GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
(A PORTFOLIO OF MONEY MARKET OBLIGATIONS TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
The Institutional Shares of Government Obligations Tax-Managed Fund (the
"Fund") offered by this prospectus represent interests in a portfolio of
Money Market Obligations Trust (the "Trust"), an open-end management
investment company (a mutual fund). The Fund invests in short-term U.S.
government securities to provide current income consistent with stability of
principal and liquidity. The Fund's investment strategy is intended to
enable the Fund to provide shareholders with dividends that are exempt from
state and local income taxation to the extent permissible by federal and
state law. Unless otherwise exempt, shareholders are required to pay federal
income tax on any dividends.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY
BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK AND ARE NOT INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY.
INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL. THE FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF
$1.00 PER SHARE; THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO
SO.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Statement of Additional Information dated
September 30, 1996, with the Securities and Exchange Commission ("SEC"). The
information contained in the Statement of Additional Information is
incorporated by reference into this prospectus. You may request a copy of
the Statement of Additional Information or a paper copy of this prospectus,
if you have received your prospectus electronically, free of charge by
calling 1-800-341-7400. To obtain other information, or make inquiries about
the Fund, contact the Fund at the address listed in the back of this
prospectus. The Statement of Additional Information, material incorporated
by reference into this document, and other information regarding the Fund is
maintained electronically with the SEC at Internet Web site
(http://www.sec.gov.).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated September 30, 1996 (revised February 13, 1997)
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY OF FUND EXPENSES 1
FINANCIAL HIGHLIGHTS --
INSTITUTIONAL SHARES 2
GENERAL INFORMATION 3
INVESTMENT INFORMATION 3
Investment Objective 3
Investment Policies 3
Investment Limitations 4
TRUST INFORMATION 5
Management of the Trust 5
Distribution of Institutional Shares 6
Administration of the Fund 6
NET ASSET VALUE 6
HOW TO PURCHASE SHARES 7
HOW TO REDEEM SHARES 8
ACCOUNT AND SHARE INFORMATION 9
TAX INFORMATION 9
Federal Income Tax 9
State and Local Taxes 10
OTHER CLASSES OF SHARES 10
PERFORMANCE INFORMATION 10
FINANCIAL HIGHLIGHTS --
INSTITUTIONAL SERVICE SHARES 11
FINANCIAL STATEMENTS 12
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
19
ADDRESSES 20
</TABLE>
SUMMARY OF FUND EXPENSES
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price) None
Maximum Sales Charge Imposed on Reinvested Dividends
(as a percentage of offering price) None
Contingent Deferred Sales Charge (as a percentage of original purchase price or
redemption proceeds, as applicable) None
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None
</TABLE>
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<TABLE>
<S> <C> <C>
Management Fee (after waiver)(1) 0.06%
12b-1 Fee None
Total Other Expenses 0.14%
Shareholder Services Fee (after waiver)(2) 0.00%
Total Operating Expenses(3) 0.20%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
0.20%.
(2) The shareholder services fee has been reduced to reflect the voluntary
waiver of the shareholder services fee. The shareholder service provider
can terminate this voluntary waiver at any time at its sole discretion.
The maximum shareholder services fee is 0.25%.
(3) The total operating expenses in the table above are based on expenses
expected during the fiscal year ending July 31, 1997. The total operating
expenses would be 0.59% absent the voluntary waivers of a portion of the
management fee and the shareholder services fee. The total operating
expenses were 0.17% for the fiscal year ended July 31, 1996 and would have
been 0.61% absent the voluntary waivers of a portion of the management fee
and the shareholder services fee.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Institutional Shares of the
Fund will bear, either directly or indirectly. For more complete
descriptions of the various costs and expenses, see "Trust Information."
Wire-transferred redemptions of less than $5,000 may be subject to
additional fees.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and
(2) redemption at the end of each time period $2 $6 $11 $26
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
FINANCIAL HIGHLIGHTS -- INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Independent Public Accountants on page
19.
<TABLE>
<CAPTION>
YEAR ENDED
JULY 31,
1996 1995(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.05 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.05) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
TOTAL RETURN(B) 5.50% 0.94%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.17% 0.20%*
Net investment income 5.28% 5.78%*
Expense waiver/reimbursement(c) 0.44% 0.65%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $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)
GENERAL INFORMATION
The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated October 3, 1988. The Declaration of Trust permits
the Trust to offer separate series of shares representing interests in
separate portfolios of securities. The shares in any one portfolio may be
offered in separate classes. With respect to this Fund, as of the date of
this prospectus, the Board of Trustees has established two classes of shares
known as Institutional Shares and Institutional Service Shares. This
prospectus relates only to Institutional Shares of the Fund, which are
designed primarily for entities holding shares in an agency or fiduciary
capacity, financial institutions, financial intermediaries, and
institutional investors as a convenient means of accumulating an interest in
a professionally managed, diversified portfolio investing only in short-term
U.S. government securities. A minimum initial investment of $1,000,000 is
required.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
INVESTMENT INFORMATION
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current income consistent
with stability of principal and liquidity. This investment objective cannot
be changed without shareholder approval. While there is no assurance that
the Fund will achieve its investment objective, it endeavors to do so by
complying with the diversification and other requirements of Rule 2a-7 under
the Investment Company Act of 1940 which regulates money market mutual funds
and by following the investment policies described in this prospectus.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing only in a portfolio
of U.S. government securities maturing in 13 months or less. The average
maturity of the securities in the Fund's portfolio, computed on a
dollar-weighted basis, will be 90 days or less. Unless indicated otherwise,
the investment policies may be changed by the Board of Trustees without
shareholder approval. Shareholders will be notified before any material
change in these policies becomes effective.
The Fund will limit its investments to investments which, if owned directly,
pay interest exempt from state personal income tax. Therefore, dividends
paid by the Fund may be exempt from state personal income tax.
ACCEPTABLE INVESTMENTS. The Fund invests only in U.S. government securities.
These instruments are either issued or guaranteed by the U.S. government,
its agencies, or instrumentalities. These securities include, but are not
limited to:
* direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds;
* notes, bonds, and discount notes issued or guaranteed by U.S. government
agencies and instrumentalities, supported by the full faith and credit of
the United States; and
* notes, bonds, and discount notes of other U.S. government agencies or
instrumentalities which receive or have access to Federal funding.
Some obligations issued or guaranteed by agencies or instrumentalities of
the U.S. government are backed by the full faith and credit of the U.S.
Treasury. No assurances can be given that the U.S. government will provide
financial support to other agencies or instrumentalities, since it is not
obligated to do so. These instrumentalities are supported by:
* the issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;
* discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or
* the credit of the agency or instrumentality.
AGENCY MASTER DEMAND NOTES. The Fund may enter into master demand notes with
various federal agencies and instrumentalities. Under a master demand note,
the Fund has the right to increase or decrease the amount of the note on a
daily basis within specified maximum and minimum amounts. Master demand
notes also normally provide for full or partial repayment upon seven or more
days notice by either the Fund or the borrower and bear interest at a
variable rate. The Fund relies on master demand notes, in part, to provide
daily liquidity. To the extent that the Fund cannot obtain liquidity through
master demand notes, it may be required to maintain a larger cash position,
invest more assets in securities with current maturities or dispose of
assets at a gain or loss to maintain sufficient liquidity.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase
securities on a when-issued or delayed delivery basis. These transactions
are arrangements in which the Fund purchases securities with payment and
delivery scheduled for a future time. The seller's failure to complete these
transactions may cause the Fund to miss a price or yield considered to be
advantageous. Settlement dates may be a month or more after entering into
these transactions, and the market values of the securities purchased may
vary from the purchase prices. Accordingly, the Fund may pay more or less
than the market value of the securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the adviser
deems it appropriate to do so. In addition, the Fund may enter into
transactions to sell its purchase commitments to third parties at current
market values and simultaneously acquire other commitments to purchase
similar securities at later dates. The Fund may realize short-term profits
or losses upon the sale of such commitments.
INVESTMENT LIMITATIONS
The Fund will not borrow money directly or through reverse repurchase
agreements (arrangements in which the Fund sells a money market instrument
for a percentage of its cash value with an agreement to buy it back on a set
date) or pledge securities except, under certain circumstances, the Fund may
borrow money and engage in reverse repurchase transactions in amounts up to
one-third of the value of its total assets and pledge assets to secure such
borrowings.
The above investment limitation cannot be changed without shareholder
approval. The following limitation, however, may be changed by the Trustees
without shareholder approval. Shareholders will be notified before any
material change in this limitation becomes effective.
The Fund will not invest more than 10% of its net assets in illiquid
securities.
TRUST INFORMATION
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the Fund's business affairs and for exercising
all the Trust's powers except those reserved for the shareholders. An
Executive Committee of the Board of Trustees handles the Board's
responsibilities between meetings of the Board.
INVESTMENT ADVISER. Investment decisions for the Fund are made by Federated
Administrative Services, the Fund's investment adviser, subject to direction
by the Trustees. The adviser continually conducts investment research and
supervision for the Fund and is responsible for the purchase and sale of
portfolio instruments.
ADVISORY FEES. The adviser receives an annual investment advisory fee equal
to .20% of the Fund's average daily net assets. The adviser has undertaken
to reimburse the Fund up to the amount of the advisory fee for operating
expenses in excess of limitations established by certain states. Also, the
adviser may voluntarily choose to waive a portion of its fee or reimburse
other expenses of the Fund, but reserves the right to terminate such waiver
or reimbursement at any time at its sole discretion.
ADVISER'S BACKGROUND. Federated Administrative Services, a Delaware business
trust, organized on April 11, 1989, is a registered investment adviser under
the Investment Advisers Act of 1940. It is a subsidiary of Federated
Investors. All of the Class A (voting) shares of Federated Investors are
owned by a trust, the trustees of which are John F. Donahue, Chairman and
Trustee of Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son,
J. Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Administrative Services and other subsidiaries of Federated
Investors serve as investment advisers to a number of investment companies
and private accounts. Certain other subsidiaries also provide administrative
services to a number of investment companies. With over $80 billion invested
across more than 250 funds under management and/or administration by its
subsidiaries, as of December 31, 1995, Federated Investors is one of the
largest mutual fund investment managers in the United States. With more than
1,800 employees, Federated continues to be led by the management who founded
the company in 1955. Federated funds are presently at work in and through
4,000 financial institutions nationwide. More than 100,000 investment
professionals have selected Federated funds for their clients.
Both the Trust and the adviser have adopted strict codes of ethics governing
the conduct of all employees who manage the Fund and its portfolio
securities. These codes recognize that such persons owe a fiduciary duty to
the Fund's shareholders and must place the interests of shareholders ahead
of the employees' own interests. Among other things, the codes: require
preclearance and periodic reporting of personal securities transactions;
prohibit personal transactions in securities being purchased or sold, or
being considered for purchase or sale, by the Fund; prohibit purchasing
securities in initial public offerings; and prohibit taking profits on
securities held for less than sixty days. Violations of the codes are
subject to review by the Trustees, and could result in severe penalties.
DISTRIBUTION OF INSTITUTIONAL SHARES
Federated Securities Corp. is the principal distributor for Institutional
Shares of the Fund. It is a Pennsylvania corporation organized on November
14, 1969, and is the principal distributor for a number of investment
companies. Federated Securities Corp. is a subsidiary of Federated
Investors.
State securities laws may require certain financial institutions such as
depository institutions to register as dealers.
SHAREHOLDER SERVICES. The Fund has entered into a Shareholder Services
Agreement with Federated Shareholder Services, a subsidiary of Federated
Investors, under which the Fund may make payments up to .25% of the average
daily net asset value of Fund shares, computed at an annual rate, to obtain
certain personal services for shareholders and provide maintenance of
shareholder accounts ("shareholder services"). From time to time and for
such periods as deemed appropriate, the amount stated above may be reduced
voluntarily.
Under the Shareholder Services Agreement, Federated Shareholder Services
will either perform shareholder services directly or will select financial
institutions to perform shareholder services. Financial institutions will
receive fees based upon shares owned by their clients or customers. The
schedules of such fees and the basis upon which such fees will be paid will
be determined from time to time by the Fund and Federated Shareholder
Services.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Services Company, a subsidiary of
Federated Investors, provides administrative personnel and services
(including certain legal and financial reporting services) necessary to
operate the Fund at an annual rate as which relates to the average aggregate
daily net assets of all funds advised by affiliates of Federated Investors
specified below:
<TABLE>
<CAPTION>
AVERAGE AGGREGATE
MAXIMUM FEE DAILY NET ASSETS
<C> <C>
.15% on the first $250 million
.125% on the next $250 million
.10% on the next $250 million
.075% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Services Company may choose voluntarily to waive a portion of its
fee.
NET ASSET VALUE
The Fund attempts to stabilize the net asset value of shares at $1.00 by
valuing the portfolio securities using the amortized cost method. The net
asset value per share is determined by subtracting liabilities attributable
to Institutional Shares from the value of Fund assets attributable to
Institutional Shares, and dividing the remainder by the number of shares
outstanding. The Fund cannot guarantee that its net asset value will always
remain at $1.00 per share.
The net asset value is determined at 4:00 p.m., (Eastern time), and as of
the close of trading (normally 4:00 p.m., Eastern time) on the New York
Stock Exchange, Monday through Friday, except on New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day, and Christmas Day.
HOW TO PURCHASE SHARES
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange is open for business. Shares may be purchased either by wire or by
check. The Fund reserves the right to reject any purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone. The
minimum initial investment is $1,000,000. However, an account may be opened
with a smaller amount as long as the minimum is reached within one year of
opening the account. Financial institutions may impose different minimum
investment requirements on their customers.
PURCHASING SHARES BY WIRE. Shares may be purchased by Federal Reserve wire
by calling the Fund before 1:00 p.m. (Eastern time) to place an order. The
order is considered received immediately. Payment by federal funds must be
received before 3:00 p.m. (Eastern time) that day. Federal funds should be
wired as follows: Federated Shareholder Services Company, c/o State Street
Bank and Trust Company, Boston, MA; Attention: EDGEWIRE; For Credit to:
Government Obligations Tax-Managed Fund -- Institutional Shares; Fund Number
(this number can be found on the account statement or by contacting the
Fund); Group Number or Order Number; Nominee or Institution Name; and ABA
Number 011000028. Shares cannot be purchased by wire on holidays when wire
transfers are restricted. Questions on wire purchases should be directed to
your shareholder services representative at the telephone number listed on
your account statement.
PURCHASING SHARES BY CHECK. Shares may be purchased by sending a check to
Federated Shareholder Services Company, P.O. Box 8600, Boston, MA
02266-8600. The check should be made payable to Government Obligations
Tax-Managed Fund -- Institutional Shares. Orders by mail are considered
received when payment by check is converted into federal funds (normally the
business day after the check is received), and shares begin earning
dividends the next day.
INVEST-BY-PHONE. Once an account has been opened, a shareholder may use
invest-by-phone for investments if an authorization form has been filed with
Federated Shareholder Services Company, the transfer agent for shares of the
Fund. Approximately two weeks after sending the form to Federated
Shareholder Services Company, the shareholder may call Federated Shareholder
Services Company to purchase shares. Federated Shareholder Services Company
will send a request for monies to the shareholder's commercial bank, savings
bank, or credit union ("bank") via the Automated Clearing House. The
shareholder's bank, which must be an Automated Clearing House member, will
then forward the monies to Federated Shareholder Services Company. The
purchase is normally entered the next business day after the initial phone
request. For further information and an application, call the Fund.
SUBACCOUNTING SERVICES. Financial institutions are encouraged to open single
master accounts. A subaccounting system is available through the transfer
agent to minimize internal recordkeeping requirements. The transfer agent
charges a fee based on the level of subaccounting services rendered.
Financial institutions may charge or pass through subaccounting fees as part
of or in addition to normal trust or agency account fees. They may also
charge fees for other services provided which may be related to the
ownership of Fund shares. This prospectus should, therefore, be read
together with any agreement between the customer and the financial
institution with regard to the services provided, the fees charged for those
services, and any restrictions and limitations imposed. State securities
laws may require certain financial institutions such as depository
institutions to register as dealers.
HOW TO REDEEM SHARES
Shares are redeemed at their net asset value next determined after Federated
Shareholder Services Company receives the redemption request. Redemptions
will be made on days on which the Fund computes its net asset value.
Redemption requests must be received in proper form and can be made as
described below.
REDEEMING SHARES BY TELEPHONE. Redemptions in any amount may be made by
calling the Fund provided the Fund has a properly completed authorization
form. These forms can be obtained from Federated Securities Corp. Proceeds
from redemption requests received before 1:00 p.m. (Eastern time) will be
wired the same day to the shareholder's account at a domestic commercial
bank which is a member of the Federal Reserve System, but will not include
that day's dividend. Proceeds from redemption requests received after that
time include that day's dividend but will be wired the following business
day. Proceeds from redemption requests on holidays when wire transfers are
restricted will be wired the following business day. Questions about
telephone redemptions on days when wire transfers are restricted should be
directed to your shareholder services representative at the telephone number
listed on your account statement.
Telephone instructions may be recorded and if reasonable procedures are not
followed by the Fund, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
In the event of drastic economic or market changes, a shareholder may
experience difficulty in redeeming by telephone. If this occurs, "Redeeming
Shares By Mail" should be considered. If at any time the Fund shall
determine it necessary to terminate or modify the telephone redemption
privilege, shareholders would be promptly notified.
REDEEMING SHARES BY MAIL. Shares may be redeemed in any amount by mailing a
written request to: Federated Shareholder Services Company, P.O. Box 8600,
Boston, MA 02266-8600. If share certificates have been issued, they should
be sent unendorsed with the written request by registered or certified mail
to the address noted above.
The written request should state: the Fund name and the class designation;
the account name as registered with the Fund; the account number; and the
number of shares to be redeemed or the dollar amount requested. All owners
of the account must sign the request exactly as the shares are registered.
Normally, a check for the proceeds is mailed within one business day, but in
no event more than seven days, after the receipt of a proper written
redemption request. Dividends are paid up to and including the day that a
redemption request is processed.
Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Fund or a redemption payable other than
to the shareholder of record must have their signatures guaranteed by a
commercial or savings bank, trust company or savings association whose
deposits are insured by an organization which is administered by the Federal
Deposit Insurance Corporation; a member firm of a domestic stock exchange;
or any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934. The Fund does not accept signatures guaranteed by a
notary public.
ACCOUNT AND SHARE INFORMATION
DIVIDENDS. Dividends are declared daily and paid monthly. Dividends are
automatically reinvested on payment dates in additional shares of the Fund
unless cash payments are requested by writing to the Fund. Shares purchased
by wire before 3:00 p.m. (Eastern time) begin earning dividends that day.
Shares purchased by check begin earning dividends the day after the check is
converted into federal funds.
CAPITAL GAINS. The Fund does not expect to realize any capital gains or
losses. If capital gains or losses were to occur, they could result in an
increase or decrease in dividends. The Fund will distribute in cash or
additional shares any realized net long-term capital gains at least once
every 12 months.
CERTIFICATES AND CONFIRMATIONS. As transfer agent for the Fund, Federated
Shareholder Services Company maintains a share account for each shareholder.
Share certificates are not issued unless requested by contacting the Fund or
Federated Shareholder Services Company in writing. Monthly confirmations are
sent to report all transactions as well as dividends paid during the month.
ACCOUNTS WITH LOW BALANCES. Due to the high cost of maintaining accounts
with low balances, the Fund may redeem shares in any account, except
accounts maintained by retirement plans, and pay the proceeds to the
shareholder if the account balance falls below a required minimum value of
$1,000,000 due to shareholder redemptions. Before shares are redeemed to
close an account, the shareholder is notified in writing and allowed 30 days
to purchase additional shares to meet the minimum requirement.
VOTING RIGHTS. Each share of the Trust owned by a shareholder gives that
shareholder one vote in Trustee elections and other matters submitted to
shareholders for vote. All shares of all classes of each portfolio in the
Trust have equal voting rights, except that in matters affecting only a
particular portfolio or class, only shareholders of that portfolio or class
are entitled to vote. The Trust is not required to hold annual shareholder
meetings. Shareholder approval will be sought only for certain changes in
the Trust's or the Fund's operation and for election of Trustees under
certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting shall be called by the Trustees upon the written
request of shareholders owning at least 10% of the outstanding shares of the
Trust.
TAX INFORMATION
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet
requirements of the Internal Revenue Code applicable to regulated investment
companies and to receive the special tax treatment afforded to such
companies.
Unless otherwise exempt, shareholders are required to pay federal income tax
on any dividends and other distributions received. This applies whether
dividends and distributions are received in cash or as additional shares.
STATE AND LOCAL TAXES
In the opinion of Houston, Houston, & Donnelly, counsel to the Trust, Fund
shares may be subject to personal property taxes imposed by counties,
municipalities, and school districts in Pennsylvania to the extent that the
portfolio securities in the Fund would be subject to such taxes if owned
directly by residents of those jurisdictions.
The Fund will limit its investments to those which, if owned directly, pay
interest exempt from state personal income tax. However, under the laws of
some states, the net investment income distributed by the Fund may be
taxable to shareholders. Shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax
laws.
OTHER CLASSES OF SHARES
The Fund also offers other classes. Institutional Service Shares are sold at
net asset value primarily to financial institutions, financial
intermediaries and institutional investors, and are subject to a minimum
initial investment of $1,000,000.
All classes are subject to certain of the same expenses.
Institutional Service Shares are distributed with no 12b-1 fees, but are
subject to shareholder services fees.
Expense differences between classes may affect the performance of each
class.
To obtain more information and a prospectus for any other class, investors
may call 1-800-341-7400.
PERFORMANCE INFORMATION
From time to time, the Fund advertises its yield, and effective yield. The
performance figures will be calculated separately for each class of shares.
Yield represents the annualized rate of income earned on an investment over
a seven-day period. It is the annualized dividends earned during the period
on an investment shown as a percentage of the investment. The effective
yield is calculated similarly to the yield, but when annualized, the income
earned by an investment is assumed to be reinvested daily. The effective
yield will be slightly higher than the yield because of the compounding
effect of this assumed reinvestment.
Total return represents the change, over a specified period of time, in the
value of an investment in the shares after reinvesting all income
distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.
From time to time, advertisements for the Fund may refer to ratings,
rankings, and other information in certain financial publications and/or
compare the Fund's performance to certain indices.
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
FINANCIAL HIGHLIGHTS -- INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Independent Public Accountants on page
19.
<TABLE>
<CAPTION>
YEAR ENDED
JULY 31,
1996 1995(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.05 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.05) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
TOTAL RETURN(B) 5.23% 0.95%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.42% 0.45%*
Net investment income 5.00% 5.55%*
Expense waiver/reimbursement(c) 0.19% 0.40%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $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
PORTFOLIO OF INVESTMENTS
JULY 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
GOVERNMENT AGENCIES -- 94.7%
$ 4,000,000 Federal Farm Credit Bank Notes, 5.40%-5.60%, 12/2/1996-6/3/1997 $ 3,995,915
24,900,000 (a)Federal Farm Credit Bank, Discount Notes, 5.29%-5.36%,
8/9/1996-9/13/1996 24,845,992
9,000,000 (b)Federal Farm Credit Bank, Floating Rate Notes, 5.32%, 8/1/1996 8,993,010
300,730,000 (a)Federal Home Loan Bank, Discount Notes, 5.33%-5.72%,
8/1/1996-1/22/1997 299,239,458
21,600,000 (b)Federal Home Loan Bank, Floating Rate Notes, 5.27%-5.33%,
8/1/1996-8/23/1996 21,583,910
2,500,000 Student Loan Marketing Association, 5.62%, 6/30/1997 2,491,860
15,000,000 (a)Student Loan Marketing Association, Discount Notes, 5.50%,
9/30/1996 14,866,125
56,565,000 (b)Student Loan Marketing Association, Floating Rate Notes,
5.40%-5.69%, 8/6/1996 56,516,451
51,000,000 (b)Student Loan Marketing Association, Floating Rate Master Notes,
5.39%, 8/6/1996 51,000,000
20,000,000 (a)Tennessee Valley Authority, Discount Note, 5.33%, 8/7/1996 19,982,533
TOTAL GOVERNMENT AGENCIES 503,515,254
U.S. TREASURY OBLIGATIONS -- 9.5%
U.S. TREASURY BILLS -- 2.4%
13,000,000 (a)5.00%-5.10%, 9/19/1996-11/14/1996 12,846,865
U.S. TREASURY NOTES -- 7.1%
37,750,000 6.50%-8.00%, 9/30/1996-3/31/1997 37,953,240
TOTAL U.S. TREASURY OBLIGATIONS 50,800,105
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 554,315,359
</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
($531,940,498) at July 31, 1996.
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1996
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $554,315,359
Cash 388,596
Income receivable 1,646,780
Deferred expenses 129,605
Total assets 556,480,340
LIABILITIES:
Payable for investments purchased $ 22,505,304
Income distribution payable 1,764,278
Accrued expenses 270,260
Total liabilities 24,539,842
NET ASSETS for 531,940,498 shares outstanding $531,940,498
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$199,242,851 / 199,242,851 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$332,697,647 / 332,697,647 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1996
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 18,814,183
EXPENSES:
Investment advisory fee $ 692,278
Administrative personnel and services fee 261,681
Custodian fees 63,863
Transfer and dividend disbursing agent fees and expenses 40,487
Directors'/Trustees' fees 2,277
Auditing fees 8,581
Legal fees 2,141
Portfolio accounting fees 86,999
Shareholder services fee -- Institutional Shares 315,936
Shareholder services fee -- Institutional Service Shares 549,412
Share registration costs 69,893
Printing and postage 25,071
Insurance premiums 4,979
Taxes 175
Miscellaneous 6,291
Total expenses 2,130,064
Waivers --
Waiver of investment advisory fee $ (664,948)
Waiver of shareholder services fee -- Institutional Shares (315,936)
Total waivers (980,884)
Net expenses 1,149,180
Net investment income $ 17,665,003
</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>
YEAR ENDED JULY 31,
1996 1995(A)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS --
Net investment income $ 17,665,003 $ 679,985
DISTRIBUTIONS TO SHAREHOLDERS --
Distributions from net investment income:
Institutional Shares (6,666,528) (22,005)
Institutional Service Shares (10,998,475) (657,980)
Change in net assets resulting from distributions to shareholders (17,665,003) (679,985)
SHARE TRANSACTIONS --
Proceeds from sale of shares 1,393,097,071 95,754,802
Net asset value of shares issued to shareholders in payment of
distributions declared 2,785,115 304,922
Cost of shares redeemed (943,176,795) (16,824,617)
Change in net assets resulting from share transactions 452,705,391 79,235,107
Change in net assets 452,705,391 79,235,107
NET ASSETS:
Beginning of period 79,235,107 --
End of period $ 531,940,498 $ 79,235,107
</TABLE>
(a) For the period from May 30, 1995 (date of initial public investment) to
July 31, 1995.
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996
1. ORGANIZATION
Money Market Obligations Trust (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act") as an open-end,
management investment company. The Trust consists of six portfolios. The
financial statements included herein are only those of Government
Obligations Tax-Managed Fund (the "Fund"), a diversified portfolio. The
financial statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest is
limited to the portfolio in which shares are held. The 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 using the straight-line method over a period of 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 July 31, 1996, capital paid-in aggregated
$531,940,498. Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
INSTITUTIONAL SHARES 1996 1995(A)
<S> <C> <C>
Shares sold 570,331,953 4,997,518
Shares issued to shareholders in payment of distributions declared 2,591,398 2
Shares redeemed (376,750,642) (1,927,378)
Net change resulting from Institutional Shares transactions 196,172,709 3,070,142
</TABLE>
(a) For the period from June 2, 1995 (date of initial public investment) to
July 31, 1995.
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
INSTITUTIONAL SERVICE SHARES 1996 1995(B)
<S> <C> <C>
Shares sold 822,765,118 90,757,284
Shares issued to shareholders in payment of distributions declared 193,717 304,920
Shares redeemed (566,426,153) (14,897,239)
Net change resulting from Institutional Service Shares transactions 256,532,682 76,164,965
Net change resulting from share transactions 452,705,391 79,235,107
</TABLE>
(b) For the period from May 30, 1995 (date of initial public investment) to
July 31, 1995.
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE -- Federated Administrative Services, 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 also maintains the Fund's accounting
records for which it receives a fee. The fee is based on the level of the
Fund's average daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES -- Organizational expenses of $26,061 were 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 July 31, 1996, the Fund paid $2,027 pursuant to
this agreement.
GENERAL -- Certain of the Officers and Trustees of the Trust are Officers
and Directors or Trustees of the above companies.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees of
MONEY MARKET OBLIGATIONS TRUST
(Government Obligations Tax-Managed Fund)
We have audited the accompanying statement of assets and liabilities of
Government Obligations Tax- Managed Fund (an investment portfolio of Money
Market Obligations Trust, a Massachusetts business trust), including the
schedule of portfolio investments, as of July 31, 1996, the related
statement of operations for the year then ended, the statement of changes in
net assets and the financial highlights for the year then ended and for the
period from May 30, 1995 (date of initial public investment) to July 31,
1995. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of July 31, 1996, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Government Obligations Tax-Managed Fund (an investment portfolio of Money
Market Obligations Trust) as of July 31, 1996, the results of its operations
for the year then ended, the changes in its net assets and its financial
highlights for the year then ended and for the period from May 30, 1995
(date of initial public investment) to July 31, 1995, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania
August 20, 1996
ADDRESSES
Government Obligations Tax-Managed Fund
Institutional Shares Federated Investors Tower
Pittsburgh, PA 15222-3779
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, PA 15222-3779
Investment Adviser
Federated Administrative Services Federated Investors Tower
Pittsburgh, PA 15222-3779
Custodian
State Street Bank and c/o Federated Services Company
Trust Company P.O. Box 8600
Boston, MA 02266-8600
Transfer Agent and Dividend Disbursing Agent
Federated Shareholder P.O. Box 8600
Services Company Boston, MA 02266-8600
Independent Public Accountants
Arthur Andersen LLP 2100 One PPG Place
Pittsburgh, PA 15222
GOVERNMENT OBLIGATIONS
TAX-MANAGED FUND
(A PORTFOLIO OF MONEY MARKET
OBLIGATIONS TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
A Portfolio of
Money Market Obligations Trust,
an Open-End Management
Investment Company
Prospectus dated September 30, 1996
(revised February 13, 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 60934N856
G01140-01-IS (2/97)
