pittsburgh LOC) 7,265,000
5,000,000 Sayre, PA, Health Care Facilities Authority Weekly VRDNs (VHA of Pennsylvania)/
(AMBAC INS)/(First National Bank of Chicago LIQ) 5,000,000
2,000,000 Washington County, PA Hospital Authority Weekly VRDNs (Keystone
Diversified Management Corp.)/(Mellon Bank N.A., Pittsburgh LOC) 2,000,000
Total 121,286,540
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
PUERTO RICO -- 2.4%
$ 25,000,000 Puerto Rico Government Development Bank, 3.40% CP, Mandatory
Tender 2/24/1997 $ 25,000,000
25,000,000 Puerto Rico Government Development Bank, 3.45% CP, Mandatory
Tender 3/20/1997 25,000,000
Total 50,000,000
RHODE ISLAND -- 0.1%
1,250,000 Rhode Island Housing & Mortgage Finance Corp., Multifamily
Housing Bonds, 1995 Series A, 4.60% Bonds (AMBAC INS),
7/17/1997 1,252,985
1,500,000 Rhode Island Industrial Facilities Corp. Weekly VRDNs (Blackstone
Valley Electric Co.)/(Bank of New York, New York LOC) 1,500,000
Total 2,752,985
SOUTH CAROLINA -- 0.1%
1,090,000 South Carolina Job Development Authority Daily VRDNs (Chase
Manhattan Bank N.A., New York LOC) 1,090,000
TENNESSEE -- 5.2%
8,000,000 Chattanooga, TN HEFA Weekly VRDNs (Mccallie School)/(SunTrust
Bank, Atlanta LOC) 8,000,000
8,300,000 Chattanooga, TN HEFA Weekly VRDNs (Sisken Hospital)/(Sumitomo
Bank Ltd., Osaka LOC) 8,300,000
14,000,000 Chattanooga, TN HEFA Weekly VRDNs (Sisken Hospital)/(Sumitomo
Bank Ltd., Osaka LOC) 14,000,000
6,600,000 Chattanooga, TN IDB, (Series 1987) Weekly VRDNs (Warehouse Row,
Ltd. Project)/(Credit Suisse, Zurich LOC) 6,600,000
1,300,000 Chattanooga, TN IDB, (Series 1997) Weekly VRDNs (Market Street
Project)/(Credit Suisse, Zurich LOC) 1,300,000
20,600,000 Chattanooga-Hamilton County, TN Hospital Authority Daily VRDNs
(Erlanger Medical Center)/(Morgan Guaranty Trust Co., New
York LIQ) 20,600,000
200,000 Jackson County, TN IDB, (Series B) Daily VRDNs (Esselte AB)/(Bank
of America Illinois LOC) 200,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
TENNESSEE -- CONTINUED
$ 5,000,000 Knox County, TN Health Education & Housing Facilities Board,
Adjustable Rate Hospital Facilities Revenue Bonds (Series 1996A)
Weekly VRDNs (Mercy Health Systems)/(Credit Suisse, Zurich LIQ) $ 5,000,000
5,265,000 Maury County, TN HEFA, (Series 1996E) Weekly VRDNs (Southern
Healthcare Systems, Inc.)/(Bank One, Texas N.A. LOC) 5,265,000
6,275,000 Memphis, TN Center City Revenue Finance Corp., (Series 1996A)
Weekly VRDNs (South Bluffs)/(National Bank of Commerce,
Memphis, TN LOC) 6,275,000
1,000,000 Memphis, TN, (Series 1996), 5.00% Bonds, 7/1/1997 1,004,384
1,000,000 Memphis, TN, General Improvement Refunding Bonds, (Series 1995A)
Weekly VRDNs (Westdeutsche Landesbank Girozentrale LOC) 1,000,000
2,700,000 Memphis, TN, General Improvement Refunding Bonds, (Series 1995A)
Weekly VRDNs (Westdeutsche Landesbank Girozentrale LOC) 2,700,000
1,285,000 Metropolitan Government Nashville & Davidson County, TN HEFA,
(Series 1992) Weekly VRDNs (Belmont University Project)/
(Nationsbank of Tennessee LOC) 1,285,000
2,000,000 Metropolitan Government Nashville & Davidson County, TN HEFA,
(Series 1996) Weekly VRDNs (Dede Wallace Center Project)/(SunTrust
Bank, Nashville LOC) 2,000,000
4,500,000 Metropolitan Government Nashville & Davidson County, TN HEFA,
Revenue Bonds (Series 1985A), 3.65% TOBs (Vanderbilt University)
1/15/1998 4,500,000
6,830,000 Metropolitan Government Nashville & Davidson County, TN IDB,
Metropolitan Government Revenue Bonds (Series 1995) Weekly
VRDNs (YMCA Projects)/(Nationsbank of Tennessee LOC) 6,830,000
4,100,000 Metropolitan Nashville Tennessee AA, Airport Improvement Revenue
Bonds Refunding (Series 1995) Weekly VRDNs (FGIC INS)/(Credit
Local de France LIQ) 4,100,000
3,000,000 Montgomery Co., TN Public Building Authority, Pooled Financing
Revenue Bonds (Series 1996) Weekly VRDNs (Montgomery County
Loan)/(NationsBank, South LOC) 3,000,000
5,500,000 Roane, TN IDB, (Series 1982) Monthly VRDNs (Fortafil Fibers, Inc.
Project)/(ABN AMRO Bank N.V., Amsterdam LOC) 5,500,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
TENNESSEE -- CONTINUED
$ 2,930,000 Tennessee State School Board Authority, (Series B), 7.00% Bonds,
5/1/1997 $ 2,952,153
1,500,000 Tennessee State, Adjustable Bond Anticipation Note (Series A) Weekly
VRDNs (Tennessee Consolidated Retirement System LIQ) 1,500,000
Total 111,911,537
TEXAS -- 2.7%
815,000 Austin, TX, 14.25% Bonds (United States Treasury PRF), 5/15/1997
(@100) 838,543
3,995,000 Dallas, TX, (Series C), 3.75% TOBs, Optional Tender 6/15/1997 3,995,000
100,000 El Paso, TX, (Series 1992), 5.10% Bonds, 3/1/1997 100,127
400,000 Grapevine, TX, IDC Airport Improvement, Series 1993 Weekly VRDNs
(Southern Air Transport, Inc. - SimuFlite Training International
Project)/(Bank of Montreal LOC) 400,000
2,700,000 Harris County, TX HFDC, (Series 1994) Daily VRDNs (Methodist
Hospital, Harris County, TX) 2,700,000
10,850,000 Harris County, TX HFDC, (Series B), 3.60% TOBs (San Jacinto
Methodist Hospital)/(Morgan Guaranty Trust Co., New York LOC),
Mandatory Tender 3/3/1997 10,850,000
1,720,000 North Richland Hills, TX IDC Weekly VRDNs (Tecnol, Inc.)/
(Nationsbank, N.A., Charlotte LOC) 1,720,000
10,320,000 TX Pooled Tax Exempt Trust, Certificates of Participation (Series 1996)
Weekly VRDNs (Bank One, Texas N.A. LOC) 10,320,000
27,000,000 Texas State, 4.75% TRANs, 8/29/1997 27,118,906
Total 58,042,576
UTAH -- 0.1%
1,000,000 Intermountain Power Agency, UT, 8.625% Bonds (United States
Treasury PRF), 7/1/1997 (@102) 1,032,160
VERMONT -- 0.1%
1,000,000 Vermont Educational and Health Buildings Financing Agency, (Series
1995A) Weekly VRDNs (Key Bank of New York LOC) 1,000,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
VIRGINIA -- 1.6%
$ 2,750,000 Arlington County, VA Weekly VRDNs (Ballston Public Parking)/
(Citibank N.A., New York LOC) $ 2,750,000
14,700,000 Roanoke, VA IDA, (Series A) Weekly VRDNs (Carillion Health
System)/(Nationsbank, N.A., Charlotte LIQ) 14,700,000
9,600,000 York County, VA IDA, (Series 1985), 3.50% CP (Virginia Electric
Power Co.), Mandatory Tender 3/18/1997 9,600,000
7,800,000 York County, VA IDA, (Series 1985), 3.60% CP (Virginia Electric
Power Co.), Mandatory Tender 5/9/1997 7,800,000
Total 34,850,000
WASHINGTON -- 0.1%
2,200,000 Port of Seattle, WA, IDR Bonds (Series 1985) Weekly VRDNs (Douglas
Management Company Project)/(Mellon Bank N.A., Pittsburgh LOC) 2,200,000
915,000 Tacoma School District No. 10, 3.90% Bonds (AMBAC INS), 6/1/1997 915,039
685,000 Washington State Housing Finance Commission, Single-Family
Program Bonds (1996 Series 1N-S), 3.75% TOBs, Mandatory Tender
6/2/1997 685,000
Total 3,800,039
WEST VIRGINIA -- 0.9%
15,960,000 Cabell County Commission, WV, Life Care Facilities Multi-Option
Revenue Bonds (Series 1995) Weekly VRDNs (Foster Foundation)/
(Huntington National Bank, Columbus, OH LOC) 15,960,000
3,000,000 Marshall County, WV, PCR (Series 1992) Weekly VRDNs (PPG
Industries, Inc.) 3,000,000
285,000 Mercer County, WV, IDR Refunding Bonds (Series 1995) Weekly
VRDNs (Flowers Baking Co. of West Virginia, Inc.)/(SunTrust Bank,
Atlanta LOC) 285,000
Total 19,245,000
WISCONSIN -- 1.9%
3,250,000 Hancock, WI, Industrial Development Revenue Refunding Bonds
(Series 1996) Weekly VRDNs (Ore-Ida Foods, Inc.)/(Heinz (H.J.)
Co. GTD) 3,250,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A)SHORT-TERM MUNICIPALS -- CONTINUED
WISCONSIN -- CONTINUED
$ 1,100,000 Seymour, WI IDA Weekly VRDNs (Beatrice Cheese, Inc.)/(Bank of
New York, New York LOC) $ 1,100,000
30,000,000 Wisconsin HEFA Weekly VRDNs (St. Luke's Medical Center)/
(Sumitomo Bank Ltd., Osaka LOC) 30,000,000
5,000,000 Wisconsin State, 7.30% Bonds (United States Treasury PRF),
5/1/1997 (@101) 5,091,361
Total 39,441,361
WYOMING -- 0.3%
2,545,000 Douglas, WY, IDR Bonds, 3.65% TOBs (Safeway, Inc.)/(Bankers
Trust Co./LOC) 6/2/1997 2,545,000
1,125,000 Natrona County, WY, Hospital Revenue, 5.36% TOBs (Grainger
(W.W.), Inc.), Optional Tender 6/1/1997 1,125,000
2,000,000 Uinta County, WY, PCR Bonds (Series 1984), 3.80% TOBs (Chevron
U.S.A., Inc.)/(Chevron U.S.A., Inc. GTD), Optional Tender 6/15/1997 2,000,000
Total 5,670,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $ 2,124,741,770
</TABLE>
(a) The Fund may only invest in securities rated in one of the two highest
short-term rating categories by nationally recognized statistical rating
organizations ("NRSROs") or unrated securities of comparable quality. An
NRSRO's two highest rating categories are determined without regard for
sub-categories and gradations. For example, securities rated SP-1+, SP-1 or
SP-2 by Standard & Poor's Ratings Group, MIG-1, or MIG-2 by Moody's
Investors Service, Inc., and F-1+, F-1, and F-2 by Fitch Investors Service,
Inc. are all considered rated in one of the two highest short-term rating
categories.
Securities rated in the highest short-term rating category (and unrated
securities of comparable quality) are identified as First Tier securities.
Securities rated in the second highest short-term rating category (and
unrated securities of comparable quality) are identified as Second Tier
securities. The Fund follows applicable regulations in determining whether
a security is rated and whether a security rated by multiple NRSROs in
different rating categories should be identified as a First or Second Tier
security.
At January 31, 1997, the portfolio securities were rated as follows:
TIER RATING PERCENT BASED ON TOTAL MARKET VALUE (UNAUDITED)
FIRST TIER SECOND TIER
100% 0%
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($2,124,658,856) at January 31, 1997.
The following acronyms are used throughout this portfolio:
ACES -- Adjustable Convertible Extendable Securities
AMBAC -- American Municipal Bond Assurance Corporation
BANs -- Bond Anticipation Notes
COL -- Collateralized
CP -- Commercial Paper
CSD -- Central School District
EDC -- Economic Development Commission
EDR -- Economic Development Revenue
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
IFA -- Industrial Finance Authority
INS -- Insured
INV -- Investment Agreement
ISD -- Independent School District
LIQ -- Liquidity Agreement
LOCs -- Letter(s) of Credit
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
PCR -- Pollution Control Revenue
PC -- Participation Certificate
PCFA -- Pollution Control Finance Authority
PFA -- Public Facility Authority
PLC -- Public Limited Company
PRF -- Prerefunded
RANs -- Revenue Anticipation Notes
TANs -- Tax Anticipation Notes
TOBs -- Tender Option Bonds
TRANs -- Tax and Revenue Anticipation Notes
VHA -- Veterans Housing Administration
VRDNs -- Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
TAX-FREE OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $2,124,741,770
Cash 795,630
Income receivable 15,306,368
Receivable for shares sold 127,720
Prepaid expenses 5,818
Total assets 2,140,977,306
LIABILITIES:
Payable for investments purchased $9,927,139
Income distribution payable 5,874,760
Accrued expenses 516,551
Total liabilities 16,318,450
NET ASSETS for 2,124,741,534 shares outstanding $2,124,658,856
NET ASSETS CONSIST OF:
Paid in capital $2,124,741,534
Accumulated net realized loss on investments (82,678)
Total Net Assets $2,124,658,856
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$1,596,774,573 / 1,596,839,479 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$527,884,283 / 527,902,055 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 37,611,284
EXPENSES:
Investment advisory fee $ 2,106,099
Administrative personnel and services fee 795,657
Custodian fees 113,370
Transfer and dividend disbursing agent fees and expenses 50,329
Directors'/Trustees' fees 12,846
Auditing fees 6,616
Legal fees 7,178
Portfolio accounting fees 126,687
Shareholder services fee -- Institutional Shares 2,086,007
Shareholder services fee -- Institutional Service Shares 546,617
Share registration costs 87,648
Printing and postage 23,602
Insurance premiums 13,994
Taxes 3,874
Miscellaneous 6,596
Total expenses 5,987,120
Waivers
Waiver of investment advisory fee $ (1,202,063)
Waiver of shareholder services fee -- Institutional Shares (2,086,007)
Total waivers (3,288,070)
Net expenses 2,699,050
Net investment income 34,912,234
Net realized gain on investments 5,450
Change in net assets resulting from operations $ 34,917,684
</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)
JANUARY 31, YEAR ENDED
1997 JULY 31, 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 34,912,234 $ 62,658,478
Net realized gain (loss) on investments 5,450 (66,893)
Change in net assets resulting from operations 34,917,684 62,591,585
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income
Institutional Shares (28,087,008) (51,152,839)
Institutional Service Shares (6,825,226) (11,505,639)
Change in net assets resulting from distributions to
shareholders (34,912,234) (62,658,478)
SHARE TRANSACTIONS --
Proceeds from sale of shares 6,626,657,483 12,426,624,832
Net asset value of shares issued to shareholders in payment of
distributions declared 3,151,270 4,751,851
Cost of shares redeemed (6,426,542,469) (12,057,396,164)
Change in net assets resulting from share transactions 203,266,284 373,980,519
Change in net assets 203,271,734 373,913,626
NET ASSETS:
Beginning of period 1,921,387,122 1,547,473,496
End of period $ 2,124,658,856 $ 1,921,387,122
</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,
1997 1996 1995 1994 1993 1992 1991 1990(A)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income 0.02 0.03 0.04 0.02 0.03 0.04 0.05 0.04
LESS DISTRIBUTIONS
Distributions from
net investment
income (0.02) (0.03) (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 $ 1.00
TOTAL RETURN(B) 1.71% 3.55% 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% 0.20%*
Net investment
income 3.37%* 3.46% 3.62% 2.41% 2.49% 3.58% 4.93% 5.75%*
Expense waiver/
reimbursement(c) 0.36%* 0.36% 0.39% 0.15% 0.14% 0.17% 0.26% 0.21%*
SUPPLEMENTAL DATA
Net assets,
end of period
(000 omitted) $1,596,775 $1,514,979 $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,
1997 1996 1995 1994(A)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.002
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.002)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.58% 3.29% 3.39% 0.18%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.45%* 0.45% 0.45% 0.39%*
Net investment income 3.12%* 3.22% 3.48% 3.04%*
Expense waiver/reimbursement(c) 0.11%* 0.11% 0.14% 0.15%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $527,884 $406,408 $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, 1997 (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 investment objective of the Fund is to provide current
income exempt from federal regular income tax consistent with stability of
principal.
The Fund offers two classes of shares: Institutional Shares and
Institutional Service Shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS -- The Fund's use of the amortized cost method to
value its portfolio securities is in accordance with Rule 2a-7 under the
Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS -- Interest income and
expenses are accrued daily. Bond premium and discount, if applicable, are
amortized as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES -- It is the Fund's policy to comply with the provisions of
the Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
At January 31, 1997, the Fund, for federal tax purposes, had a capital loss
carryforward of $56,069, 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:
EXPIRATION YEAR EXPIRATION AMOUNT
2001 $ 580
2002 $19,220
2004 $36,269
Additionally, net capital losses of $96,260 attributable to security
transactions incurred after October 31, 1995 are treated as arising on
August 1, 1996, 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.
USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER -- Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value) for
each class of shares. At January 31, 1997, capital paid-in aggregated
$2,124,741,535.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JANUARY 31, JULY 31,
1997 1996
INSTITUTIONAL SHARES SHARES SHARES
<S> <C> <C>
Shares sold 5,741,704,308 10,558,231,210
Shares issued to shareholders in payment of distributions declared 2,673,889 3,176,723
Shares redeemed (5,662,586,973) (10,341,838,613)
Net change resulting from Institutional Share transactions 81,791,224 219,569,320
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JANUARY 31, JULY 31,
1997 1996
INSTITUTIONAL SERVICE SHARES SHARES SHARES
<S> <C> <C>
Shares sold 884,953,175 1,868,393,621
Shares issued to shareholders in payment of distributions declared 477,381 1,575,128
Shares redeemed (763,955,496) (1,715,557,550)
Net change resulting from Institutional Service Share transactions 121,475,060 154,411,199
Net change resulting from share transactions 203,266,284 373,980,519
</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.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES -- FServ, through
its subsidiary, Federated Shareholder Services Company ("FSSC") serves as
transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is
based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
INTERFUND TRANSACTIONS -- During the period ended January 31, 1997, the Fund
engaged in purchase and sale transactions with funds that have a common
investment adviser (or affiliated investment advisers), common
Directors/Trustees, and/or common Officers. These purchase and sale
transactions were made at current market value pursuant to Rule 17a-7 under
the Act, amounting to $2,057,480,000 and $2,087,817,926, respectively.
GENERAL -- Certain of the Officers and Trustees of the Trust are Officers
and Directors or Trustees of the above companies.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
J. Christopher Donahue
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
J. Christopher Donahue
President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
J. Crilley Kelly
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective investors only
when preceded or accompanied by the fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
TAX-FREE OBLIGATIONS FUND
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JANUARY 31, 1997
[Graphic]
Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 60934N401
Cusip 60934N880
0022807 (3/97)
[Graphic]
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, 1997.
First, you will find an investment review on the short-term Treasury market
from the fund's portfolio manager. Following the investment review are the
fund's portfolio of investments and its financial statements.
Over the six-month reporting period, dividends paid to shareholders of
Institutional Shares and Institutional Service Shares each totaled $0.03 per
share. At the end of the period, net assets topped the $7 billion mark.
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.
Thank you for your confidence in the daily earning power of Treasury
Obligations Fund. As always, your questions and comments are welcome.
Sincerely,
[Graphic]
J. Christopher Donahue
President
March 15, 1997
* Although money market funds seek to maintain a stable net asset value of
$1.00 per share, there is no assurance that they will be able to do so. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
INVESTMENT REVIEW
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 35-45 day average maturity range, a neutral stance for the fund.
Over the six months ended January 31, 1997, the Federal Reserve Board (the
"Fed") stood pat in the face of economic growth that exceeded the 21/2% pace
thought to be the non-inflationary potential. Confronted with persistent
strength in the interest rate-sensitive sectors, the Fed stuck to its belief
that economic growth would return to a more moderate pace. Early in the
period, the market itself was not so sure, and movements in interest rates
proved to be rather volatile as expectations regarding the timing and extent
of the next policy move from the Fed swayed back and forth with each new
piece of economic data. When signs of the long-awaited slowdown finally
began to emerge, the market then fretted that it might not be occurring
quickly enough to prevent the need for the Fed to tighten in order to ward
off inflationary pressures. By the end of the reporting period, however, the
market calmed itself once more as growth in employment and housing moderated
and inflation remained tame. While the advance release for fourth quarter
Gross Domestic Product was a robust 4.7%, it was boosted by net exports and
a number of one-time factors, and the underlying fundamentals point to more
sedate growth in the first quarter. Overall, the federal funds target rate
remained unchanged over the period, at 5.25%, where it has been since late
January 1996.
Movements in interest rates early in the period reflected the market
uncertainty. The yield on the three-month Treasury bill peaked at 5.35% in
early September amid fears that the robust economy might spark inflation --
particularly in the face of tight labor market conditions. The yield then
plunged to 5% in late September/early October as signs of tempered growth
began to appear and relief finally took hold. The yield then rebounded to a
more realistic 5.15%, and traded within a fairly narrow range -- with the
exception of a technically-driven drop at year-end -- for the remainder of
the reporting period as the market embraced the idea that the Fed was likely
to be on hold indefinitely. Overall, the yields at the front end of the
Treasury yield curve ended the period 16 to 26 basis points lower,
reflecting the market's retreat from expectations of an imminent tightening
in monetary policy.
The fund was targeted in a 35-45 day average maturity target range over the
period, essentially a neutral stance for the portfolio. Once an average
maturity range is established, the fund attempts to maximize performance
through ongoing relative value analysis. The fund's structure remained
barbelled over the reporting period, as a yield advantage continued to exist
for repurchase agreements relative to other short-term investments. The fund
combined a significant percentage in these repurchase agreements --primarily
on an overnight basis -- with purchases of securities with 6- to 13-month
maturities. This portfolio structure continued to provide a competitive
yield.
The Fed is likely to be fairly content with the present trend of moderating
growth and benign inflation, and, in our opinion, should not be moved to
change monetary policy in the near term. We expect that they will continue
to keep a watchful eye on potential inflationary pressures, however, in
light of continued tight labor market conditions. We would expect the front
end of the market to continue to be range-bound with a slight positive
slope, and we will likely maintain our current neutral positioning. However,
changing economic and market developments are continuously monitored to best
serve our clients attracted to the short-term U.S. government market.
* An AAAm rating is 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. These ratings do not remove
market risks and are subject to change.
SHAREHOLDER MEETING RESULTS
A Special Meeting of the Shareholders of Treasury Instruments Money Market
Fund II (the "Portfolio"), a Portfolio of Lehman Brothers Institutional
Funds Group Trust, was held on November 13, 1996. On October 11, 1996, the
record date for shareholders voting at the meeting, there were 109,437,228
total outstanding shares. The following items were considered by
shareholders and the results of their voting were as follows:
<TABLE>
<CAPTION>
ABSTENTIONS WITHHELD
AND AUTHORITY TO
AGENDA ITEM FOR AGAINST BROKER NON-VOTES VOTE
<C> <S>
1. To approve a proposed Agreement and Plan of Reorganization between Lehman Brothers Institutional Funds
Group Trust, on behalf of the Portfolio, and Money Market Obligations Trust (the "Trust"), on behalf of its
portfolio, Treasury Obligations Fund (the "Fund"), whereby the Trust would acquire all of the assets and
known liabilities of the Portfolio in exchange for Institutional Shares and Institutional Service Shares of
the Fund to be distributed pro rata by the Portfolio to holders of Class A Shares and Class B Shares,
respectively, in complete liquidation of the Portfolio.
</TABLE>
<TABLE>
<C> <S> <C> <C> <C> <C>
88,090,602 0 0 0
2. Election of thirteen Trustees to serve until the next Annual Meeting of Shareholders and until their
successors have been elected and qualified.
John F. Donahue 88,090,602 0 0 0
Thomas G. Bigley 88,090,602 0 0 0
John T. Conroy, Jr. 88,090,602 0 0 0
William J. Copeland 88,090,602 0 0 0
J. Christopher Donahue 88,090,602 0 0 0
James E. Dowd 88,090,602 0 0 0
Lawrence D. Ellis, M.D. 88,090,602 0 0 0
Edward L. Flaherty, Jr. 88,090,602 0 0 0
Peter E. Madden 88,090,602 0 0 0
Gregor F. Meyer 88,090,602 0 0 0
John E. Murray, Jr. 88,090,602 0 0 0
Wesley W. Posvar 88,090,602 0 0 0
Marjorie P. Smuts 88,090,602 0 0 0
</TABLE>
TREASURY OBLIGATIONS FUND
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM U.S. TREASURY OBLIGATIONS -- 20.1%
$ 371,500,000 (a)U.S. Treasury Bills -- 5.1%
5.093% - 5.765%, 4/3/1997 - 2/5/1998 $ 362,695,458
1,052,000,000 U.S. Treasury Notes -- 15.0%
5.750% - 8.625%, 4/30/1997 - 9/30/1997 1,055,113,694
TOTAL SHORT-TERM U.S. TREASURY OBLIGATIONS 1,417,809,152
(B)REPURCHASE AGREEMENTS -- 81.1%
330,000,000 BT Securities Corporation, 5.580%, dated 1/31/1997, due 2/3/1997 330,000,000
220,000,000 Bank of Tokyo-Mitsubishi Ltd., 5.600%, dated 1/31/1997,
due 2/3/1997 220,000,000
249,000,000 Barclays de Zoete Wedd Securities, Inc., 5.600%, dated 1/31/1997,
due 2/3/1997 249,000,000
200,000,000 Bear, Stearns and Co., 5.580%, dated 1/31/1997, due 2/3/1997 200,000,000
255,000,000 CIBC Wood Gundy Securities Corp., 5.580%, dated 1/31/1997,
due 2/3/1997 255,000,000
265,000,000 Daiwa Securities America, Inc., 5.580%, dated 1/31/1997,
due 2/3/1997 265,000,000
50,000,000 Dean Witter Reynolds, Inc., 5.600%, dated 1/31/1997, due 2/3/1997 50,000,000
120,000,000 Deutsche Bank Government Securities, Inc., 5.570%, dated 1/31/1997,
due 2/3/1997 120,000,000
350,000,000 Donaldson, Lufkin and Jenrette Securities Corp., 5.550%,
dated 1/31/1997, due 2/3/1997 350,000,000
350,000,000 First Union Capital Markets, 5.580%, dated 1/31/1997, due 2/3/1997 350,000,000
500,000,000 Goldman Sachs Group, LP, 5.550%, dated 1/31/1997, due 2/3/1997 500,000,000
200,000,000 Harris Government Security, Inc., 5.550%, dated 1/31/1997,
due 2/3/1997 200,000,000
100,000,000 Harris Government Security, Inc., 5.570%, dated 1/31/1997,
due 2/3/1997 100,000,000
350,000,000 Lehman Brothers, Inc., 5.600%, dated 1/31/1997, due 2/3/1997 350,000,000
200,000,000 Nikko Securities, 5.580%, dated 1/31/1997, due 2/3/1997 200,000,000
</TABLE>
TREASURY OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(B)REPURCHASE AGREEMENTS -- CONTINUED
$ 350,000,000 Nomura Securities International, Inc., 5.580%, dated 1/31/1997,
due 2/3/1997 $ 350,000,000
250,000,000 Sanwa-BGK Securities Co., LP, 5.580%, dated 1/31/1997,
due 2/3/1997 250,000,000
115,000,000 Societe Generale, New York, 5.580%, dated 1/31/1997, due 2/3/1997 115,000,000
95,000,000 State Street Bank and Trust Co., 5.550%, dated 1/31/1997,
due 2/3/1997 95,000,000
51,900,000 Swiss Bank Capital Markets, 5.570%, dated 1/31/1997, due 2/3/1997 51,900,000
250,000,000 Toronto Dominion Securities (USA) Inc., 5.580%, dated 1/31/1997,
due 2/3/1997 250,000,000
20,000,000 UBS Securities, Inc., 5.530%, dated 1/31/1997, due 2/3/1997 20,000,000
315,000,000 UBS Securities, Inc., 5.580%, dated 1/31/1997, due 2/3/1997 315,000,000
185,000,000 (c)Goldman Sachs Group, LP, 5.260%, dated 1/13/1997, due 2/12/1997 185,000,000
145,000,000 (c)J.P. Morgan & Co., Inc., 5.300%, dated 1/30/1997, due 3/3/1997 145,000,000
127,000,000 (c)Swiss Bank Capital Markets, 5.320%, dated 1/6/1997, due 3/7/1997 127,000,000
77,000,000 (c)UBS Securities, Inc., 5.280%, dated 1/24/1997, due 3/25/1997 77,000,000
TOTAL REPURCHASE AGREEMENTS 5,719,900,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(D) $ 7,137,709,152
</TABLE>
(a) The issue shows the rate of discount at time of purchase.
(b) Repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in
joint accounts with other Federated funds.
(c) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement within seven days.
(d) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($7,049,736,471) at January 31, 1997.
The following acronym is used throughout this portfolio:
LP -- Limited Partnership
(See Notes which are an integral part of the Financial Statements)
TREASURY OBLIGATIONS FUND
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Investments in repurchase agreements $ 5,719,900,000
Investments in securities 1,417,809,152
Total investments in securities, at amortized cost and value $ 7,137,709,152
Income receivable 20,863,494
Receivables for investments sold 36,633,846
Receivable for shares sold 985
Total assets 7,195,207,477
LIABILITIES:
Payable for investments purchased 82,326,536
Income distribution payable 30,306,020
Payable for shares redeemed 31,990,436
Accrued expenses 848,014
Total liabilities 145,471,006
NET ASSETS for 7,049,736,471 shares outstanding $ 7,049,736,471
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$4,972,244,989 / 4,972,244,989 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$2,077,491,482 / 2,077,491,482 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, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $181,375,321
EXPENSES:
Investment advisory fee $ 6,718,790
Administrative personnel and services fee 2,538,281
Custodian fees 191,519
Transfer and dividend disbursing agent fees and expenses 137,542
Directors'/Trustees' fees 30,192
Auditing fees 6,532
Legal fees 10,764
Portfolio accounting fees 240,397
Shareholder services fee -- Institutional Shares 6,132,714
Shareholder services fee -- Institutional Service Shares 2,265,774
Share registration costs 247,388
Printing and postage 11,224
Insurance premiums 26,036
Taxes 32,936
Miscellaneous 1,811
Total expenses 18,591,900
Waivers --
Waiver of investment advisory fee $(3,326,811)
Waiver of shareholder services fee -- Institutional Shares (6,132,714)
Total waivers (9,459,525)
Net expenses 9,132,375
Net investment income $172,242,946
</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,
1997 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 172,242,946 $ 300,534,344
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income
Institutional Shares (127,432,936) (240,569,688)
Institutional Service Shares (44,810,010) (59,964,656)
Change in net assets resulting from
distributions to
shareholders (172,242,946) (300,534,344)
SHARE TRANSACTIONS --
Proceeds from sale of shares 20,942,609,781 36,669,931,962
Net asset value of shares issued to
shareholders in payment of
distributions declared 32,768,004 62,692,910
Cost of shares redeemed (20,092,350,991) (34,550,837,468)
Change in net assets resulting from share
transactions 883,026,794 2,181,787,404
Change in net assets 883,026,794 2,181,787,404
NET ASSETS:
Beginning of period 6,166,709,677 3,984,922,273
End of period $ 7,049,736,471 $ 6,166,709,677
</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,
1997 1996 1995 1994 1993 1992 1991 1990(A)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING
OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income 0.03 0.05 0.05 0.03 0.03 0.05 0.07 0.04
LESS DISTRIBUTIONS
Distributions
from net
investment income (0.03) (0.05) (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 $ 1.00
TOTAL RETURN(B) 2.64% 5.53% 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% 0.20%*
Net investment
income 5.19%* 5.37% 5.42% 3.29% 3.11% 4.49% 6.65% 8.16%*
Expense waiver/
reimbursement(c) 0.35%* 0.36% 0.36% 0.10% 0.07% 0.08% 0.09% 0.15%*
SUPPLEMENTAL DATA
Net assets, end
of period
(000 omitted) $4,972,245 $4,649,870 $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,
1997 1996 1995 1994(A)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.05 0.003
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.05) (0.003)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.51% 5.26% 5.23% 0.29%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.45%* 0.45% 0.45% 0.39%*
Net investment income 4.94%* 5.12% 5.53% 4.26%*
Expense waiver/reimbursement(c) 0.10%* 0.11% 0.11% 0.10%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $2,077,491 $1,516,839 $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, 1997 (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 investment objective of the Fund is to provide current
income consistent with stability of principal.
The Fund offers two classes of shares: Institutional Shares and
Institutional Service Shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS -- The Fund's use of the amortized cost method to
value its portfolio securities is in accordance with Rule 2a-7 under the
Act.
REPURCHASE AGREEMENTS -- It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the Federal
Reserve Book Entry System, or to have segregated within the custodian bank's
vault, all securities held as collateral under repurchase agreement
transactions. Additionally, procedures have been established by the Fund to
monitor, on a daily basis, the market value of each repurchase agreement's
collateral to ensure that the value of collateral at least equals the
repurchase price to be paid under the repurchase agreement transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less
than the repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS -- Interest income and
expenses are accrued daily. Bond premium and discount, if applicable, are
amortized as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES -- It is the Fund's policy to comply with the provisions of
the Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER -- Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the 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, 1997, capital paid-in aggregated
$7,049,736,471. Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED
1997 JULY 31, 1996
INSTITUTIONAL SHARES SHARES SHARES
<S> <C> <C>
Shares sold 13,800,261,633 27,640,869,241
Shares issued to shareholders in payment of distributions declared 19,275,746 35,998,981
Shares redeemed (13,497,162,673) (26,468,065,612)
Net change resulting from Institutional Share transactions 322,374,706 1,208,802,610
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED
1997 JULY 31, 1996
INSTITUTIONAL SERVICE SHARES SHARES SHARES
<S> <C> <C>
Shares sold 7,142,348,148 9,029,062,721
Shares issued to shareholders in payment of distributions declared 13,492,258 26,693,929
Shares redeemed (6,595,188,318) (8,082,771,856)
Net change resulting from Institutional Service Share transactions 560,652,088 972,984,794
Net change resulting from share transactions 883,026,794 2,181,787,404
</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.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES -- FServ, through
its subsidiary, Federated Shareholder Services Company ("FSSC"), serves as
transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is
based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES -- FServ maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's
average daily net assets for the period, plus out-of-pocket expenses.
GENERAL -- Certain of the Officers and Trustees of the Trust are Officers
and Directors or Trustees of the above companies.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
William J. Copeland
J. Christopher Donahue
James E. Dowd
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Peter E. Madden
Gregor F. Meyer
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
OFFICERS
John F. Donahue
Chairman
J. Christopher Donahue
President
Edward C. Gonzales
Executive Vice President
John W. McGonigle
Executive Vice President, Treasurer, and Secretary
Richard B. Fisher
Vice President
J. Crilley Kelly
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective investors only
when preceded or accompanied by the fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
TREASURY
OBLIGATIONS
FUND
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JANUARY 31, 1997
[Graphic]
Federated Investors
Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
[Graphic]
Cusip 60934N500
Cusip 60934N872
1022004 (3/97)
