PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Automated
Cash Management Trust, a portfolio of Money Market Obligations Trust. This
report covers the first half of the fund's fiscal year, which is the six-month
period ended January 31, 1998. It begins with an investment review of the
short-term market from the fund's portfolio manager. Following the investment
review are the fund's portfolio of investments and financial statements.
Over the six-month reporting period, dividends paid to shareholders of the
fund's Institutional Service Shares and Cash II Shares each totaled $0.03 per
share. At the end of the reporting period, net assets totaled $2.2 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 per share.* At the end of the reporting period, the fund's assets were
invested in commercial paper (30.4%), variable rate instruments (25.8%),
repurchase agreements (23.0%), short-term notes (10.1%), time deposits (6.1%),
and certificates of deposit (4.8%).
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, 1998
* Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or guaranteed by the U.S. government.
INVESTMENT REVIEW
Automated Cash Management Trust invests in money market instruments maturing in
thirteen months or less. The average maturity of these securities, computed on a
dollarweighted 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.
Growth during 1997 continued at an above-average pace, slowing only moderately
during the third quarter. Specifically, third quarter gross domestic product
("GDP") registered 3.1% while fourth quarter GDP climbed back up to 3.9%.
Despite the high growth, inflation remained subdued by all measures. The
consumer price index rose just 1.6% on an annualized basis for the six month
period ended January 31, 1998. For the same time period, the producer price
index actually declined 0.9%, due mostly to a decline in energy prices, while
the employment cost index grew at an annualized 3.7% pace during the second half
of 1997.
Thirty-day commercial paper started the reporting period at 5.53% on August 1,
1997, and then rose as high as 5.98% on December 29, 1997, reflecting year-end
technical pressures. Rates fell back off again in January 1998 with 30-day
commercial paper settling in at the 5.50% level.
The money market yield curve flattened throughout the reporting period.
One-month commercial paper rates declined one basis point while six-month rates
declined 14 basis points reflecting the concern in the market about the Asian
contagion and its overall effect on U.S. growth.
The target average maturity range for the fund remained 35-45 days throughout
the reporting period, reflecting neutral economic and monetary sentiment. In
structuring the fund, there was 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-month period ended January 31, 1998, the net assets of the fund
increased from $2.1 to $2.2 billion while the 7-day net yield increased from
5.13% to 5.18% for the Institutional Service Shares,* and from 4.96% to 5.01%
for Cash II Shares.* The effective average maturity of the fund on January 31,
1998, was 42 days.
* Performance quoted represents past performance and is not indicative of
future results. Yield will vary. Yields quoted for money market funds most
closely reflect the fund's current earnings.PORTFOLIO OF INVESTMENTS
AUTOMATED CASH MANAGEMENT TRUST
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C>
(a) Commercial Paper--30.4%
Banking--9.0%
$ 5,000,000 ABN AMRO Bank N.V.,Amsterdam, 5.687%, 2/5/1998 $ 4,996,928
20,000,000 Abbey National N.A.Corp.,
(Guaranteed by Abbey National Bank PLC, London), 5.708% - 5.709%,
2/25/1998 - 3/3/1998 19,916,750
55,000,000 Aspen Funding Corp., (Guaranteed by Deutsche Bank, AG),
5.530% - 5.855%, 2/17/1998 - 6/16/1998 (Insurance from MBIA) 54,274,929
15,500,000 Bank of Nova Scotia, Toronto, 5.501%,4/9/1998 15,343,215
15,000,000 Cregem North America, Inc., (Guaranteed by Credit Communal
de Belgique, Brussles), 5.762%, 2/19/1998 14,957,400
10,000,000 Den Danske Corp., Inc., (Guaranteed by Den Danske Bank A/S),
5.716%, 2/27/1998 9,959,881
50,000,000 J.P. Morgan & Co., Inc., 5.608%,4/6/1998 49,508,444
10,000,000 Lloyds Bank PLC, London, 5.709%, 3/3/1998 9,953,750
20,000,000 Svenska Handelsbanken, Inc., (Guaranteed by Svenska
Handelsbanken, Stockholm), 5.700% - 5.740%, 2/2/1998 - 3/13/1998 19,936,461
Total 198,847,758
Brokerage--1.8%
15,000,000 Merrill Lynch & Co., Inc.,5.514%, 4/13/1998 14,839,067
25,000,000 Morgan Stanley Group, Inc., 5.834% - 5.854%, 3/11/1998 - 3/18/1998 24,836,833
Total 39,675,900
Finance - Automotive--2.7%
25,000,000 Ford Motor Credit Corp., 5.568%, 4/10/1998 24,740,750
35,000,000 General Motors Acceptance Corp., 5.643%, 2/2/1998 34,994,517
Total 59,735,267
Finance - Commercial--12.4%
10,000,000 Alpha Finance Corp., Ltd., 5.742%, 3/12/1998 9,939,550
45,000,000 Asset Securitization Cooperative Corp., 5.809% - 5.841%,
3/9/1998 - 3/23/1998 44,691,387
47,000,000 Beta Finance, Inc., 5.700% - 5.783%, 2/2/1998 - 3/12/1998 46,859,509
10,000,000 CIT Group Holdings, Inc., 5.654%, 4/3/1998 9,906,806
24,000,000 Falcon Asset Securitization Corp., 5.687% - 5.814%,
2/18/1998 - 6/22/1998 23,820,220
80,000,000 General Electric Capital Corp.,5.546% - 5.823%, 3/2/1998 - 8/17/1998 78,575,396
</TABLE>
AUTOMATED CASH MANAGEMENT TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(a) Commercial Paper--continued
Finance - Commercial--
<C> <S> <C>
$ 21,188,000 Greenwich Funding Corp., 5.805% - 5.848%, 2/25/1998 - 6/8/1998 $ 20,932,920
24,000,000 Receivables Capital Corp., 5.514% - 5.776%, 2/6/1998 - 2/12/1998 23,967,978
15,575,000 Sheffield Receivables Corp., 5.577%, 2/6/1998 15,562,994
Total 274,256,760
Finance - Retail--2.5%
55,000,000 New Center Asset Trust, A1+/P1 Series, 5.566% - 5.716%,
2/27/1998 - 4/8/1998 54,518,357
Insurance--0.4%
10,000,000 CXC, Inc., 5.762%, 2/10/1998 9,985,800
Machinery,Equipment, Auto--0.7%
15,000,000 Eaton Corp., 5.709%, 2/2/1998 14,997,688
Oil & Oil Finance--0.5%
11,000,000 Chevron Transport Corp., (Guaranteed by Chevron Corp.),
5.709% - 5.730%, 3/4/1998 - 3/20/1998 10,932,543
Transportation--0.4%
8,000,000 BAA PLC, 5.710%, 2/4/1998 7,996,247
TOTAL COMMERCIAL PAPER 670,946,320
Short-Term Notes--10.1%
Banking--4.5%
60,000,000 Bank of Boston, Connecticut, 5.840%, 6/1/1998 - 6/16/1998
60,000,000 8,410,000 SALTS II Cayman Islands Corp., Series 1997-15 (Bankers
Trust
International, PLC Swap Agreement) 5.988%, 3/19/1998 8,410,000
10,000,000 SALTS III Cayman Island Corp., Series 1998-1 (Bankers Trust
International, PLC Swap Agreement), 5.725%, 7/23/1998 10,000,000
20,000,000 SALTS III Cayman Island Corp., Series 1997-13 (Bankers Trust
International, PLC Swap Agreement) 6.038%, 6/18/1998 20,000,000
Total 98,410,000
Brokerage--0.9%
20,000,000 Goldman Sachs & Co., 5.600%, 4/27/1998 20,000,000
Finance - Automotive--0.8%
4,154,734 Arcadia Automobile Receivables Trust 1997-C,
Class A-1, 5.650%, 9/15/1998 4,154,734
1,053,142 Chase Manhattan Auto Owner Trust 1997-B,
Class A-1, 5.744%, 7/10/1998 1,053,142
13,630,385 MMCA Auto Owner Trust 1997-1, Class A-1, 5.630%, 11/15/1998 13,628,063
Total 18,835,939
</TABLE>
AUTOMATED CASH MANAGEMENT TRUST
<TABLE>
<CAPTION>
<C> <S> <C>
PRINCIPAL
AMOUNT VALUE
Short-Term Notes--continued
Finance - Commercial--0.2%
$ 5,000,000 (e)Triangle Funding Ltd., Series 1997-1 Class 1 5.594%,
11/16/1998 $ 5,000,000
Finance - Equipment--2.9%
15,962,352 Capita Equipment Receivables Trust 1997-1,
Class A-1, 5.800%, 12/15/1998 15,959,668
15,868,410 Caterpillar Financial Asset Trust 1997-B,
Class A-1, 5.805%, 11/25/1998 15,868,410
7,441,351 Copelco Capital Funding Corp. X 1997-A, Class A-1,
5.809%, 7/20/1998 7,441,351
25,000,000 Green Tree Lease Finance 1997-1 LLC, Class A-1, 5.906%,
1/23/1999 25,000,000
Total 64,269,429
Finance - Retail--0.4%
7,781,258 ContiMortgage Home Equity Loan Trust 1997-5, Class A-1,
5.906%, 1/15/1999 7,781,258
Insurance--0.4%
8,059,393 WFS Financial 1997-C Owner Trust, Class A-1, 5.710%, 9/20/1998 8,059,393
TOTAL SHORT-TERM NOTES 222,356,019
Certificates of Deposit--4.8%
Banking--4.8%
5,000,000 Bankers Trust Co., New York, 5.910%, 10/13/1998 4,998,873
10,000,000 Crestar Bank of Virginia, Richmond, 5.720%, 2/23/1998 10,000,119
25,000,000 Deutsche Bank, AG, 5.500%, 4/14/1998 25,000,000
65,000,000 Societe Generale, Paris,5.920% - 5.970%, 7/16/1998 - 10/15/1998 64,984,778
TOTAL CERTIFICATES OF DEPOSIT 104,983,770
(b) Variable Rate Instruments--25.8%
Banking--7.4%
6,000,000 Beverly California Corp., (PNC Bank, N.A. LOC), 5.601%, 2/2/1998 6,000,000
4,600,000 Development Authority of Richmond City, GA, (PNC Bank,
N.A. LOC), 5.601%, 2/2/1998 4,600,000
60,000,000 (e)Liquid Asset Backed Securities Trust, Series 1996-3,
(Westdeutsche Landesbank Girozentrale Swap Agreement),
5.614%, 2/17/1998 60,000,000
23,281,931 (e)Liquid Asset Backed Securities Trust, Series 1997-1,
(Westdeutsche Landesbank Girozentrale Swap Agreement),
5.594%, 2/17/1998 23,281,931
10,000,000 Long Lane Master Trust III, Series 1997-C, 5.780%, 4/30/1998 10,000,000
6,700,000 Massachusetts IFA, (Kendell Square), (PNC Bank, N.A. LOC),
5.630%, 2/5/1998 6,700,000
43,530,786 (e)Rabobank Optional Redemption Trust, Series 1997-101, 5.754%,
2/17/1998 43,530,786
2,734,000 Vista Funding Corp., Series 1996-A, (Bank One, Ohio, N.A. LOC),
5.580%, 2/5/1998 2,734,000
5,250,000 Wendys of Las Vegas and San Antonio, (Huntington National Bank,
Columbus, OH LOC), 5.580%, 2/4/1998 5,250,000
Total 162,096,717
</TABLE>
AUTOMATED CASH MANAGEMENT TRUST
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(b) Variable Rate Instruments--continued
Electrical Equipment--1.1%
<C> <S> <C>
$ 1,227,980 GE Engines RPP Trust - 1995-1, Series B, (Guaranteed by General
Electric Co.), 5.601%, 2/2/1998 $ 1,227,980
3,150,731 Marta Leasing Ltd., (Guaranteed by General Electric Co.),
5.601%, 2/2/1998 3,150,731
20,181,046 Northwest Airlines, Inc., (Guaranteed by General Electric Co.),
5.601%,2/2/1998 20,181,046
Total 24,559,757
Finance - Retail--3.2%
40,000,000 Associates Corp. of North America, 5.730%, 1/30/1998 39,982,118
30,000,000 Carco Auto Loan Master Trust 1993-2, (Series 1993-2 Class A1),
5.855%,2/17/1998 30,000,000
Total 69,982,118
Insurance--14.1%
94,500,000 General American Life Insurance Co., 5.820%, 2/23/1998 94,500,000
30,000,000 Jackson National Life Insurance Co., 5.699%, 2/1/1998 30,000,000
63,246,104 (e)Liquid Asset Backed Securities Trust, Series 1997-3 Senior Notes,
(Guaranteed by AMBAC), 5.876%, 3/27/1998 63,246,104
25,000,000 Peoples Security Life Insurance Company, 5.890%, 2/2/1998 25,000,000
25,000,000 SunAmerica Life Insurance Company, 5.810%, 9/15/1998 25,000,000
30,000,000 Transamerica Occidental Life Insurance Company, 5.781%, 2/6/1998 30,000,000
44,000,000 Travelers Insurance Company, 5.837%, 4/1/1998 44,000,000
Total 311,746,104
TOTAL VARIABLE RATE INSTRUMENTS 568,384,696
(a)Time Deposits--6.1%
Banking--6.1%
35,000,000 Mellon Bank N.A., Pittsburgh,5.625%, 2/2/1998 35,000,000
25,000,000 Royal Bank of Canada, Montreal,5.625%, 2/2/1998 25,000,000
25,000,000 Societe Generale, Paris, 5.625%, 2/2/1998 25,000,000
50,000,000 Toronto-Dominion Bank, 5.625%, 2/2/1998 50,000,000
TOTAL TIME DEPOSITS 135,000,000
(c)Repurchase Agreements--23.0%
100,000,000 Bear, Stearns and Co., 5.650%, dated 1/30/1998, due 2/2/1998 100,000,000
100,000,000 Goldman Sachs Group, LP, 5.650%, dated 1/30/1998, due 2/2/1998 100,000,000
106,500,000 HSBC Securities, Inc., 5.650%, dated 1/30/1998, due 2/2/1998 106,500,000
19,400,000 J.P. Morgan & Co., Inc.,5.580%, dated 1/30/1998, due 2/2/1998 19,400,000
40,000,000 Salomon Smith Barney Holdings, Inc., 5.650%,
dated 1/30/1998, due 2/2/1998 40,000,000
25,200,000 Societe Generale, New York, 5.600%, dated 1/30/1998,
due 2/2/1998 25,200,000
45,000,000 UBS Securities, Inc., 5.590%, dated 1/30/1998, due 2/2/1998 45,000,000
</TABLE>
<TABLE>
<CAPTION>
<C> <S> <C>
AUTOMATED CASH MANAGEMENT TRUST
PRINCIPAL
AMOUNT VALUE
(c)Repurchase Agreements--continued
$ 40,000,000 UBS Securities, Inc.,5.650%, dated 1/30/1998, due 2/2/1998 $ 40,000,000
30,000,000 (f)Chase Government Securities, Inc., 5.550%, dated 1/20/1998,
due 4/20/1998 30,000,000
TOTAL REPURCHASE AGREEMENTS 506,100,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(D) $ 2,207,770,805
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase.
(b) Variable rate securities with current rate and next demand date.
(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) Also represents cost for federal tax purposes.
(e) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At January 31, 1998, these securities
amounted to $195,058,821 which represents 8.9% of net assets.
(f) 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.
Note: The categories of investments are shown as a percentage of net assets
($2,203,800,340) at January 31, 1998.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation
IFA --Industrial Finance Authority
LLC --Limited Liability Corporation
LOC --Letter of Credit
LP --Limited Partnership
PLC --Public Limited Company
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
AUTOMATED CASH MANAGEMENT TRUST
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 2,207,770,805
Income receivable 9,583,292
Receivable for shares sold 32,041,877
Total assets 2,249,395,974
LIABILITIES:
Income distribution payable $ 8,187,275
Payable to Bank 36,769,099
Accrued expenses 639,260
Total liabilities 45,595,634
Net Assets for 2,203,800,340 shares outstanding $ 2,203,800,340
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SERVICE SHARES:
$1,526,035,844 / 1,526,035,844 shares outstanding $1.00
CASH II SHARES:
$677,764,496 / 677,764,496 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
AUTOMATED CASH MANAGEMENT TRUST
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 62,757,066
EXPENSES:
Investment advisory fee $ 5,454,762
Administrative personnel and services fee 823,294
Custodian fees 113,087
Transfer and dividend disbursing agent fees and 413,154
expenses
Directors'/Trustees' fees 6,992
Auditing fees 7,268
Legal fees 17,112
Portfolio accounting fees 77,476
Distribution services fee--Cash II Shares 865,973
Shareholder services fee--Institutional Service 1,861,408
Shares
Shareholder services fee--Cash II Shares 865,973
Share registration costs 65,044
Printing and postage 25,208
Insurance premiums 7,268
Taxes 23,735
Miscellaneous 5,520
Total expenses 10,633,274
Waivers --
Waiver of investment advisory fee $ (3,206,314)
Waiver of distribution services fee--Cash II Shares (301,359)
Waiver of shareholder services fee--Institutional (52,119)
Service Shares
Total waivers (3,559,792)
Net expenses 7,073,482
Net investment income $ 55,683,584
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
AUTOMATED CASH MANAGEMENT TRUST
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
JANUARY 31, 1998 JULY 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 55,683,584 $ 91,687,662
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Service Shares (38,491,221) (67,586,616)
Cash II Shares (17,192,363) (24,101,046)
Change in net assets resulting from distributions to (55,683,584) (91,687,662)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 5,963,281,363 10,582,198,767
Net asset value of shares issued to shareholders in payment 35,977,023 63,190,890
of distributions declared
Cost of shares redeemed (5,899,706,927) (9,815,560,140)
Change in net assets resulting from share transactions 99,551,459 829,829,517
Change in net assets 99,551,459 829,829,517
NET ASSETS:
Beginning of period 2,104,248,881 1,274,419,364
End of period $ 2,203,800,340 $ 2,104,248,881
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS THREE
ENDED MONTHS
(UNAUDITED) YEAR ENDED ENDED
JANUARY 31, JULY 31, JULY 31, YEAR ENDED APRIL 30,
1998 1997 1996 1995(A) 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.05 0.01 0.03 0.03 0.05
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.05) (0.01) (0.03) (0.03) (0.05)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.63% 5.09% 5.20% 1.42% 2.84% 3.11% 5.02%
RATIOS TO AVERAGE NET ASSETS Expenses 0.60%* 0.58% 0.57% 0.57%* 0.57% 0.56% 0.56%
Net investment income 5.17%* 4.97% 5.08% 5.60%* 2.80% 3.07% 4.88%
Expense waiver/reimbursement(c) 0.30%* 0.33% 0.31% 0.40%* 0.07% 0.04% 0.03%
SUPPLEMENTAL DATA
Net assets, end of period(000 omitted) $1,526,036 $1,378,982 $1,274,419 $1,141,043 $975,453 $1,172,170 $1,220,212
</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
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)
FINANCIAL HIGHLIGHTS--CASH II SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, PERIOD ENDED
1998 JULY 31, 1997(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.04
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.04)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
TOTAL RETURN(B) 2.54% 4.14%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.76%* 0.75%*
Net investment income 4.96%* 4.84%*
Expense waiver/reimbursement (c) 0.38%* 0.41%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $677,764 $725,267
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from September 27, 1996, (date of initial
public offering) to July 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)
NOTES TO FINANCIAL STATEMENTS
AUTOMATED CASH MANAGEMENT TRUST
JANUARY 31, 1998 (UNAUDITED)
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"). 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.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS
The Fund uses the amortized cost method to value their portfolio securities in
accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS
It is the policy of the Fund to require the custodian bank to take possession,
to have legally segregated in the Federal Reserve Book Entry System, or to have
segregated within the custodian bank's vault, all securities held as collateral
under repurchase agreement transactions. Additionally, procedures have been
established by the Fund to monitor, on a daily basis, the market value of each
repurchase agreement's collateral to ensure that the value of collateral at
least equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less than
the repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES, AND DISTRIBUTIONS
Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL TAXES
It is the Fund's policy to comply with the provisions of the Code applicable to
regulated investment companies and to distribute to shareholders each year
substantially all of their 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 Investment Company Act of 1940.
Additional information on each restricted security held at January 31, 1998 is
as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST Liquid Asset Backed Securities Trust,
5.614% 8/15/1996 $60,000,000 Liquid Asset Backed Securities Trust, 5.594%
2/19/1997 23,281,931 Liquid Asset Backed Securities Trust, 5.876% 6/27/1997
70,000,000 Rabobank Optional Redemption Trust, 5.754% 4/17/1997 50,000,000
Triangle Funding Ltd., 5.594% 10/16/1997 5,000,000
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses, and revenues reported in
the financial statements. Actual results could differ from those estimated.
OTHER
Investment transactions are accounted for on the trade date.
SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At January 31, 1998, capital paid-in aggregated $2,203,800,340.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX-MONTHS
ENDED
JANUARY 31, YEAR ENDED
INSTITUTIONAL SERVICE SHARES 1998 JULY 31, 1997
<S> <C> <C>
Shares sold 3,902,111,793 7,323,418,360
Shares issued to shareholders in payment of 19,695,462 41,494,370
distributions declared
Shares redeemed (3,774,753,363) (7,260,350,142)
Net change resulting from Institutional Service 147,053,892 104,562,588
Share transactions
<CAPTION>
SIX-MONTHS
ENDED
JANUARY PERIOD ENDED
Cash II Shares 1998 July 31, 1997(a)
Shares sold 2,061,169,570 3,258,780,407
Shares issued to shareholders in payment of 16,281,561 21,696,520
distributions declared
Shares redeemed (2,124,953,564) (2,555,209,998)
Net change resulting from Cash II Share (47,502,433) 725,266,929
transactions
Net change resulting from share transactions 99,551,459 829,829,517
</TABLE>
(a) For the period from September 27, 1996 (date of initial public offering)
through July 31, 1997.
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 Cash II Shares, annually, to compensate
FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify
or terminate this voluntary waiver at any time at its sole discretion.
SHAREHOLDER SERVICES FEE
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services ("FSS"), the Fund will pay FSS up to 0.25% of average daily net assets
of the Fund for the period. The fee paid to FSS is used to finance certain
services for shareholders and to maintain shareholder accounts. FSS may
voluntarily choose to waive any portion of its fee. FSS can modify or terminate
this voluntary waiver at any time at its sole discretion.
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 each 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
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
Anthony R. Bosch
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
[Graphic]
Automated Cash Management Trust
Federated Securities Corp., Distributor
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
SEMI-ANNUAL REPORT TO SHAREHOLDERS JANUARY 31, 1998
Cusip 60934N864
Cusip 60934N831
8112802 (3/98)
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Government
Obligations Fund, a portfolio of Money Market Obligations Trust. This report
covers the first half of the fund's fiscal year, which is the six-month period
ended January 31, 1998. It begins with an investment review of the short-term
government market from the fund's portfolio manager. Following the investment
review are the fund's portfolio of investments and financial statements.
Over the six-month reporting period, dividends paid to shareholders of the
fund's Institutional Shares and Institutional Service Shares each totaled $0.03
per share. At the end of the reporting period, net assets reached the $4.6
billion mark.
In Government Obligations Fund, your ready cash is at work pursuing daily
income, along with the additional advantages of daily liquidity and stability of
principal.* At the end of the reporting period, the fund's portfolio was
invested in repurchase agreements fully collateralized by U.S. government
securities (62.3%), and in short-term U.S. government obligations (39.4%).
Thank you for your confidence in the daily earning power of this high-quality
cash investment. As always, your questions and comments are welcome.
Sincerely,
[Graphic]
J. Christopher Donahue
President
March 15, 1998
* Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or guaranteed by the U.S. government.
INVESTMENT REVIEW
Government Obligations Fund, which is rated AAAm* by Standard & Poor's ("S&P")
and Aaa* by Moody's Investors Service, Inc. ("Moody's"), 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, Federal Home
Loan Mortgage Corp., and, at times, maintained a small Treasury position for
liquidity purposes.
Over the six-month period ended January 31, 1998, the Federal Reserve Board (the
"Fed") stood pat in the face of economic growth that continued to exceed the
2.5% pace thought to be the non-inflationary potential. The federal funds target
remained at 5.5%, where it has been since the Fed tightened monetary policy in
March 1997. With gross domestic product ("GDP") growth at 3.1% over the third
quarter of 1997, expectation was built for the need for an additional tightening
from the Fed as added insurance against inflation. However, dramatic declines in
the Asian equity markets curtailed this expectation, and overseas developments
dominated the rest of the fourth quarter of 1997. Although GDP growth expanded
at close to 4% over this period, the Fed kept monetary policy unchanged, as
inflation at the wholesale and consumer level remained benign.
Movements in short-term Treasury securities--particularly Treasury bills--were
strongly influenced by technical factors over the reporting period. A reduction
in the overall size of Treasury bills due to improvement in the federal budget
deficit kept these securities well-bid and trading well below the federal funds
target. In addition, a periodic flight-to-quality to these securities from
investors seeking a safe haven from the turmoil overseas also drove their yields
lower. As a result, yields on short-term agency securities better reflected the
underlying economic and inflation fundamentals, and were the preferred
investment over the reporting period. The yield on the one-year agency discount
note, for example, began the reporting period at 5.65% in August, traded within
a fairly narrow range until early November, then climbed steadily to 5.85% by
early December. That peak came as the economy kept chugging along and the Asian
crisis subsided. The yield then dropped to 5.4% by early January 1998, as fears
grew that the as-yet-unknown impact of the financial troubles in Asia on the
domestic economy might be greater than previously thought. The yield then
rebounded slightly to 5.5% to end the reporting period, as growth continued
strong.
The fund was targeted in a 35-45 day average maturity range over the reporting
period, 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, although
agency securities remained the preferred investment. This portfolio structure
provided a competitive yield for the fund.
The risks to the Fed at this juncture appear to be balanced, with the threat of
higher inflation stemming from tight labor markets being potentially offset by
the as-yet-unknown impact of the Asian "flu." The Fed should be content to "wait
and see" until the effects on the domestic economy are better understood--which
should become more clear over the second quarter of 1998. We would expect to
maintain our current neutral positioning over this period. 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 S&P evaluates a number of factors, including
credit quality, market price exposure and management. S&P monitors the portfolio
weekly for developments that could cause changes in the ratings. Money market
funds and bond funds rated Aaa by Moody's are judged to be of an investment
quality similar to Aaa-rated fixed income obligations, that is, they are judged
to be of the best quality. These ratings do not remove market risks and are
subject to change.
PORTFOLIO OF INVESTMENTS
GOVERNMENT OBLIGATIONS FUND
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM OBLIGATIONS--39.4%
$ 22,000,000 Federal Farm Credit Bank Note--0.5% 5.600%, 10/1/1998 $ 21,967,554
67,000,000 (a)Federal Farm Credit Bank, Floating Rate Note--1.4% 66,973,865
5.533%, 3/2/1998
152,500,000 Federal Home Loan Bank--3.3% 5.640% - 6.025%, 3/24/1998 - 152,473,552
1/21/1999
108,998,000 (b)Federal Home Loan Bank Discount Note--2.3% 5.634% - 107,799,983
5.731%, 3/4/1998 - 6/22/1998
101,500,000 (a)Federal Home Loan Bank, Floating Rate Note--2.2% 5.391% 101,461,213
- 5.696%, 2/20/1998 - 2/23/1998
53,295,000 Federal Home Loan Mortgage Corp.--1.1% 5.715% - 5.840%, 53,294,446
3/17/1998 - 4/8/1998
44,374,000 (b)Federal Home Loan Mortgage Corp., Discount Note--1.0% 44,290,429
5.788%, 2/13/1998
79,000,000 (a)Federal Home Loan Mortgage Corp., Floating Rate 78,979,868
Note--1.7% 5.397% - 5.429%, 2/3/1998 - 2/20/1998
174,945,000 Federal National Mortgage Association--3.8% 5.630% - 174,995,315
7.000%, 3/25/1998 - 8/14/1998
452,085,000 (b)Federal National Mortgage Association, Discount 443,944,906
Note--9.6% 5.506% - 5.795%, 2/10/1998 - 10/8/1998
204,000,000 (a)Federal National Mortgage Association, Floating Rate 203,871,923
Note--4.4% 5.403% - 5.689%, 2/3/1998 - 3/17/1998
210,650,000 Housing and Urban Development, Floating Rate Note--4.5% 210,650,000
6.013%, 3/2/1998
38,000,000 Student Loan Marketing Association--0.8% 5.830% - 5.880%, 38,002,649
10/29/1998 - 12/10/1998
79,000,000 (a)Student Loan Marketing Association, Floating Rate 78,970,950
Note--1.7% 5.459% - 5.709%, 2/3/1998
52,000,000 United States Treasury Notes--1.1% 6.125% - 6.250%, 52,077,109
5/15/1998 - 7/31/1998
Total Short-Term Obligations 1,829,753,762
(C)REPURCHASE AGREEMENTS--62.3%
230,000,000 ABN AMRO Chicago Corp., 5.650%, dated 1/30/1998, due 230,000,000
2/2/1998
230,000,000 Bear, Stearns and Co., 5.650%, dated 1/30/1998, due 230,000,000
2/2/1998
100,000,000 CIBC Wood Gundy Securities Corp., 5.650%, dated 1/30/1998, 100,000,000
due 2/2/1998
100,000,000 Deutsche Bank Government Securities, Inc., 5.650%, dated 100,000,000
1/30/1998, due 2/2/1998
</TABLE>
GOVERNMENT OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)REPURCHASE AGREEMENTS--CONTINUED
$ 370,000,000 Goldman Sachs Group, LP, 5.650%, dated 1/30/1998, due $ 370,000,000
2/2/1998
230,000,000 Greenwich Capital Markets, Inc., 5.650%, dated 1/30/1998, 230,000,000
due 2/2/1998
230,000,000 HSBC Securities, Inc., 5.650%, dated 1/30/1998, due 230,000,000
2/2/1998
230,000,000 Prudential Securities, Inc., 5.650%, dated 1/30/1998, due 230,000,000
2/2/1998
230,000,000 Salomon Smith Barney Holdings, Inc., 5.650%, dated 230,000,000
1/30/1998, due 2/2/1998
20,000,000 State Street Bank and Trust Co., 5.600%, dated 1/30/1998, 20,000,000
due 2/2/1998
66,400,000 Swiss Bank Capital Markets, 5.610%, dated 1/30/1998, due 66,400,000
2/2/1998
230,000,000 Toronto Dominion Securities (USA) Inc., 5.650%, dated 230,000,000
1/30/1998, due 2/2/1998
100,000,000 UBS Securities, Inc., 5.650%, dated 1/30/1998, due 100,000,000
2/2/1998
100,000,000 (d)Chase Government Securities, Inc., 5.550%, dated 100,000,000
1/20/1998, due 4/20/1998
55,000,000 (d)Chase Government Securities, Inc., 5.550%, dated 55,000,000
1/27/1998, due 4/6/1998
90,000,000 (d)Credit Suisse First Boston, Inc., 5.520%, dated 90,000,000
1/7/1998, due 2/6/1998
66,000,000 (d)J.P. Morgan & Co., Inc., 5.520%, dated 1/7/1998, due 66,000,000
2/6/1998
103,000,000 (d)Lehman Brothers, Inc., 5.520%, dated 1/9/1998, due 103,000,000
4/6/1998
110,000,000 (d)Merrill Lynch, Pierce, Fenner and Smith, 5.520%, dated 110,000,000
1/7/1998, due 2/6/1998
TOTAL REPURCHASE AGREEMENTS 2,890,400,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(e) $ 4,720,153,762
</TABLE>
(a) Floating rate note with current rate and next reset date shown.
(b) Each issue shows the rate of discount at time of purchase.
(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.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($4,641,866,483) at January 31, 1998.
The following acronym is used throughout this portfolio:
LP--Limited Partnership
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
GOVERNMENT OBLIGATIONS FUND
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Investments in repurchase agreements $ 2,890,400,000
Investments in securities 1,829,753,762
Total investments in securities, at amortized cost and value $ 4,720,153,762
Income receivable 16,675,289
Total assets 4,736,829,051
LIABILITIES:
Payable for investments purchased 72,942,695
Income distribution payable 20,407,357
Payable to Bank 1,118,524
Accrued expenses 493,992
Total liabilities 94,962,568
Net Assets for 4,641,866,483 shares outstanding $ 4,641,866,483
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION
PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$3,300,279,688 / 3,300,279,688 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$1,341,586,795 / 1,341,586,795 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
GOVERNMENT OBLIGATIONS FUND
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 125,351,340
EXPENSES:
Investment advisory fee $ 4,411,889
Administrative personnel and services fee 1,664,730
Custodian fees 141,402
Transfer and dividend disbursing agent fees and 82,752
expenses
Directors'/Trustees' fees 14,628
Auditing fees 6,532
Legal fees 5,520
Portfolio accounting fees 180,818
Shareholder services fee--Institutional Shares 4,116,373
Shareholder services fee--Institutional Service 1,398,487
Shares
Share registration costs 241,768
Printing and postage 11,604
Insurance premiums 13,708
Taxes 15,088
Miscellaneous 3,064
Total expenses 12,308,363
Waivers--
Waiver of investment advisory fee $ (2,284,564)
Waiver of shareholder services fee--Institutional (4,116,373)
Shares
Total waivers (6,400,937)
Net expenses 5,907,426
Net investment income $ 119,443,914
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
GOVERNMENT OBLIGATIONS FUND
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED
1998 JULY 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 119,443,914 $ 177,875,424
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Shares (90,036,858) (134,094,591)
Institutional Service Shares (29,407,056) (43,780,833)
Change in net assets resulting from distributions to (119,443,914) (177,875,424)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 16,259,041,955 22,256,668,113
Net asset value of shares issued to shareholders in 27,774,504 55,759,597
payment of distributions declared
Cost of shares redeemed (15,875,210,349) (20,967,440,251)
Change in net assets resulting from share transactions 411,606,110 1,344,987,459
Change in net assets 411,606,110 1,344,987,459
NET ASSETS:
Beginning of period 4,230,260,373 2,885,272,914
End of period $ 4,641,866,483 $ 4,230,260,373
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.05 0.05 0.03 0.03
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.05) (0.05) (0.03) (0.03)
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN(B) 2.79% 5.43% 5.55% 5.57% 3.41% 3.22%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.20%* 0.20% 0.20% 0.20% 0.20% 0.20%
Net investment income 5.47%* 5.32% 5.41% 5.58% 3.38% 3.16%
Expense waiver/reimbursement(c) 0.35%* 0.35% 0.36% 0.40% 0.15% 0.11%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $3,300,280 $3,293,392 $2,182,999 $1,926,516 $763,879 $707,146
</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)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
1998 1997 1996 1995(A)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.05 0.05
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.05) (0.05)
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00
TOTAL RETURN(B) 2.66% 5.16% 5.29% 5.31%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.46%* 0.45% 0.45% 0.45%*
Net investment income 5.26%* 5.06% 5.14% 5.63%*
Expense waiver/reimbursement(c) 0.10%* 0.10% 0.11% 0.15%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $1,341,587 $936,869 $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)
NOTES TO FINANCIAL STATEMENTS
GOVERNMENT OBLIGATIONS FUND
JANUARY 31, 1998 (UNAUDITED)
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"). 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.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS
The Fund uses the amortized cost method to value its portfolio securities in
accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS
It is the policy of the Fund to require the custodian bank to take possession,
to have legally segregated in the Federal Reserve Book Entry System, or to have
segregated within the custodian bank's vault, all securities held as collateral
under repurchase agreement transactions. Additionally, procedures have been
established by the Fund to monitor, on a daily basis, the market value of each
repurchase agreement's collateral to ensure that the value of collateral at
least equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less than
the repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES, AND DISTRIBUTIONS
Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL TAXES
It is the Fund's policy to comply with the provisions of the Code applicable to
regulated investment companies and to distribute to shareholders each year
substantially all of its income. Accordingly, no provisions for federal tax are
necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Fund may engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintains security
positions such that sufficient liquid assets will be available to make payment
for the securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses, and revenues reported in
the financial statements. Actual results could differ from those estimated.
OTHER
Investment transactions are accounted for on the trade date.
SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At January 31, 1998, capital paid-in aggregated $4,641,866,483.
Transactions in shares were as follows:
<TABLE>
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED
INSTITUTIONAL SHARES 1998 JULY 31, 1997
<S> <C> <C>
Shares sold 12,050,720,930 17,018,052,623
Shares issued to shareholders in payment of distributions
declared 18,015,170 37,459,828
Shares redeemed (12,061,848,012) (15,945,119,407)
Net change resulting from Institutional Share
transactions 6,888,088 1,110,393,044
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED
INSTITUTIONAL SERVICE SHARES 1998 JULY 31, 1997
<S> <C> <C>
Shares sold 4,208,321,025 5,238,615,490
Shares issued to shareholders in payment of distributions
declared 9,759,334 18,299,769
Shares redeemed (3,813,362,337) (5,022,320,844)
Net change resulting from Institutional Service Share
transactions 404,718,022 234,594,415
Net change resulting from Share transactions 411,606,110 1,344,987,459
</TABLE>
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE
Federated Management, the Fund's investment adviser (the "Adviser"), receives
for its services an annual investment advisory fee equal to 0.20% 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
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
Anthony R. Bosch
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves risk, including possible
loss of principal. Although money market funds seek to maintain a stable net
asset value of $1.00 per share, there is no assurance that they will be able to
do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses, and other information.
[Graphic]
Federated Investors
GOVERNMENT OBLIGATIONS FUND
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JANUARY 31, 1998
Federated Securities Corp., Distributor
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
[Graphic]
Cusip 60934N104
Cusip 60934N807
1022001 (3/98)
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Government
Obligations Tax-Managed Fund, a portfolio of Money Market Obligations Trust.
This report covers the first half of the fund's fiscal year, which is the
six-month period ended January 31, 1998. It begins with an investment review of
the short-term government market from the fund's portfolio manager. Following
the investment review are the fund's portfolio of investments and financial
statements.
Over the six-month reporting period, tax-free dividends paid to shareholders of
the fund's Institutional Shares and Institutional Service Shares each totaled
$0.03 per share. At the end of the reporting period, net assets reached $1.6
billion.
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 per share.* In
addition, the fund's portfolio of U.S. government securities is managed so that
dividends are exempt from state and local income taxes.**
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, 1998
* Money market funds seek to maintain a stable net asset of $1.00 per
share.There is no guarantee that they will be able to do so. An investment
in the fund is not insured or 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 ("S&P") and Aaa* by Moody's Investors Service, Inc. ("Moody's"), invests
only in U.S. Treasury and U.S. government agency obligations. The fund invests
in issues of the Student Loan Marketing Association, the Federal Farm Credit
Bank System, the Federal Home Loan Bank System, and the Tennessee Valley
Authority. The fund maintains a small Treasury security 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-month period ended January 31, 1998, the Federal Reserve Board (the
"Fed") made no changes in monetary policy, electing to maintain the federal
funds target rate at 5.50%. Another very favorable aspect of U.S. economic
performance was the improvement in the federal budget deficit picture. In fiscal
1997, the deficit dropped to its lowest level in more than two decades.
Projections show the budget essentially remaining in balance over the next
several years. As a result of the budget picture and the reality of less
issuance of Treasury securities, market technicals at the front-end of the yield
curve resulted in the yield on both the three-month and six-month Treasury bills
drifting lower during August and September. The yield on the three-month
Treasury bill began the reporting period at 5.27% and fell to 4.91% in late
September. The six-month Treasury bill followed a similar path, beginning the
reporting period at 5.39% and falling to 5.14% in late September.
Economic fundamentals remained quite robust during the reporting period.
Employment numbers averaging 298,000 non-farm payroll job additions per month,
real gross domestic product ("GDP") growth around the 3% level, and robust
consumer confidence measures began to weigh on the market. This resulted in a
back-up in yields from the September lows. The three- and six-month Treasury
bills climbed from their late September lows to December peaks of 5.47% and
5.56%, respectively. Counter-balancing the strong economic growth was the dearth
of inflationary pressures, including contracting producer prices and benign
consumer prices. The inflation picture, coupled with market technicals, kept a
lid on Treasury security yields. Yields drifted lower in January 1998 and the
three-month Treasury bill ended the reporting period just 10 basis points lower
than where it stood at the beginning of the reporting period, at 5.18%. The
six-month Treasury bill did likewise and ended the reporting period with a yield
just 16 basis points below its yield on August 1, 1997, at 5.23%. Over the
entire reporting period, the slope of the front-end of the yield curve flattened
by 18 basis points. Most of this flattening came as a result of the one-year
Treasury bill; its yield began the reporting period at 5.49% and ended at 5.26%.
While it was clear that the U.S. economy was exceptionally healthy, the impact
of the Asian crisis looms on the horizon. The financial difficulties being
experienced by several Asian nations is likely to impact the U.S. in the form of
reduced demand for our exports and increased competition from imports. This
suggests that the growth of economic activity in the U.S. will moderate from
current strong levels.
The fund remained targeted in a 35- to 45-day average maturity range throughout
the reporting period, and positioned itself within that range according to
relative value opportunities. The fund's portfolio is barbelled in structure,
which continued to provide a competitive yield. On January 31, 1998, 23% of the
fund was invested in U.S. government agency floating rate notes, including a
position in a Student Loan Marketing Association master note. The master note
helped to provide liquidity for the fund. This floating rate position was
combined with short-term agency discount notes to comprise the short-end of the
barbell. The fund combined this short position with Treasury and agency
securities with longer maturities of 6- to 12-months.
The fund most likely will continue to remain in its neutral, 35- to45-day
average maturity range as the economic backdrop continues to show mixed signals
of robust economic growth and subdued inflationary pressures. Changing economic
and market developments are continuously monitored, and performance is maximized
through on-going relative value analysis, to best serve clients attracted to the
short-term U.S. government market.
* An AAAm rating is obtained after S&P evaluates a number of factors, including
credit quality, market price exposure and management. S&P 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.
PORTFOLIO OF INVESTMENTS
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
GOVERNMENT AGENCIES--100.9%
$ 21,000,000 Federal Farm Credit Bank Notes, 5.35% - 5.70%, 5/1/1998 - $ 20,987,098
10/1/1998
107,046,000 (a)Federal Farm Credit Bank, Discount Notes, 5.17% - 106,140,287
5.55%, 2/2/1998 - 12/11/1998
13,000,000 (b)Federal Farm Credit Bank, Floating Rate Notes, 5.533%, 12,994,929
2/2/1998
67,100,000 Federal Home Loan Bank Notes, 5.106% - 6.025%, 2/23/1998 - 67,083,536
12/30/1998
730,350,000 (a)Federal Home Loan Bank, Discount Notes, 5.24% - 5.65%, 725,534,818
2/2/1998 - 7/22/1998
202,000,000 (b)Federal Home Loan Bank, Floating Rate Notes, 5.384% - 201,909,489
5.696%, 2/3/1998 - 3/2/1998
18,500,000 Student Loan Marketing Association Notes, 5.535% - 5.88%, 18,498,831
2/25/1998 - 12/10/1998
234,000,000 (a)Student Loan Marketing Association, Discount Notes, 233,963,860
5.56%, 2/2/1998
67,000,000 (b)Student Loan Marketing Association, Floating Rate 66,987,802
Notes, 5.414% - 5.709%, 2/3/1998
81,200,000 (b)Student Loan Marketing Association, Floating Rate 81,200,000
Master Notes, 5.559%, 2/3/1998
41,030,000 (a)Tennessee Valley Authority, Discount Notes, 5.38%, 40,717,283
3/24/1998
Total Government Agencies 1,576,017,933
U.S. TREASURY OBLIGATIONS--3.0%
U.S. TREASURY BILLS--2.5%
40,000,000 (a)5.16%, 3/26/1998 39,696,133
U.S. TREASURY NOTES--0.5%
7,500,000 6.125% - 6.25%, 5/15/1998 - 7/31/1998 7,514,385
Total U.S. Treasury Obligations 47,210,518
Total Investments (at amortized cost)(c) $ 1,623,228,451
</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
($1,561,925,706) at January 31, 1998.
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 1,623,228,451
Cash 31,225,243
Income receivable 4,680,073
Deferred organizational costs 14,478
Other assets 61,985
Total assets 1,659,210,230
LIABILITIES:
Payable for investments purchased $ 59,812,153
Payable for shares redeemed 30,809,198
Income distribution payable 6,464,981
Accrued expenses 198,192
Total liabilities 97,284,524
Net Assets for 1,561,925,706 shares outstanding $ 1,561,925,706
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$752,557,549 / 752,557,549 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$809,368,157 / 809,368,157 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 33,669,690
EXPENSES:
Investment advisory fee $ 1,204,842
Administrative personnel and services fee 454,593
Custodian fees 33,894
Transfer and dividend disbursing agent fees and 42,612
expenses
Directors'/Trustees' fees 3,496
Auditing fees 6,164
Legal fees 3,312
Portfolio accounting fees 79,017
Shareholder services fee--Institutional Shares 770,985
Shareholder services fee--Institutional Service Shares 735,067
Share registration costs 67,332
Printing and postage 7,544
Insurance premiums 4,048
Miscellaneous 6,236
Total expenses 3,419,142
Waivers --
Waiver of investment advisory fee $ (681,768)
Waiver of shareholder services fee--Institutional (770,985)
Shares
Total waivers (1,452,753)
Net expenses 1,966,389
Net investment income $ 31,703,301
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
JANUARY 31, 1998 JULY 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 31,703,301 $ 36,996,272
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Shares (16,586,407) (15,718,201)
Institutional Service Shares (15,116,894) (21,278,071)
Change in net assets resulting from distributions to (31,703,301) (36,996,272)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 2,885,629,396 3,043,939,190
Net asset value of shares issued to shareholders in payment 8,356,391 9,152,302
of distributions declared
Cost of shares redeemed (2,263,837,725) (2,653,254,346)
Change in net assets resulting from share transactions 630,148,062 399,837,146
Change in net assets 630,148,062 399,837,146
NET ASSETS:
Beginning of period 931,777,644 531,940,498
End of period $ 1,561,925,706 $ 931,777,644
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
1998 1997 1996 1995(A)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.05 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.05) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $1.00
TOTAL RETURN(B) 2.74% 5.35% 5.50% 0.94%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.20%* 0.20% 0.17% 0.20%*
Net investment income 5.38%* 5.26% 5.28% 5.78%*
Expense waiver/reimbursement(c) 0.36%* 0.38% 0.44% 0.65%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $752,558 $510,683 $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)
FINANCIAL HIGHLIGHTS INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
1998 1997 1996 1995(A)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.05 0.01
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.05) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.61% 5.09% 5.23% 0.95%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.45%* 0.45% 0.42% 0.45%*
Net investment income 5.14%* 4.97% 5.00% 5.55%*
Expense waiver/reimbursement(c) 0.11%* 0.13% 0.19% 0.40%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $809,368 $421,095 $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)
NOTES TO FINANCIAL STATEMENTS
GOVERNMENT OBLIGATIONS TAX-MANAGED FUND
JANUARY 31, 1998 (UNAUDITED)
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.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS
The Fund uses the amortized cost method to value its portfolio securities in
accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS
Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL TAXES
It is the Fund's policy to comply with the provisions of the Code applicable to
regulated investment companies and to distribute to shareholders each year
substantially all of its income. Accordingly, no provisions for federal tax are
necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Fund may engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintains security
positions such that sufficient liquid assets will be available to make payment
for the securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses, and revenues reported in
the financial statements. Actual results could differ from those estimated.
OTHER
Investment transactions are accounted for on the trade date.
SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the 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, 1998, capital paid-in aggregated $1,561,925,706.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
INSTITUTIONAL SHARES JANUARY 31, 1998 JULY 31, 1997
<S> <C> <C>
Shares sold 1,140,448,228 1,062,116,399
Shares issued to shareholders in payment of 6,162,910 5,995,666
distributions declared
Shares redeemed (904,736,446) (756,672,059)
Net change resulting from Institutional Share 241,874,692 311,440,006
transactions
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
INSTITUTIONAL SERVICE SHARES JANUARY 31, 1998 JULY 31, 1997
Shares sold 1,745,181,168 1,981,822,791
Shares issued to shareholders in payment of 2,193,481 3,156,636
distributions declared
Shares redeemed (1,359,101,279) (1,896,582,287)
Net change resulting from Institutional Service 388,273,370 88,397,140
Share transactions
Net change resulting from share transactions 630,148,062 399,837,146
</TABLE>
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 $26,601 were borne initially by the Adviser. The Fund
has reimbursed the Adviser for these expenses. These expenses have been deferred
and are being amortized over the five-year period following the Fund's effective
date. For the year ended January 31, 1998, the Fund expensed $5,502 of
organizational 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
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
Anthony R. Bosch
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves risk, including possible
loss of principal. Although money market funds seek to maintain a stable net
asset value of $1.00 per share, there is no assurance that they will be able to
do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses, and other information.
NOTES
NOTES
[Graphic]
Government Obligations Tax-Managed Fund
SEMI-ANNUAL REPORT TO SHAREHOLDERS JANUARY 31, 1998
Federated Securities Corp., Distributor
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 60934N856
Cusip 60934N849
G01611-01 (3/98)
[Graphic]
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Prime
Obligations Fund, a portfolio of Money Market Obligations Trust. This report
covers the first half of the fund's fiscal year, which is the six-month period
ended January 31, 1998. It begins with an investment review of the short-term
market from the fund's portfolio manager. Following the investment review are
the fund's portfolio of investments and 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 reporting period, net assets reached $7.3 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 reporting period, the fund's portfolio was
invested across a wide range of high-quality, short-term money market
securities, including commercial paper (38.8%), variable rate instruments
(19.6%), repurchase agreements (19.2%), certificates of deposit (7.6%),
short-term notes (7.7%), and time deposits (7.2%).
Thank you for your confidence in the daily earning power of Prime Obligations
Fund. Your questions and comments are always welcome.
Sincerely,
[Graphic]
J. Christopher Donahue
President
March 15, 1998
* Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or guaranteed by the U.S. government.
INVESTMENT REVIEW
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.
Growth during 1997 continued at an above-average pace, slowing only moderately
during the third quarter. Specifically, third quarter gross domestic product
("GDP") registered 3.1% while fourth quarter GDP climbed back up to 3.9%.
Despite the high growth, inflation remained subdued by all measures. The
consumer price index rose just 1.6% on an annualized basis for the six-month
period ended January 31, 1998. For the same time period, the producer price
index actually declined 0.9%, due mostly to a decline in energy prices, while
the employment cost index grew at an annualized 3.7% pace during the second half
of 1997.
Thirty-day commercial paper started the reporting period at 5.53% on August 1,
1997, and then rose as high as 5.98% on December 29, 1997, reflecting year-end
technical pressures. Rates fell back off again in January 1998 with 30-day
commercial paper settling in at the 5.50% level.
The money market yield curve flattened throughout the reporting period.
One-month commercial paper rates declined one basis point while six-month rates
declined 14 basis points reflecting the concern in the market about the Asian
contagion and its overall effect on U.S. growth.
The target average maturity range for the fund remained 35-45 days throughout
the reporting period, reflecting neutral economic and monetary sentiment. In
structuring the fund, there was 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-month period ended January 31, 1998, net assets of the fund
increased from $5.8 to $7.3 billion while the seven-day net yield increased from
5.49% to 5.53% for the Institutional Shares,* and from 5.24% to 5.28% for
Institutional Service Shares.* The effective average maturity of the fund on
January 31, 1998, was 42 days.
* Performance quoted represents past performance and is not indicative of future
results. Yield will vary. Yields quoted for money market funds most closely
reflect the fund's current earnings.
PORTFOLIO OF INVESTMENTS
PRIME OBLIGATIONS FUND
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
CERTIFICATE OF DEPOSIT--7.6%
BANKING--7.6%
$ 103,000,000 Bankers Trust Co., New York, 5.911% - 6.000%, $ 102,995,030
9/9/1998 - 12/10/1998
30,000,000 Banque Nationale de Paris, 5.500%, 4/14/1998 30,001,184
160,000,000 Canadian Imperial Bank of Commerce, Toronto, 160,001,995
5.500% - 5.950%, 4/9/1998 - 8/27/1998
30,000,000 Morgan Guaranty Trust Co., New York, 5.814%, 29,995,613
8/6/1998
233,000,000 Societe Generale, Paris, 5.750% - 6.140%, 232,968,023
3/3/1998 - 10/15/1998
TOTAL CERTIFICATE OF DEPOSIT 555,961,845
(A)COMMERCIAL PAPER--38.8%
BANKING--11.2%
25,000,000 Abbey National N.A. Corp., (Guaranteed by Abbey 24,884,167
National Bank PLC, London), 5.719%, 3/3/1998
301,727,000 Aspen Funding Corp., (Guaranteed by Deutsche 299,608,918
Bank, AG), 5.527% - 5.873%, 2/17/1998 - 5/1/1998
3,500,000 Barclays U.S. Funding Corp., (Guaranteed by 3,457,278
Barclays Bank PLC, London), 5.500%, 4/23/1998
18,055,000 Benedictine Health System, (Lasalle National 17,871,401
Bank, Chicago LOC), 5.804%, 4/6/1998
95,000,000 Cregem North America, Inc., (Guaranteed by 94,256,597
Credit Communal de Belgique, Brussles), 5.584% -
5.816%, 3/13/1998 - 4/16/1998
40,000,000 Glencore Finance (Bermuda) Ltd., (ABN AMRO Bank 39,467,111
N.V., Amsterdam LOC), 5.525%, 4/30/1998
56,000,000 Internationale Nederlanden U.S. Funding Corp, 54,925,858
5.827%, 6/3/1998
50,000,000 J.P. Morgan & Co., Inc., 5.608%, 4/6/1998 49,508,444
150,000,000 Societe Generale North America, Inc., 148,467,375
(Guaranteed by Societe Generale, Paris), 5.645%,
4/9/1998
95,000,000 Svenska Handelsbanken, Inc., (Guaranteed by 94,447,713
Svenska Handelsbanken, Stockholm), 5.645% -
5.711%, 2/13/1998 - 4/9/1998
TOTAL 826,894,862
BROKERAGE--6.5%
33,200,000 Credit Suisse First Boston, Inc., 5.578%, 32,860,161
4/9/1998
246,000,000 Merrill Lynch & Co., Inc., 5.513% - 5.813%, 244,474,620
2/23/1998 - 4/13/1998
200,000,000 Morgan Stanley Group, Inc., 5.813% - 5.835%, 198,628,778
3/16/1998
FINANCE - AUTOMOTIVE--4.2%
TOTAL 475,963,559
270,000,000 Ford Motor Credit Corp., 5.568% - 5.689%, 268,780,267
2/2/1998 - 4/10/1998
40,000,000 General Motors Acceptance Corp., 5.643%, 39,993,733
2/2/1998
TOTAL 308,774,000
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
COMMERCIAL PAPER--CONTINUED
FINANCE - COMMERCIAL--14.0%
$ 27,000,000 Alpha Finance Corp., Ltd., 5.741%, 3/12/1998 $ 26,836,785
33,000,000 Asset Securitization Cooperative Corp., 5.869%, 32,898,983
2/20/1998
93,500,000 Beta Finance, Inc., 5.646% - 5.730%, 2/9/1998 - 93,090,884
4/8/1998
60,000,000 CIESCO, L.P., 5.507% - 5.556%, 4/9/1998 - 59,347,694
4/23/1998
63,000,000 Corporate Asset Funding Co., Inc. (CAFCO), 62,820,733
5.507% - 5.796%, 2/6/1998 - 4/13/1998
330,000,000 General Electric Capital Corp., 5.546% - 5.865%, 324,417,256
2/23/1998 - 8/28/1998
170,217,000 Greenwich Funding Corp., 5.506% - 5.831%, 168,564,903
3/5/1998 - 4/22/1998
225,221,000 Receivables Capital Corp., 5.520% - 5.876%, 224,939,360
2/2/1998 - 2/27/1998
20,000,000 Sheffield Receivables Corp., 5.577%, 2/6/1998 19,984,583
TOTAL 1,012,901,181
FINANCE - EQUIPMENT--0.2%
11,958,083 Pitney Bowes Credit Corp., 5.605%, 2/10/1998 11,941,402
FINANCE - RETAIL -- 2.6%
100,000,000 Associates Corp. of North America, 5.610% - 99,977,042
5.611%, 2/2/1998 - 2/3/1998
85,000,000 New Center Asset Trust, A1+/P1 Series, 5.513% - 84,075,608
5.566%, 4/8/1998 - 4/20/1998
TOTAL 184,052,650
INSURANCE - 0.1%
10,000,000 CXC, Inc., 5.818%, 5/15/1998 9,837,489
TOTAL COMMERCIAL PAPER 2,830,365,143
SHORT-TERM NOTES -- 7.7%
BANKING--2.4%
10,000,000 Abbey National Treasury Services, PLC, 6.050%, 9,997,240
6/8/1998
1,500,000 Bayerische Landesbank Girozentrale, 6.250%, 1,499,913
4/15/1998
110,000,000 SALTS II Cayman Islands Corp., (Bankers Trust 110,000,000
International, PLC Swap Agreement) 5.988%,
3/19/1998
55,000,000 SALTS III Cayman Island Corp., (Bankers Trust 55,000,000
International, PLC Swap Agreement), 5.725%,
7/23/1998
TOTAL 176,497,153
BROKERAGE--1.3%
96,000,000 Goldman Sachs & Co., 5.600%, 4/27/1998 96,000,000
FINANCE-AUTOMOTIVE -- 1.0%
3,836,868 Banc One Auto Trust 1995-A, 7.050%, 8/15/1998 3,845,910
2,474,883 Chase Manhattan Auto Owner Trust 1997-B, 5.744%, 2,474,883
7/10/1998
64,009,610 Ford Credit Auto Lease Trust 1997-B, 5.748%, 64,009,610
10/15/1998
TOTAL 70,330,403
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM NOTES--CONTINUED
FINANCE - COMMERCIAL--2.5%
$ 76,000,000 Beta Finance, Inc., 6.080% - 6.27%, 3/26/1998 - $ 76,000,000
5/12/1998
2,000,000 CIT Group Holdings, Inc., 6.125%, 9/1/1998 2,002,521
3,100,000 General Electric Capital Corp., 7.205%, 3/9/1998 3,103,031
100,000,000 (b)Triangle Funding Ltd., 5.594%, 11/16/1998 100,000,000
TOTAL 181,105,552
FINANCE-EQUIPMENT -- 0.2%
17,709,300 Copelco Capital Funding Corp. X 1997-A, 5.809%, 17,709,300
7/20/1998
FINANCE-RETAIL--0.3%
21,055,168 ContiMortgage Home Equity Loan Trust 1997-5, 21,055,168
5.906%, 1/15/1999
TOTAL SHORT-TERM NOTES 562,697,576
(C)VARIABLE RATE OBLIGATIONS--19.6%
BANKING--12.8%
5,880,000 Abbott Foods, Series 1996, (Huntington National 5,880,000
Bank, Columbus, OH LOC), 5.580%, 2/5/1998
5,340,000 Alabama State IDA, (Series 1994) Miltope 5,340,000
Project, (Regions Bank, Alabama LOC), 5.620%,
2/5/1998
7,825,000 Alabama State IDA, (Wellborn Cabinet, Inc.), Tax 7,825,000
Revenue Bonds, (Amsouth Bank N.A., Birmingham
LOC), 5.670%, 2/4/1998
8,105,000 Alexandria Executive Club L.P., (Huntington 8,105,000
National Bank, Columbus, OH LOC), 5.580%,
2/5/1998
8,580,000 Arrow N.A., Inc., (Bank of America NT and SA, 8,580,000
San Francisco LOC), 5.580%, 2/5/1998
7,000,000 Asset Holdings Corp. VII, (U.S. Bank, N.A., 7,000,000
Minneapolis LOC), 5.580%, 2/5/1998
3,500,000 Asset Holdings V, (Bayerische Vereinsbank AG, 3,500,000
Munich LOC), 5.580%, 2/5/1998
16,500,000 Association of American Medical Colleges, 16,500,000
(Guaranteed by Chase Manhattan Bank N.A., New
York), 5.630%, 2/4/1998
3,800,000 Balboa Investment Group V, Series 1997, (Amsouth 3,800,000
Bank N.A., Birmingham LOC), 5.670%, 2/5/1998
4,000,000 Bardstown City, KY, (RJ Tower Project), (Series 4,000,000
1995), (Comerica, Inc. LOC), 5.610%, 2/5/1998
8,000,000 Bethesda Country Club, Inc., Series 1997, (First 8,000,000
National Bank of Maryland, Baltimore LOC),
5.610%, 2/3/1998
1,612,790 Bowling Green Manor L.P., (Huntington National 1,612,790
Bank, Columbus, OH LOC), 5.580%, 2/5/1998
3,000,000 Brentlinger Enterprises, (Huntington National 3,000,000
Bank, Columbus, OH LOC), 5.640%, 2/5/1998
6,292,000 Capital One Funding Corp., Series 1994-A, (Bank 6,292,000
One, Ohio, N.A. LOC), 5.580%, 2/5/1998
19,116,000 Capital One Funding Corp., Series 1995-B, (Bank 19,116,000
One, Kentucky LOC), 5.580%, 2/5/1998
16,208,000 Capital One Funding Corp., Series 1994-C, (Bank 16,208,000
One, Ohio, N.A. LOC), 5.580%, 2/5/1998
8,796,000 Capital One Funding Corp., Series 1994-D, (Bank 8,796,000
One, Kentucky LOC), 5.580%, 2/5/1998
19,935,000 Capital One Funding Corp., Series 1995-A, (Bank 19,935,000
One, Indianapolis, N.A. LOC), 5.580%, 2/5/1998
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)VARIABLE RATE OBLIGATIONS--CONTINUED
BANKING--CONTINUED
$ 21,124,000 Capital One Funding Corp., Series 1995-F, (Bank $ 21,124,000
One, Ohio, N.A. LOC), 5.580%, 2/5/1998
9,600,000 Capital One Funding Corp., Series 1996H, (Bank 9,600,000
One, West Virginia, N.A. LOC), 5.580%, 2/5/1998
5,000,000 Carport, Inc., Series 1997, (Amsouth Bank N.A., 5,000,000
Birmingham LOC), 5.670%, 2/5/1998
3,000,000 Chestnut Hills Apartments, Ltd., (Huntington 3,000,000
National Bank, Columbus, OH LOC), 5.630%,
2/5/1998
3,900,000 Cleveland Sportsplex Ltd., (Huntington National 3,900,000
Bank, Columbus, OH LOC), 5.580%, 2/5/1998
10,100,000 Cloquet, MN, Series 1996-B Potlach Corp., 10,100,000
(Credit Suisse First Boston LOC), 5.650%,
2/4/1998
1,032,337 Clyde Manor L.P., (Huntington National Bank, 1,032,337
Columbus, OH LOC), 5.580%, 2/5/1998
3,025,000 Columbia County, GA Development Authority, 3,025,000
Series 1993, (SunTrust Banks, Inc. LOC), 5.650%,
2/4/1998
3,100,000 Cuyahoga County, OH IDR, Northstar Plastics, 3,100,000
(Bank One, Ohio, N.A. LOC), 5.580%, 2/5/1998
8,810,000 Dewberry IV L.P., Series 1997, (First National 8,810,000
Bank of Maryland, Baltimore LOC), 5.610%,
2/3/1998
5,900,000 Die-Matic Corp., (Huntington National Bank, 5,900,000
Columbus, OH LOC), 5.610%, 2/5/1998
3,790,000 Eastwinds Investment, Ltd., (Huntington National 3,790,000
Bank, Columbus, OH LOC), 5.580%, 2/5/1998
6,805,000 Fort Craig Limited Partnership, (Huntington 6,805,000
National Bank, Columbus, OH LOC), 5.580%,
2/5/1998
4,300,000 G.M.H. Enterprises, Inc., Series 1995, (National 4,300,000
City Bank, Cleveland, OH LOC), 5.550%, 2/5/1998
7,400,000 Gadsen, AL IDB, Chicago Steel LLC, (Lasalle 7,400,000
National Bank, Chicago LOC), 5.680%, 2/5/1998
3,000,000 Gerken Materials, Inc., Series 1995, (Huntington 3,000,000
National Bank, Columbus, OH LOC), 5.580%,
2/5/1998
4,000,000 Gerken Materials, Inc., Series 1997, (Huntington 4,000,000
National Bank, Columbus, OH LOC), 5.580%,
2/5/1998
11,315,000 Grand Aire Express, Inc., Series 1997, (National 11,315,000
City Bank, Northwest LOC), 5.550%, 2/5/1998
1,200,000 Great Lakes Brewing Co., (Huntington National 1,200,000
Bank, Columbus, OH LOC), 5.580%, 2/5/1998
2,275,000 Grote Family L.P., (Huntington National Bank, 2,275,000
Columbus, OH LOC), 5.580%, 2/5/1998
2,500,000 Hackleburg, AL, River Birch Homes Project, 2,500,000
(Amsouth Bank N.A., Birmingham LOC), 5.720%,
2/5/1998
12,020,000 Hunt Club Apartments, Inc., (Huntington National 12,020,000
Bank, Columbus, OH LOC), 5.580%, 2/4/1998
775,000 Illinois Development Finance Authority, Series 775,000
1996B Nimlok Co., Project, (Bank One, Illinois,
N.A. LOC), 5.730%, 2/5/1998
19,000,000 JFK Family Borrowing, LLP, Series 1997, (First 19,000,000
National Bank of Maryland, Baltimore LOC),
5.610%, 2/3/1998
245,000 Kenny, Donald R. and Cheryl A., (Huntington 245,000
National Bank, Columbus, OH LOC), 5.630%,
2/5/1998
6,780,000 Kenny, Donald R. and Cheryl A., Series 1995-A, 6,780,000
(National City Bank, Columbus, OH LOC), 5.630%,
2/5/1998
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)VARIABLE RATE OBLIGATIONS--CONTINUED
BANKING--CONTINUED
$ 7,750,000 Kenny, Donald R. and Cheryl A., Series 1995-B, $ 7,750,000
(Huntington National Bank, Columbus, OH LOC),
5.630%, 2/5/1998
4,300,000 Kings Creek Country Club, Inc., Series 1997, 4,300,000
(Corestates Bank N.A., Philadelphia, PA LOC),
5.800%, 2/4/1998
157,000,000 (b)Liquid Asset Backed Securities Trust, Series 157,000,000
1996-3, (Westdeutsche Landesbank Girozentrale
Swap Agreement), 5.614%, 2/17/1998
54,014,080 (b)Liquid Asset Backed Securities Trust, Series 54,014,080
1997-1, (Westdeutsche Landesbank Girozentrale
Swap Agreement), 5.594%, 2/17/1998
16,000,000 Long Lane Master Trust III, Series 1997-C, 16,000,000
5.780%, 2/2/1998
23,000,000 Maryland EDC, Human Genome Series 1997, (First 23,000,000
National Bank of Maryland, Baltimore LOC),
5.610%, 2/3/1998
6,200,000 Medford Convalescent & Nursing Center, Series 6,200,000
1997, (First National Bank of Maryland,
Baltimore LOC), 5.610%, 2/3/1998
3,226,000 Midwest Funding Corp., Series 1991-A Class A-1, 3,226,000
(Bank One, Ohio, N.A. LOC), 5.580%, 2/5/1998
2,487,000 Midwest Funding Corp., Series 1991-B, (Bank One, 2,487,000
Ohio, N.A. LOC), 5.580%, 2/5/1998
3,401,000 Midwest Funding Corp., Series 1991-C, (Bank One, 3,401,000
Ohio, N.A. LOC), 5.580%, 2/5/1998
1,488,000 Midwest Funding Corp., Series 1992-B, (Bank One, 1,488,000
Ohio, N.A. LOC), 5.580%, 2/5/1998
3,473,000 Midwest Funding Corp., Series 1992-C, (Bank One, 3,473,000
Ohio, N.A. LOC), 5.580%, 2/5/1998
4,720,000 Miller, James & Deborah, Series 1997, (First 4,720,000
National Bank of Maryland, Baltimore LOC),
5.610%, 2/3/1998
11,800,000 Mississippi Business Finance Corp., Choctaw 11,800,000
Foods, Inc., (Rabobank Nederland, Utrecht LOC),
5.650%, 2/4/1998
6,960,000 Mississippi Business Finance Corp., Metalloy 6,960,000
Project, (Comerica Bank, Detroit, MI LOC),
5.630%, 2/5/1998
12,000,000 Mississippi Business Finance Corp., Series 1994 12,000,000
Georgia Gulf, (Wachovia Bank of Georgia N.A.,
Atlanta LOC), 5.570%, 2/4/1998
2,000,000 Mississippi Business Finance Corp., Series 1995 2,000,000
Plantation Pointe, LP Project, (SunTrust Bank,
Atlanta LOC), 5.620%, 2/5/1998
4,900,000 NUFUNDING, Inc., Series 1996, (Lasalle National 4,900,000
Bank, Chicago LOC), 5.683%, 2/4/1998
2,800,000 Newbury Industrial Park, Series 1996, 2,800,000
(Huntington National Bank, Columbus, OH LOC),
5.580%, 2/5/1998
5,500,000 Northampton County, PA IDA, Series 1998, 5,500,000
(Dauphin Deposit Bank and Trust LOC), 5.725%,
2/4/1998
2,530,000 Nova University, Inc. Lease Revenue Bonds, 2,530,000
Series 1993 Miami Dolphins Training Facility,
(SunTrust Bank, South Florida LOC), 5.650%,
2/4/1998
2,145,000 Orangeburg Convalescent Care Center, Inc., 2,145,000
Series A 1995, (PNC Bank, Kentucky LOC), 5.601%,
2/2/1998
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)VARIABLE RATE OBLIGATIONS--CONTINUED
BANKING--CONTINUED
$ 4,400,000 Paris, KY, Monaeson Holding Co. Series 1997, $ 4,400,000
(Bank One, Kentucky LOC), 5.580%, 2/5/1998
1,955,000 Port Authority of Saint Paul, MN, Bix Fruit Co. 1,955,000
(Series 1998-B), (Firstar Bank, Milwaukee LOC),
5.880%, 2/5/1998
10,000,000 Primex Funding Corp., Series 1997-A, (Bank One, 10,000,000
Indianapolis, N.A. LOC), 5.580%, 2/5/1998
3,930,000 REAL I Funding Corp., Casto Realty Investments
Series 1996, (Huntington National Bank, Columbus, OH LOC),
5.580%, 2/5/1998 3,930,000
101,639,197 (b)Rabobank Optional Redemption Trust, Series 101,639,197
1997-101, 5.754%, 2/17/1998
2,875,000 Roby Company Ltd. Partnership, (Huntington 2,875,000
National Bank, Columbus, OH LOC), 5.580%,
2/5/1998
7,235,000 Roby Company Ltd. Partnership, (Huntington 7,235,000
National Bank, Columbus, OH LOC), 5.580%,
2/5/1998
12,350,000 Rooker, J.W., (Wachovia Bank of Georgia N.A., 12,350,000
Atlanta LOC), 5.580%, 2/4/1998
200,000 Scranton Times, L.P., (PNC Bank, N.A. LOC), 200,000
5.601%, 2/2/1998
5,600,000 Shenandoah Partners L.P., (Huntington National 5,600,000
Bank, Columbus, OH LOC), 5.580%, 2/5/1998
3,485,000 Spitzer Group, Series 1996A, (Bank One, Ohio, 3,485,000
N.A. LOC), 5.580%, 2/5/1998
1,960,000 Spitzer Group, Series 1996B, (Bank One, Ohio, 1,960,000
N.A. LOC), 5.580%, 2/5/1998
5,315,000 Springfield Limited Series A, (Union Bank of 5,315,000
Switzerland, Zurich LOC), 5.580%, 2/5/1998
3,250,000 Summit County, OH IDR, Series 1997 Malco 3,250,000
Products Inc, (Bank One, Ohio, N.A. LOC),
5.580%, 2/5/1998
47,245,000 Terry Griffin Gate Partners, Ltd., Series 1995, 47,245,000
(Bank One, Kentucky LOC), 5.580%, 2/4/1998
7,300,000 Tift County, GA Development Authority, Chickasha 7,300,000
of Georgia Project Series 1997, (Bank of
Tokyo-Mitsubishi Ltd. LOC), 5.770%, 2/4/1998
5,780,000 Van Dyne Crotty Co., Series 1996, (Huntington 5,780,000
National Bank, Columbus, OH LOC), 5.580%,
2/5/1998
2,830,000 Vista Funding Corp., (Bank One, Ohio, N.A. LOC), 2,830,000
5.580%, 2/5/1998
4,085,000 Vista Funding Corp., Series 1994-A, (Fifth Third 4,085,000
Bank of Northwestern OH LOC), 5.580%, 2/5/1998
9,567,000 Vista Funding Corp., Series 1995-B, (Fifth Third 9,567,000
Bank of Northwestern OH LOC), 5.580%, 2/5/1998
9,810,000 Vista Funding Corp., Series 1995-D, (Fifth Third 9,810,000
Bank of Northwestern OH LOC), 5.580%, 2/5/1998
6,142,000 Vista Funding Corp., Series 1995-E, (Bank One, 6,142,000
Ohio, N.A. LOC), 5.580%, 2/5/1998
5,055,000 Vulcan, Inc., (Amsouth Bank N.A., Birmingham 5,055,000
LOC), 5.670%, 2/5/1998
981,431 Wauseon Manor II L.P., (Huntington National 981,431
Bank, Columbus, OH LOC), 5.580%, 2/5/1998
4,000,000 Westfield, IN IDR, Standard Locknut, Inc. Series 4,000,000
1997, (Bank One, Indianapolis, N.A. LOC),
5.580%, 2/5/1998
2,960,000 Wexner Heritage House, (Huntington National 2,960,000
Bank, Columbus, OH LOC), 5.580%, 2/5/1998
7,250,000 Whetstone Care Center, LLC, Series 1998, (Fifth 7,250,000
Third Bank, Cincinnati LOC), 5.650%, 2/12/1998
2,320,000 YMCA of Central, OH, (Huntington National Bank, 2,320,000
Columbus, OH LOC), 5.580%, 2/5/1998
TOTAL 930,699,835
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(C)VARIABLE RATE OBLIGATIONS--CONTINUED
ELECTRICAL EQUIPMENT--0.4%
$ 8,629,520 GE Engines RPP Trust-1995-1, Series B, $ 8,629,520
(Guaranteed by General Electric Co.), 5.601%,
2/2/1998
1,750,354 GE Engines RPP Trust-1995-1, Series C, 1,750,354
(Guaranteed by General Electric Co.), 5.692%,
2/2/1998
22,613,059 Northwest Airlines, Inc., (Guaranteed by General 22,613,059
Electric Co.), 5.601%, 2/2/1998
TOTAL 32,992,933
FINANCE-RETAIL--1.4%
60,000,000 Associates Corp. of North America, 5.730%, 59,973,178
2/2/1998
44,000,000 Carco Auto Loan Master Trust 1993-2, (Series 44,000,000
1993-2 Class A1), 5.855%, 2/17/1998
TOTAL 103,973,178
INSURANCE--4.7%
50,000,000 First Allmerica Financial Life Insurance Co., 50,000,000
5.710%, 4/16/1998
14,000,000 Jackson National Life Insurance Co., 5.840%, 14,000,000
2/2/1998
108,421,893 (b)Liquid Asset Backed Securities Trust, Series 108,421,892
1997-3 Senior Notes, (Guaranteed by AMBAC),
5.876%, 3/27/1998
35,000,000 Peoples Security Life Insurance Company, 5.829%, 35,000,000
2/2/1998
30,000,000 Peoples Security Life Insurance Company, 6.139%, 30,000,000
2/2/1998
50,000,000 Security Life of Denver Insurance Co., 5.729%, 50,000,000
2/2/1998
10,000,000 SunAmerica Life Insurance Company, 5.723%, 10,000,000
2/2/1998
44,000,000 Travelers Insurance Company, 5.837%, 2/20/1998 44,000,000
TOTAL 341,421,892
MUNICIPAL--0.3%
25,100,000 Columbus, OH, 5.730%, 2/5/1998 25,100,000
;TOTAL VARIABLE RATE OBLIGATIONS 1,434,187,838
SHORT-TERM MUNICIPAL SECURITIES--0.0%
BANKING--0.0%
3,000,000 White Bear Lake, MN City of, Series 1993, 3,000,000
(Norwest Bank Minnesota, N.A. LOC), 6.160%,
11/1/1998
TIME DEPOSITS--7.2%
BANKING--7.2%
150,000,000 Bank of Tokyo-Mitsubishi Ltd., 5.625%, 2/2/1998 150,000,000
200,000,000 Chase Manhattan Bank (USA) N.A., Wilmington, 200,000,000
5.625%, 2/2/1998
100,000,000 Deutsche Bank, AG, 5.625%, 2/2/1998 100,000,000
72,000,000 Mellon Bank N.A., Pittsburgh, 5.625%, 2/2/1998 72,000,000
(D)REPURCHASE AGREEMENTS--19.2%
TOTAL TIME DEPOSITS 522,000,000
78,000,000 ABN AMRO Chicago Corp., 5.650%, dated 1/30/1998, 78,000,000
due 2/2/1998
284,500,000 Bear, Stearns and Co., 5.650%, dated 1/30/1998, 284,500,000
due 2/2/1998
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(D)REPURCHASE AGREEMENTS--CONTINUED
$ 60,000,000 Chase Government Securities, Inc., 5.550%, dated $ 60,000,000
1/20/1998, due 4/20/1998
371,165,000 Goldman Sachs Group, LP, 5.650%, dated 371,165,000
1/30/1998, due 2/2/1998
188,800,000 HSBC Securities, Inc., 5.650%, dated 1/30/1998, 188,800,000
due 2/2/1998
32,000,000 Salomon Smith Barney Holdings, Inc., 5.650%, 32,000,000
dated 1/30/1998, due 2/2/1998
85,620,000 Societe Generale, New York, 5.600%, dated 85,620,000
1/30/1998, due 2/2/1998
25,000,000 State Street Bank and Trust Co., 5.600%, dated 25,000,000
1/30/1998, due 2/2/1998
38,800,000 Swiss Bank Capital Markets, 5.550%, dated 38,800,000
1/30/1998, due 2/2/1998
152,761,000 UBS Securities, Inc., 5.590%, dated 1/30/1998, 152,761,000
due 2/2/1998
86,500,000 UBS Securities, Inc., 5.650%, dated 1/30/1998, 86,500,000
due 2/2/1998
TOTAL REPURCHASE AGREEMENTS 1,403,146,000
TOTAL INVESTMENTS (AT AMORTIZED COST)(E) $ 7,311,358,402
</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, 1998, these securities amounted to
$521,075,169 which represents 7.1% 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
($7,299,038,385) at January 31, 1998.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation EDC --Economic Development
Commission IDA --Industrial Development Authority IDB --Industrial Development
Bond IDR --Industrial Development Revenue LLC --Limited Liability Corporation
LOC --Letter of Credit LP --Limited Partnership PLC --Public Limited Company SA
- --Support Agreement
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
PRIME OBLIGATIONS FUND
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Investments in repurchase agreements $ 1,403,146,000
Investments in securities 5,908,212,402
Total investments in securities, at amortized cost and value $ 7,311,358,402
Income receivable 31,289,370
Receivable for shares sold 742
Total assets 7,342,648,514
LIABILITIES:
Income distribution payable 34,436,485
Payable to Bank 7,943,350
Accrued expenses 1,230,294
Total liabilities 43,610,129
NET ASSETS for 7,299,038,385 shares outstanding $ 7,299,038,385
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION
PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$4,030,157,091 / 4,030,157,091 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$3,268,881,294 / 3,268,881,294 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
PRIME OBLIGATIONS FUND
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 205,068,083
EXPENSES:
Investment advisory fee $ 7,152,445
Administrative personnel and services fee 2,698,738
Custodian fees 267,669
Transfer and dividend disbursing agent fees and 101,584
expenses
Directors'/Trustees' fees 23,828
Auditing fees 6,440
Legal fees 6,992
Portfolio accounting fees 260,839
Shareholder services fee--Institutional Shares 5,036,109
Shareholder services fee--Institutional Service 3,904,447
Shares
Share registration costs 259,256
Printing and postage 16,008
Insurance premiums 18,768
Taxes 48,668
Miscellaneous 16,744
Total expenses 19,818,535
Waivers --
Waiver of investment advisory fee $ (3,568,180)
Waiver of shareholder services fee--Institutional (5,036,109)
Shares
Total waivers (8,604,289)
Net expenses 11,214,246
Net investment income $ 193,853,837
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED
1998 JULY 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 193,853,837 $ 264,242,252
DISTRIBUTIONS TO
SHAREHOLDERS--
Distributions from net
investment income
Institutional Shares (111,608,334) (175,275,611)
Institutional Service Shares (82,245,503) (88,966,641)
Change in net assets resulting
from distributions to shareholders (193,853,837) (264,242,252)
SHARE TRANSACTIONS--
Proceeds from sale of shares 38,824,962,543 57,987,041,825
Net asset value of shares issued to
shareholders in payment of distributions
declared 46,114,748 78,154,545
Cost of shares redeemed (37,397,118,285) (56,569,738,161)
Change in net assets resulting
from share transactions 1,473,959,006 1,495,458,209
Change in net assets 1,473,959,006 1,495,458,209
NET ASSETS:
Beginning of period 5,825,079,379 4,329,621,170
End of period $ 7,299,038,385 $ 5,825,079,379
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS
Net investment income 0.03 0.05 0.05 0.06 0.03 0.03
LESS DISTRIBUTIONS
Distributions from net (0.03) (0.05) (0.05) (0.06) (0.03) (0.03)
investment income
NET ASSET VALUE, END OF $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
PERIOD
TOTAL RETURN(A) 2.82% 5.45% 5.58% 5.65% 3.47% 3.25%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.20%* 0.20% 0.20% 0.20% 0.20% 0.20%
Net investment income 5.54%* 5.35% 5.43% 5.60% 3.47% 3.20%
Expense waiver/ 0.35%* 0.36% 0.36% 0.38% 0.14% 0.09%
reimbursement(b)
SUPPLEMENTAL DATA
Net assets, end of period $4,030,157 $3,588,082 $3,032,602 $2,457,797 $1,250,979 $1,098,159
(000 omitted)
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
1998 1997 1996 1995 1994(A)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
PERIOD
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.05 0.05 0.003
LESS DISTRIBUTIONS
Distributions from net (0.03) (0.05) (0.05) (0.05) (0.003)
investment income
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.69% 5.19% 5.32% 5.38% 0.30%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.45%* 0.45% 0.45% 0.45% 0.34%*
Net investment income 5.27%* 5.11% 5.13% 5.66% 4.68%*
Expense waiver/reimbursement(c) 0.10%* 0.11% 0.11% 0.13% 0.14%*
SUPPLEMENTAL DATA
Net assets, end of period $3,268,881 $2,236,997 $1,297,019 $500,954 $9,387
(000 omitted)
</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)
NOTES TO FINANCIAL STATEMENTS
PRIME OBLIGATIONS FUND
JANUARY 31, 1998 (UNAUDITED)
ORGANIZATION
Money Market Obligations Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act") as an open-end, management
investment company. The Trust consists of six portfolios. The financial
statements included herein are only those of Prime Obligations Fund (the
"Fund"), a diversified portfolio. The financial statements of the other
portfolios are presented separately. The assets of each portfolio are segregated
and a shareholder's interest is limited to the portfolio in which shares are
held. The 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.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS
The Fund uses the amortized cost method to value its portfolio securities in
accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS
It is the policy of the Fund to require the custodian bank to take possession,
to have legally segregated in the Federal Reserve Book Entry System, or to have
segregated within the custodian bank's vault, all securities held as collateral
under repurchase agreement transactions. Additionally, procedures have been
established by the Fund to monitor, on a daily basis, the market value of each
repurchase agreement's collateral to ensure that the value of collateral at
least equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/ dealers, which are deemed by
the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less than
the repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES, AND DISTRIBUTIONS
Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL TAXES
It is the Fund's policy to comply with the provisions of the Code applicable to
regulated investment companies and to distribute to shareholders each year
substantially all of its income. Accordingly, no provisions for federal tax are
necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Fund may engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintains security
positions such that sufficient liquid assets will be available to make payment
for the securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
RESTRICTED SECURITIES
Restricted securities are securities that may only be resold upon registration
under federal securities laws or in transactions exempt from such registration.
Many restricted securities may be resold in the secondary market in transactions
exempt from registration. In some cases, the restricted securities may be resold
without registration upon exercise of a demand feature. Such restricted
securities may be determined to be liquid under criteria established by the
Board of Trustees. The Fund will not incur any registration costs upon such
resales. Restricted securities are valued at amortized cost in accordance with
Rule 2a-7 under the Investment Company Act of 1940.
Additional information on each restricted security held at January 31, 1998 is
as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
<S> <C> <C>
Liquid Asset Backed Securities Trust, Series 1996-3 8/15/1996 $ 157,000,000
Liquid Asset Backed Securities Trust, Series 1997-3 6/27/1997 108,421,893
Liquid Asset Backed Securities Trust, Series 1997-1 2/19/1997 54,014,080
Rabobank Optional Redemption Trust 4/17/1997 - 11/7/1997 101,639,197
Triangle Funding Ltd. 11/4/1997 100,000,000
</TABLE>
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses, and revenues reported in
the financial statements. Actual results could differ from those estimated.
OTHER
Investment transactions are accounted for on the trade date.
SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At January 31, 1998, capital paid-in aggregated $7,299,038,385.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED
INSTITUTIONAL SHARES 1998 JULY 31, 1997
<S> <C> <C>
Shares sold 26,361,559,393 41,776,217,888
Shares issued to
shareholders in payment of
distributions declared 30,975,982 53,083,360
Shares redeemed (25,950,460,594) (41,273,820,945)
Net change resulting
from Institutional Share
transactions 442,074,781 555,480,303
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED
INSTITUTIONAL SERVICE SHARES 1998 JULY 31, 1997
<S> <C> <C>
Shares sold 12,463,403,150 16,210,823,937
Shares issued to 15,138,766 25,071,185
shareholders in
payment of
distributions declared
Shares redeemed (11,446,657,691) (15,295,917,216)
Net change resulting
from Institutional Service
Share transactions 1,031,884,225 939,977,906
Net change resulting from
share transactions 1,473,959,006 1,495,458,209
</TABLE>
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE
Federated Management, the Fund's investment adviser (the "Adviser"), receives
for its services an annual investment advisory fee equal to 0.20% 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
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
Anthony R. Bosch
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves risk, including possible
loss of principal. Although money market funds seek to maintain a stable net
asset value of $1.00 per share, there is no assurance that they will be able to
do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses, and other information.
Federated Securities Corp., Distributor
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
[Graphic]
PRIME OBLIGATIONS FUND
SEMI-ANNUAL REPORT TO SHAREHOLDERS
JANUARY 31, 1998
[Graphic]
Cusip 60934N203
Cusip 60934N708
1022002 (3/98)
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Tax-Free
Obligations Fund, a portfolio of Money Market Obligations Trust. This report
covers the first half of the fund's fiscal year, which is the six-month period
ended January 31, 1998. It begins with an investment review of 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 financial
statements.
Over the six-month reporting period, tax-free dividends paid to shareholders of
the fund's Institutional Shares and Institutional Service Shares each totaled
$0.02 per share. At the end of the reporting period, net assets surpassed the
$2.5 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. Your questions and comments are always welcome.
Sincerely,
[Graphic]
J. Christopher Donahue
President
March 15, 1998
* Income may be subject to the federal alternative minimum tax.
** Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or guaranteed by the U.S. government.
INVESTMENT REVIEW
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 per share.
The Fund is rated AAA by Fitch IBCA, Inc. ("Fitch").* For the six-month
reporting period ended January 31, 1998, the Fund's net assets increased from
$2.1 billion to $2.5 billion. As of January 31, 1998, the effective average
maturity was 45 days.
The U.S. economy was robust in 1997 with gross domestic product ("GDP") growing
at 3.9%. At the same time, inflationary pressures remained benign falling to
1.9%, while the unemployment rate fell to below 5.0%. Despite the tightening in
the labor markets and strong domestic demand, the Federal Reserve Board (the
"Fed") did not further raise interest rates in 1997 after its quarter point
nudge in March 1997. Healthy productivity growth, weak commodity prices, and
declining import prices resulting from the Asian crisis most likely eliminated
any Fed rate increase during the six-month period.
Movements in short-term interest rates in the second half of 1997 reflected the
market's shifting sentiment on Fed policy. The one-year Treasury bill traded as
high as 5.60% in August as investors feared a rate hike. However, as the
economic news from the Pacific Rim worsened, the one-year Treasury-bill rate
fell to 5.20% by the close of the reporting period. Investors believed that the
impact of the Asian crisis would cause GDP to slow dramatically in 1998.
However, at the end of the reporting period, in late January, the market
received news that the U.S. economy was accelerating. This caused market
sentiment, on the strength of the economy, to reverse again causing one-year
Treasury bills to go back up to 5.50% levels.
In addition to economic fundamentals, short-term municipal securities were
strongly influenced by technical factors over this reporting period, notably the
end of the summer note issuance season and year-end cash flows. Variable rate
demand notes ("VRDNs"), which comprise more than 50% of the fund's assets,
started the reporting period in the 3.40% range, but moved sharply higher in
September to above 4.00% as supply and demand imbalances occurred. Yields then
declined in October before rising to the 4.00% range at year end due to
traditional year end selling pressures. In early January 1998, as participants
looked to reinvest large coupon payments and heavy cash inflows, VRDN yields
fell and ended the reporting period where they began, in the 3.40% range. Over
the six-month reporting period, VRDN yields averaged roughly 67% of taxable
rates making them attractive for investors at the 35% or higher federal tax
brackets.
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 45-50 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.
PORTFOLIO OF INVESTMENTS
TAX-FREE OBLIGATIONS FUND
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--100.4%
ALABAMA--2.6%
$ 3,830,000 Alabama HFA, 1995 Series E Weekly VRDNs (Royal Gardens $ 3,830,000
Apartments Project)/(SouthTrust Bank of Alabama, Birmingham
LOC)
6,500,000 Anniston, AL, IDB, (Series 1989-A) Weekly VRDNs (Union 6,500,000
Foundry Co.)/(Amsouth Bank N.A., Birmingham LOC)
3,650,000 Arab, AL IDB, (Series 1989) Weekly VRDNs (SCI 3,650,000
Manufacturing, Inc.)/ (Bank of Tokyo-Mitsubishi Ltd. LOC)
1,100,000 Arab, AL IDB, Revenue Refunding Bonds (Series 1989) Weekly 1,100,000
VRDNs (SCI Manufacturing, Inc.)/(Bank of Tokyo-Mitsubishi
Ltd. LOC)
5,000,000 Birmingham, AL IDA, Revenue Refunding Bonds Weekly VRDNs 5,000,000
(S.P. Hotel Company)/ (Amsouth Bank N.A., Birmingham LOC)
3,500,000 Birmingham, AL Medical Clinic Board, Medical Clinic Revenue 3,500,000
Bonds (Series 1996) Weekly VRDNs (St. Martin's In The
Pines)/(Regions Bank, Alabama LOC)
3,095,000 Birmingham, AL Special Care Facilities Financing Authority, 3,095,000
Capital Improvement Revenue Bonds (Series 1995) Weekly
VRDNs (Methodist Home for the Aging (AL))/(SouthTrust Bank
of Alabama, Birmingham LOC)
3,500,000 Cherokee, AL IDB, IDR Refunding Bonds (Series 1993) Weekly 3,500,000
VRDNs (BOC Group, Inc.)/ (Wachovia Bank of Georgia N.A.,
Atlanta LOC)
15,985,000 Columbia, AL IDB, CDC Municipal Products, Inc. (Series 15,985,000
1997I) Weekly VRDNs (Alabama Power Co.)/(AMBAC INS)/(CDC
Municipal Products, Inc. LIQ)
3,300,000 Homewood, AL IDA Weekly VRDNs (Mountain Brook Inn (Homewood 3,300,000
AL))/(SouthTrust Bank of Alabama, Birmingham LOC)
1,406,000 Irondale, AL IDB, Revenue Bonds (Series 1989) Weekly VRDNs 1,406,000
(Collateral Mortgage, Ltd.)/ (SouthTrust Bank of Alabama,
Birmingham LOC)
5,500,000 Jefferson County, AL, GO Warrants (Series 1996) Weekly 5,500,000
VRDNs (Bayerische Landesbank Girozentrale LOC)
2,260,000 Madison, AL IDA, (Series A) Weekly VRDNs (Executive 2,260,000
Inn)/(Amsouth Bank N.A., Birmingham LOC)
2,500,000 Mobile, AL IDA Weekly VRDNs (McRae's Industries, 2,500,000
Inc.)/(Nationsbank, N.A., Charlotte LOC)
500,000 Mobile, AL IDB, PCR (Series 1993A) Weekly VRDNs (Alabama 500,000
Power Co.)/ (Alabama Power Co. GTD)
1,000,000 Mobile, AL IDB, Pollution Control Refunding Revenue Bonds, 1,000,000
(Series 1992) Weekly VRDNs (Air Products & Chemicals,
Inc.)/(Air Products & Chemicals, Inc. GTD)
600,000 Montgomery, AL IDB, (Series 1988A) Weekly VRDNs (Smith 600,000
Industries)/(SunTrust Bank, Atlanta LOC)
1,290,000 Tuscaloosa County, AL Port Authority, (Series 1989A) Weekly 1,290,000
VRDNs (Capstone Hotel Ltd.)/ (SouthTrust Bank of Alabama,
Birmingham LOC)
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
ALABAMA--CONTINUED
$ 880,000 Tuscaloosa, AL IDB, Revenue Refunding Bonds (Series 1994) $ 880,000
Weekly VRDNs (Harco, Inc.)/ (Amsouth Bank N.A., Birmingham
LOC)
TOTAL 65,396,000
ARIZONA--2.3%
22,900,000 Apache County, AZ IDA, 1983 (Series A) Weekly VRDNs (Tucson 22,900,000
Electric Power Co.)/ (Toronto-Dominion Bank LOC)
6,000,000 Apache County, AZ Weekly VRDNs (Tucson Electric Power 6,000,000
Co.)/(Toronto-Dominion Bank LOC)
3,900,000 Arizona Health Facilities Authority Weekly VRDNs 3,900,000
(University Physicians, Inc.)/(Bank One, Arizona N.A. LOC)
6,800,000 Arizona Health Facilities Authority, Pooled Loan Program 6,800,000
Revenue Bonds (Series 1985B) Weekly VRDNs (FGIC INS)/(Chase
Manhattan Bank N.A., New York LIQ)
1,000,000 Arizona Insured Municipal Securities Trust, (Series 1996A) 1,000,000
Weekly VRDNs (Chandler Street and Highway)/(MBIA
INS)/(Norwest Bank Minnesota, N.A. LIQ)
1,500,000 Arizona Insured Municipal Securities Trust, (Series 1996C) 1,500,000
Weekly VRDNs (Maricopa County, AZ Unified School District
No. 93)/(FGIC INS)/(Norwest Bank Minnesota, N.A. LIQ)
1,250,000 Arizona Insured Municipal Securities Trust, (Series 1996E) 1,250,000
Weekly VRDNs (Scottsdale (Memorial Hospitals))/(AMBAC
INS)/(Norwest Bank Minnesota, N.A. LIQ)
9,940,000 Chandler, AZ IDA, (SMP II Limited Partnership) Weekly VRDNs 9,940,000
(Bank One, Arizona N.A. LOC)
3,800,000 Gila County, AZ IDA Weekly VRDNs (Cobre Valley 3,800,000
Hospital)/(Bank One, Arizona N.A. LOC)
2,000,000 Pima County, AZ IDA Weekly VRDNs (Tucson Electric Power 2,000,000
Co.)/(Toronto-Dominion Bank LOC)
TOTAL 59,090,000
ARKANSAS--0.3%
6,000,000 Pine Bluff, AR, Industrial Development Revenue Refunding 6,000,000
Bonds (Series 1997) Weekly VRDNs (Camden Wire Co.,
Inc.)/(Chase Manhattan Bank N.A., New York LOC)
1,000,000 Sheridan, AR IDA Weekly VRDNs (H.H. Robertson Co.)/(PNC 1,000,000
Bank, N.A. LOC)
TOTAL 7,000,000
CALIFORNIA--8.0%
3,000,000 California PCFA, (1996 Series C) Daily VRDNs (Pacific Gas & 3,000,000
Electric Co.)/(Bank of America NT and SA, San Francisco
LOC)
60,345,000 California Public Capital Improvements Financing Authority, 60,345,000
Trust Receipts (Series 1996 FR-3) Weekly VRDNs (MBIA
INS)/(Bank of New York, New York LIQ)
43,500,000 California State, 4.50% RANs, 6/30/1998 43,644,258
39,000,000 California State, Trust Receipts (Series 1997) Daily VRDNs 39,000,000
(Bank of New York, New York LIQ)
30,000,000 California Transit Finance Authority, VRDB's (Series 1997) 30,000,000
Weekly VRDNs (FSA INS)/(Credit Suisse First Boston LIQ)
20,000,000 Riverside County, CA, 4.50% TRANs, 6/30/1998 20,043,145
2,575,000 Roseville, CA City School District, 4.45% TRANs, 9/10/1998 2,583,239
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
CALIFORNIA--CONTINUED
$ 2,780,000 Roseville, CA Joint Union High School District, 4.45% $ 2,788,895
TRANs, 9/10/1998
TOTAL 201,404,537
COLORADO--0.7%
2,825,000 Denver (City & County), CO, 4.15% TOBs (Blake Street 2,825,000
Compendium)/(Norwest Bank Minnesota, N.A. LOC) 12/15/1998
13,660,000 Denver (City & County), CO, MERLOTs (Series 1997E) Weekly 13,660,000
VRDNs (Department of Aviation Airport System)/(MBIA
INS)/(Corestates Bank N.A., Philadelphia, PA LIQ)
TOTAL 16,485,000
DISTRICT OF COLUMBIA--1.0%
2,070,000 District of Columbia Housing Finance Agency, Multifamily 2,070,000
Housing, 3.90% TOBs (Chastleton Project)/(Nationsbank,
N.A., Charlotte LOC), Optional Tender 7/1/1998
5,000,000 District of Columbia, (Series 1998C), 5.00% TRANs (Union 5,036,715
Bank of Switzerland, Zurich LOC), 9/30/1998
14,400,000 District of Columbia, (Series B), 4.50% TRANs (Morgan 14,457,586
Guaranty Trust Co., New York and Union Bank of Switzerland,
Zurich LOCs), 9/30/1998
3,575,000 District of Columbia, Revenue Bonds (Series 1997B) Weekly 3,575,000
VRDNs (Association of American Medical Colleges)/(AMBAC
INS)/(Chase Manhattan Bank N.A., New York LIQ)
TOTAL 25,139,301
FLORIDA--6.5%
6,700,000 Broward County, FL HFA, (Series 1997) Weekly VRDNs
6,700,000 (Jacaranda Village Apartments)/ (Marine Midland
Banks, Inc.
LOC)
2,980,000 Broward County, FL Health Facility Authority, Revenue Bonds 2,980,000
Weekly VRDNs (John Knox Village of Florida)/(First Union
National Bank, Charlotte, NC LOC)
20,355,000 Dade County, FL Water & Sewer System Weekly VRDNs (FGIC 20,355,000
INS)/(Commerzbank AG, Frankfurt LIQ)
9,730,000 Eustis Health Facilities Authority, FL, Health Facilities 9,730,000
Revenue Bonds, (Series 1992) Weekly VRDNs (Florida
Hospital/Waterman, Inc. Project)/(SunTrust Bank, Central
Florida LOC)
5,120,000 Florida State Board of Education Administration, (CR55), 5,120,000
(Series 1989A), 3.75% TOBs (Citibank N.A., New York LIQ),
Optional Tender 3/1/1998
8,570,000 Gulf Breeze, FL, Floating Rate Demand Revenue Bonds (Series 8,570,000
1985 B) Weekly VRDNs (FGIC INS)/(Credit Local de France
LIQ)
13,900,000 Gulf Breeze, FL, Variable Rate Demand Revenue Bonds (Series 13,900,000
1995A) Weekly VRDNs (Florida Municipal Bond Fund)/(Barnett
Bank, N.A. LOC)
35,000,000 Highlands County, FL Health Facilities, (Series 1996A 35,000,000
Accounts Receivable) Weekly VRDNs (Adventist Health
System)/(Capital Markets Assurance Corp. INS)/(First
National Bank of Chicago LIQ)
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
FLORIDA--CONTINUED
$ 22,200,000 Highlands County, FL Health Facilities, Variable Rate $ 22,200,000
Demand Revenue Bonds (Series 1996A) Weekly VRDNs (Adventist
Health System)/(SunTrust Bank, Central Florida LOC)
15,000,000 Highlands County, FL Health Facilities, Variable Rate 15,000,000
Demand Revenue Bonds (Series 1997-A) Weekly VRDNs
(Adventist Health System)/(SunTrust Bank, Central Florida
LOC)
5,500,000 Orange County, FL, Health Facilities Authority, Refunding 5,500,000
Program Revenue Bonds ACES (Series 1985), 3.55% CP (MBIA
LIQ) (SunTrust Bank, Central Florida LIQ), Mandatory Tender
2/25/1998
1,700,000 Orange County, FL, Health Facilities Authority, Refunding 1,700,000
Program Revenue Bonds ACES (Series 1985), 3.60% CP (MBIA
LIQ) (SunTrust Bank, Central Florida LIQ), Mandatory Tender
6/8/1998
6,200,000 Orlando, FL (City of), Capital Improvement Commerial Paper 6,200,000
Notes, (1994 Series-A), 3.55% CP, Mandatory Tender 4/8/1998
10,600,000 Tampa, FL, Occupational License Tax Bonds (Series 1996A) 10,600,000
Weekly VRDNs (FGIC INS)/ (FGIC Securities Purchase, Inc.
LIQ)
TOTAL 163,555,000
GEORGIA--2.4%
4,000,000 Atlanta, GA, Urban Residential Finance Authority, 4,000,000
Multifamily Rental Housing Revenue Refunding Bonds (Series
1988A) Weekly VRDNs (West Paces Club Towers
Project)/(Societe Generale, Paris LOC)
2,400,000 Atlanta, GA, Urban Residential Finance Authority, 2,400,000
Residential Construction Revenue Bonds, (Series 1995)
Weekly VRDNs (Summerhill Neighborhood Bond Program)/(First
Union National Bank, Charlotte, NC LOC)
22,000,000 Burke County, GA Development Authority, (Series 1996), 22,000,000
3.90% TOBs (Oglethorpe Power Corp. Vogtle Project),
Optional Tender 4/30/1998
15,000,000 Burke County, GA Development Authority, (Series 1997B), 15,000,000
3.80% Bonds (Oglethorpe Power Corp. Vogtle Project)/(AMBAC
INS), 5/28/1998
2,000,000 Clayton County, GA Housing Authority, Revenue Refunding 2,000,000
Bonds (Series 1992) Weekly VRDNs (Oxford Townhomes
Project)/(Amsouth Bank N.A., Birmingham LOC)
1,500,000 De Kalb County, GA Development Authority, (Series 1992) 1,500,000
Weekly VRDNs (American Cancer Society, GA)/(SunTrust Bank,
Atlanta LOC)
13,000,000 Georgia State Municipal Gas Authority, Gas Revenue Bonds 13,000,000
(Series C) Weekly VRDNs (Bank of America NT and SA, San
Francisco, Bayerische Landesbank Girozentrale, Morgan
Guaranty Trust Co., New York and Wachovia Bank of Georgia
N.A., Atlanta LOCs)
TOTAL 59,900,000
IDAHO--0.5%
13,000,000 Idaho State, (Series 1997), 4.625% TANs, 6/30/1998 13,038,048
ILLINOIS--10.9%
11,624,000 ABN AMRO Chicago Corp. 1997-1 LeaseTOPS Trust Weekly VRDNs 11,624,000
(Lasalle National Bank, Chicago LIQ)/(Lasalle National
Bank, Chicago LOC)
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
ILLINOIS--CONTINUED
$ 21,200,000 Chicago O'Hare International Airport, General Airport $ 21,200,000
Second Lein Revenue Bonds, (Series 1994C) Weekly VRDNs
(Societe Generale, New York LOC)
12,000,000 Chicago, IL Board of Education, MERLOTs (Series 1997E) 12,000,000
Weekly VRDNs (AMBAC INS)/ (Corestates Bank N.A.,
Philadelphia, PA LIQ)
24,855,000 Chicago, IL Board of Education, MERLOTs (Series 1997H) 24,855,000
Weekly VRDNs (AMBAC INS)/ (Corestates Bank N.A.,
Philadelphia, PA LIQ)
20,000,000 Chicago, IL Board of Education, Variable Rate Certificates
20,000,000 (Series 1996BB) Weekly VRDNs (MBIA INS)/(Bank
of America NT and SA, San Francisco LIQ)
2,800,000 Chicago, IL Weekly VRDNs (Canadian Imperial Bank of 2,800,000
Commerce, Toronto LOC)
20,000,000 Chicago, IL, MERLOTs (Series 1997 V) Weekly VRDNs
(Chicago, 20,000,000 IL Water Revenue Bonds)/ (FGIC
INS)/(Corestates Bank N.A., Philadelphia, PA LIQ)
9,905,000 Chicago, IL, Water Revenue Bonds (PT-129) Weekly VRDNs 9,905,000
(FGIC INS)/(Bayerische Hypotheken-Und Wechsel-Bank AG LIQ)
350,000 Darien, IL IDA, (Series 1989C) Weekly VRDNs (KinderCare 350,000
Learning Centers, Inc.)/ (Toronto-Dominion Bank LOC)
3,000,000 Illinois Development Finance Authority Weekly VRDNs 3,000,000
(Newlywed Food)/(Mellon Bank N.A., Pittsburgh LOC)
2,700,000 Illinois Development Finance Authority, (Series 1997) 2,700,000
Weekly VRDNs (Ada S. McKInley Community Services,
Inc.)/(Harris Trust & Savings Bank, Chicago LOC)
15,700,000 Illinois Development Finance Authority, PCR, (Series 1996B) 15,700,000
Weekly VRDNs (Commonwealth Edison Co.)/(AMBAC INS)/(Bank of
New York, New York LIQ)
6,000,000 (b)Illinois Development Finance Authority, PT-131 (Series 6,000,000
1995A), 3.95% TOBs (Catholic Health Partners
Services)/(Connie Lee INS)/(Credit Suisse First Boston
LIQ), Mandatory Tender 10/1/1998
5,000,000 Illinois Educational Facilities Authority, Revenue Bonds 5,000,000
(Series 1995) Weekly VRDNs (Ravinia Festival Association
(IL))/(NBD Bank, Michigan LOC)
16,100,000 Illinois Health Facilities Authority Weekly VRDNs (OSF 16,100,000
Health Care Systems)
19,400,000 Illinois Health Facilities Authority, (Series 1989A) Weekly 19,400,000
VRDNs (Methodist Health Services Corp.)/(Fuji Bank, Ltd.,
Tokyo LOC)
35,000,000 Illinois Health Facilities Authority, Revenue Bonds (Series 35,000,000
1985B) Weekly VRDNs (OSF Health Care Systems)/(Bank of
America Illinois and Rabobank Nederland, Utrecht LIQs)
4,900,000 Illinois Health Facilities Authority, Revenue Bonds (Series 4,900,000
1997) Weekly VRDNs (Rehabilitation Institute of
Chicago)/(Bank of America Illinois LOC)
22,500,000 Illinois Health Facilities Authority, Revenue Refunding 22,500,000
Bonds (Series 1997B) Weekly VRDNs (Advocate Health Care
Network)/(First National Bank of Chicago, Harris Trust &
Savings Bank, Chicago and Northern Trust Co., Chicago, IL
LIQs)
1,000,000 Illinois Health Facilities Authority, Revolving Fund Pooled 1,000,000
Financing Program (Series 1985F) Weekly VRDNs (NBD Bank,
Michigan LOC)
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
ILLINOIS--CONTINUED
$ 5,000,000 Illinois Health Facilities Authority, Variable Rate $ 5,000,000
Adjustable Demand Revenue Bonds (Series 1996), 3.90% CP
(Evanston Hospital Corp.), Mandatory Tender 7/31/1998
14,000,000 Illinois Housing Development Authority, (1997 Subseries 14,000,000
B-1), 4.10% TOBs, Mandatory Tender 7/7/1998
TOTAL 273,034,000
INDIANA--3.1%
830,000 Dale, IN IDA Weekly VRDNs (Spencer Industries)/(National 830,000
City Bank, Kentucky LOC)
5,000,000 Hammond Local Public Improvement Bond Bank, Advance Funding 5,022,418
Program Notes (Series A-2), 4.30% TANs, 1/7/1999
10,200,000 Indiana Bond Bank, Advance Funding Program Notes (Series 10,222,032
1998 A-1), 4.00% TANs (Lasalle National Bank, Chicago LOC),
7/28/1998
32,000,000 Indiana Bond Bank, Advance Funding Program Notes (Series 32,119,360
1998 A-2), 4.00% TANs (Lasalle National Bank, Chicago LOC),
1/20/1999
1,745,000 Indiana Health Facilities Finance Authority Rehabilitation 1,745,000
Center Weekly VRDNs (Crossroads Rehabilitation
Center)/(Bank One, Indianapolis, N.A. LOC)
8,075,000 Indianapolis, IN Local Public Improvement Bond Bank, 8,090,398
(Series 1997F), 4.25% TANs (Marion County, IN), 7/9/1998
4,735,000 Indianapolis, IN, Variable Rate Demand Economic Development 4,735,000
Revenue Bonds, (Series 1995) Weekly VRDNs (Pleasant Run
Children's Homes, Inc.)/(Fifth Third Bank, Cincinnati LOC)
4,900,000 Lafayette School Corp., IN, 4.20% TANs, 12/30/1998
4,913,723 10,000,000 Rockport, IN, (Series 1985A) Weekly VRDNs
(Indiana Michigan 10,000,000
Power Company Project)/ (Swiss Bank Corp., Basle LOC)
TOTAL 77,677,931
IOWA--0.6%
5,000,000 Cedar Rapids Community School District, IA, General 5,009,390
Obligation Anticipatory Warrants, (Series 1997), 4.375%
TRANs, 7/1/1998
10,000,000 Iowa School Corporations, (Series 1997-98B), 4.25% TRANs 10,066,859
(FSA INS), 1/28/1999
TOTAL 15,076,249
KANSAS--0.1%
3,420,000 Salina, KS, GO Municipal Temporary Notes (Series 1997-1), 3,420,000
3.90% BANs, 3/1/1998
KENTUCKY--2.0%
1,260,000 Boone County, KY, Revenue Refunding Bonds Weekly VRDNs 1,260,000
(Spring Meadow Associates)/ (Huntington National Bank,
Columbus, OH LOC)
6,835,000 Jefferson County, KY, (Series 1997) Weekly VRDNs (First 6,835,000
Trust Restoration Partners)/ (Bank One, Kentucky LOC)
7,500,000 Jefferson County, KY, Adjustable Rate Industrial Building 7,500,000
Revenue Refunding Bonds (Series 1997) Weekly VRDNs (Kosmos
Cement Co. Partnership)/(Societe Generale LOC)
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
KENTUCKY--CONTINUED
$ 35,000,000 Owensboro, KY, (Series 1996) Weekly VRDNs (Owensboro Mercy $ 35,000,000
Health System, Inc. Project)/ (Bank of America Illinois
LOC)
TOTAL 50,595,000
LOUISIANA--0.6%
800,000 Calcasieu Parish, LA, IDB, PCR Bonds Weekly VRDNs (Citgo 800,000
Petroleum Corp.)/(Westdeutsche Landesbank Girozentrale LOC)
6,415,000 Louisiana PFA, (Series 1985A) Weekly VRDNs (FGIC 6,415,000
INS)/(Societe Generale, Paris LIQ)
4,000,000 Louisiana PFA, (Series 1997D), 4.40% TRANs (Orleans Parish, 4,018,754
LA School Board), 12/10/1998
3,200,000 Louisiana PFA, Hospital Revenue Bonds Series 1995 Weekly 3,200,000
VRDNs (Willis-Knighton Medical Center)/(AMBAC INS)/(Mellon
Bank N.A., Pittsburgh LIQ)
TOTAL 14,433,754
MARYLAND--4.3%
18,000,000 Baltimore County, MD IDA, Variable Rate Demand Acquisition 18,000,000
Program (Series 1986) Weekly VRDNs (Baltimore Capital
Acquisition)/(Dai-Ichi Kangyo Bank Ltd., Tokyo LOC)
400,000 Baltimore County, MD Port Facility Monthly VRDNs 400,000
(Occidental Petroleum Corp.)/(Morgan Guaranty Trust Co.,
New York LOC)
910,000 Elkton, MD, Revenue Refunding Bonds (Series 1992) Weekly 910,000
VRDNs (Highway Service Ventures, Inc. Facility)/(First
Union National Bank, Charlotte, NC LOC)
5,660,000 Howard County, MD, (Series 1995) Weekly VRDNs (Bluffs at 5,660,000
Clarys Forest Apartments)/ (First National Bank of
Maryland, Baltimore LOC)
2,000,000 Maryland EDC, Pooled Financing Revenue Bonds, (Series 1995) 2,000,000
Weekly VRDNs (Maryland Municipal Bond Fund)/(Nationsbank,
N.A., Charlotte LOC)
7,000,000 Maryland Health & Higher Educational Facilities Authority, 7,000,000
(Series 1998A) Weekly VRDNs (Charlestown Community)/(First
Union National Bank, Charlotte, NC LOC)
4,970,000 Maryland Health & Higher Educational Facilities Authority, 4,970,000
Pooled Loan Program Revenue Notes, 3.55% CP (John Hopkins
University)/(Nationsbank, N.A. Charlotte LIQ), Mandatory
Tender 2/11/1998
23,400,000 Maryland Health & Higher Educational Facilities Authority, 23,400,000
Revenue Bonds (Series 1985A) Weekly VRDNs (First National
Bank of Chicago LOC)
6,775,000 Maryland State Community Development Administration, 6,775,000
(PA-170) Weekly VRDNs (Merrill Lynch Capital Services, Inc.
LIQ)
27,540,000 (b)Maryland State Community Development Administration,
27,540,000 (Series 1997), PT-123, 3.65% TOBs (Commerzbank
AG, NY LIQ), Optional Tender 12/10/1998
8,500,000 Montgomery County, MD, EDR Weekly VRDNs (U.S. Pharmacopeial 8,500,000
Convention Facility)/ (Chase Manhattan Bank N.A., New York
LOC)
3,755,000 Prince George County, MD, (1997 Issue) Weekly VRDNs (Mona 3,755,000
Branch Avenue Ltd. Partnership)/(First National Bank of
Maryland, Baltimore LOC)
TOTAL 108,910,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
MASSACHUSETTS--2.1%
$ 11,081,779 Clipper Tax Exempt Trust, (Series A) Weekly VRDNs $ 11,081,779
(Massachusetts State Lottery Commission)/(AMBAC INS)/(State
Street Bank and Trust Co. LIQ)
2,100,000 Commonwealth of Massachusetts, (1997 Series B) Weekly VRDNs 2,100,000
(Landesbank Hessen-Thueringen, Frankfurt LIQ)
3,200,000 Danvers, Massachusetts, 4.00% BANs, 3/31/1998 3,200,976
6,500,000 Holden, MA, 4.00% BANs, 10/1/1998 6,512,571
21,495,000 Massachusetts Turnpike Authority, Variable Rate 21,495,000
Certificates (Series 1997N) Weekly VRDNs (MBIA INS)/(Bank
of America NT and SA, San Francisco LIQ)
3,100,000 North Reading, MA, 4.25% BANs, 9/30/1998 3,107,287
6,000,000 Pittsfield, MA, 4.10% BANs, 9/17/1998 6,006,484
TOTAL 53,504,097
MICHIGAN--4.3%
4,700,000 Battle Creek, MI Economic Development Corporation, Limited 4,700,000
Obligation Economic Development Revenue Refunding Bonds
(Series 1992) Weekly VRDNs (Michigan Carton & Paperboard
Company)/(American National Bank, Chicago LOC)
2,500,000 Clarkston Community Schools, MI, PA-175 Weekly VRDNs (MBIA 2,500,000
INS)/(Merrill Lynch Capital Services, Inc. LIQ)
5,300,000 Dearborn, MI Economic Development Corp., (Series 1991) 5,300,000
Weekly VRDNs (Oakbrook Common)/(Mellon Bank N.A.,
Pittsburgh LOC)
5,600,000 Dearborn, MI Economic Development Corp., (Series 1993) 5,600,000
Weekly VRDNs (Oakbrook Common)/(Mellon Bank N.A.,
Pittsburgh LOC)
800,000 Detroit, MI Water Supply System, Water Supply System 800,000
Revenue and Revenue Refunding Bonds (Series 1993) Weekly
VRDNs (FGIC INS)/(FGIC Securities Purchase, Inc. LIQ)
2,000,000 Garden City, MI HFA, Hospital Revenue Bonds (Series 1996A) 2,000,000
Weekly VRDNs (Garden City Hospital, Osteopathic)/(First of
America Bank - Michigan LOC)
2,100,000 Grand Rapids, MI EDR, Floating/Fixed Rate Demand Bonds 2,100,000
(Series 1983-B) Weekly VRDNs (Amway Grand Plaza Hotel
Facilities)/(Old Kent Bank & Trust Co., Grand Rapids LOC)
2,855,000 Kalamazoo, MI Economic Development Corp., 1995 Limited 2,855,000
Obligation Revenue Refunding Bonds Weekly VRDNs (Wyndham
Project, MI)/(First of America Bank - Illinois LOC)
2,100,000 Kent Hospital Finance Authority, MI, (Series 1991A) Weekly 2,100,000
VRDNs (Butterworth Hospital)/ (Rabobank Nederland, Utrecht
LOC)
1,000,000 Michigan Higher Education Facilities Authority, Variable 1,000,000
Rate Demand Limited Obligation Revenue Bonds (Series 1997)
Weekly VRDNs (Davenport College of Business)/(Old Kent Bank
& Trust Co., Grand Rapids LOC)
7,800,000 Michigan State Hospital Finance Authority, (Series 1994) 7,800,000
Weekly VRDNs (Mt. Clemens General Hospital)/(Comerica Bank,
Detroit, MI LOC)
2,200,000 Michigan State Hospital Finance Authority, (Series A) 2,200,000
Weekly VRDNs (First of America Bank - Michigan LOC)
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
MICHIGAN--CONTINUED
$ 2,400,000 Michigan State Hospital Finance Authority, (Series A) $ 2,400,000
Weekly VRDNs (OSF Health Care Systems)
5,300,000 Michigan State Hospital Finance Authority, Hospital 5,300,000
Equipment Loan Program Bonds (Series A) Weekly VRDNs (First
of America Bank - Michigan LOC)
19,650,000 Michigan State Hospital Finance Authority, MERLOTs (Series 19,650,000
1997A) Weekly VRDNs (Detroit Medical Center Obligated
Group)/(AMBAC INS)/(Corestates Bank N.A., Philadelphia, PA
LIQ)
3,900,000 Michigan State Housing Development Authority, (Series 1991) 3,900,000
Weekly VRDNs (Forest Hills Apartments)/(National Australia
Bank, Ltd., Melbourne LOC)
3,000,000 Michigan State Housing Development Authority, (Series 1991) 3,000,000
Weekly VRDNs (Regency Square Apartments)/(National
Australia Bank, Ltd., Melbourne LOC)
15,000,000 Michigan State Housing Development Authority, MERLOTs 15,469,875
(Series G) Weekly VRDNs (MBIA INS)/(Corestates Bank N.A.,
Philadelphia, PA LIQ)
2,000,000 Michigan Strategic Fund, Limited Obligation PCR Bonds 2,000,000
(Series 1993) Weekly VRDNs (Allied-Signal, Inc.)
1,000,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 1,000,000
(Series 1991) Weekly VRDNs (Martin Luther Memorial Home,
Inc.)/(Bank One, Indianapolis, N.A. LOC)
2,800,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 2,800,000
(Series 1995) Weekly VRDNs (Wellness Plan Project)/(NBD
Bank, Michigan LOC)
2,000,000 Michigan Strategic Fund, Variable Rate Demand Limited 2,000,000
Obligation Revenue Bonds (Series 1997B) Weekly VRDNs (NSF
International)/(First of America Bank - Michigan LOC)
9,000,000 Michigan Underground Storage Tank Financial Assurance 9,000,000
Authority, (Series I - 1995), 3.75% CP (Canadian Imperial
Bank of Commerce, Toronto LOC), Mandatory Tender 2/5/1998
2,695,000 Ottawa County, MI Economic Development Corp., Limited 2,695,000
Obligation Revenue Bonds (Series 1995B) Weekly VRDNs
(Sunset Manor, Inc. Project)/(Old Kent Bank & Trust Co.,
Grand Rapids LOC)
TOTAL 108,169,875
MINNESOTA--2.4%
4,300,000 Burnsville, MN, Variable Rate Demand Revenue Bonds (Series 4,300,000
1996) Weekly VRDNs (YMCA Projects)/(Norwest Bank Minnesota,
N.A. LOC)
2,100,000 DDSB Municipal Securities Trusts, Series 1994O Weekly
VRDNs 2,100,000 (Richfield, MN ISD 280)/ (U.S. Bank, N.A.,
Minneapolis LIQ)
6,390,000 DDSB Municipal Securities Trusts, Series 1994T Weekly
VRDNs 6,390,000 (Osseo, MN ISD 279)/ (U.S. Bank, N.A.,
Minneapolis LIQ)
11,000,000 DDSB Municipal Securities Trusts, Series 1994V Weekly VRDNs 11,000,000
(St. Louis Park Healthsystem, MN)/(Norwest Bank Minnesota,
N.A. LIQ)
1,865,000 Dakota County, MN Housing & Redevelopment Authority, 1,865,000
Multifamily Rental Housing Revenue Bonds (Series 1994-B)
Weekly VRDNs (Westwood Ridge Senior Residence Project)/
(U.S. Bank, N.A., Minneapolis LOC)
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
MINNESOTA--CONTINUED
$ 4,250,000 MN Municipal Securities Trust, Series 1996F, Floating Rate $ 4,250,000
Certificates Weekly VRDNs (Lakeville, MN ISD 194)/(Norwest
Bank Minnesota, N.A. LIQ)
500,000 Minneapolis, MN, (Series 1993) Weekly VRDNs (Market Square 500,000
Real Estate, Inc.)/ (Norwest Bank Minnesota, N.A. LOC)
2,400,000 Minneapolis, MN, Variable Rate Housing Revenue Bonds Weekly 2,400,000
VRDNs (One Ten Grant Project)/(U.S. Bank, N.A., Minneapolis
LOC)
16,500,000 Rochester, MN Health Care Facility Authority Weekly VRDNs 16,500,000
(Mayo Foundation)
12,000,000 Rochester, MN Health Care Facility Authority Weekly VRDNs 12,000,000
(Mayo Foundation)
100,000 St. Paul, MN Port Authority, (Series 1991) Weekly VRDNs 100,000
(West Gate Office)/(U.S. Bank, N.A., Minneapolis LOC)
TOTAL 61,405,000
MISSISSIPPI--0.2%
1,540,000 Hinds County, MS, (Series 1991) Weekly VRDNs (North State 1,540,000
St. Project)/(Amsouth Bank N.A., Birmingham LOC)
4,000,000 Perry County, MS, PC Revenue Bonds (Series 1989) Weekly 4,000,000
VRDNs (Leaf River Forest Project)/ (Morgan Guaranty Trust
Co., New York LOC)
TOTAL 5,540,000
MISSOURI--1.0%
6,000,000 Missouri State Environmental Improvement & Energy 6,000,000
Authority, 3.80% CP (Kansas City Power and Light Co.),
Mandatory Tender 5/27/1998
15,000,000 Missouri State HEFA, (Series 1997N), 4.50% TRANs (St. 15,053,135
Louis, MO School District), 9/14/1998
1,000,000 Missouri State HEFA, Series 1995B Weekly VRDNs (SSM Health 1,000,000
Care)/(MBIA INS)/ (Rabobank Nederland, Utrecht LIQ)
4,200,000 Poplar Bluff, MO IDA, (Series 1987) Weekly VRDNs (Gates 4,200,000
Rubber Co.)/(NBD Bank, Michigan LOC)
TOTAL 26,253,135
NEBRASKA--0.1%
3,486,000 Lancaster County, NE Leasing Corp., Refunding Bonds PT-103 3,486,000
(Series 1988) Weekly VRDNs (Bayerische Hypotheken-Und
Wechsel-Bank AG LIQ)
NEVADA--0.8%
19,600,000 Nevada Housing Division, Multi-Unit Housing Revenue 19,600,000
Refunding Bonds (1991 Series A) Weekly VRDNs (Park Vista
Apartments Project)/(Sumitomo Bank Ltd., Osaka LOC)
NEW JERSEY--0.6%
5,000,000 Galloway Township, NJ, (Series 1997), 4.125% BANs, 5,001,929
3/12/1998
4,950,000 Pennsauken Township, NJ, (Series A, 1997), 4.00% BANs, 4,952,388
8/3/1998
5,000,000 West Windsor-Plainsboro, NJ Regional School District, 4.00% 5,000,348
BANs, 2/10/1998
TOTAL 14,954,665
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
NEW YORK--7.6%
$ 19,081,010 Equity Trust II, (1996 Series) Weekly VRDNs (Republic $ 19,081,010
National Bank of New York LOC)
1,430,000 Metropolitan Transportation Authority, New York, Trust 1,430,000
Receipts (Series 1997 FR/RI-9) Weekly VRDNs (FGIC
INS)/(Bank of New York, New York LIQ)
44,500,000 New York City Municipal Water Finance Authority, Trust 44,500,000
Receipts (Series 1997 FR/RI-6) Weekly VRDNs (MBIA
INS)/(Bank of New York, New York LIQ)
30,500,000 New York City, NY, (Series A), 4.50% RANs (Bayerische 30,601,327
Landesbank Girozentrale, Landesbank Hessen-Thueringen,
Frankfurt, Morgan Guaranty Trust Co., New York, National
Westminster Bank, PLC, London, Societe Generale, Paris and
Westdeutsche Landesbank Girozentrale LOCs), 6/30/1998
6,700,000 New York City, NY, Series F-2 Weekly VRDNs 6,700,000
(Toronto-Dominion Bank LOC)
30,000,000 New York City, NY, Trust Receipts (Series 1997) Daily VRDNs 30,000,000
(Bank of New York, New York LIQ)/ (Bayerische Landesbank
Girozentrale, Landesbank Hessen-Thueringen, Frankfurt,
Morgan Guaranty Trust Co., New York, National Westminster
Bank, PLC, London, Societe Generale, Paris and Westdeutsche
Landesbank Girozentrale LOCs)
6,100,000 New York City, NY, Variable Rate Series (F-7) Weekly VRDNs 6,100,000
(Union Bank of Switzerland, Zurich LOC)
2,700,000 New York State Medical Care Facilities Finance Agency, 2,700,000
(Series 1992 B PT-100) Daily VRDNs (FHA INS)/(Credit Suisse
First Boston LIQ)
45,000,000 New York State Power Authority, (Series 2), 3.45% CP (Bank 45,000,000
of Nova Scotia, Toronto, Commerzbank AG, Frankfurt, Credit
Local de France, Landesbank Hessen-Thueringen, Frankfurt,
Morgan Guaranty Trust Co., New York and Toronto-Dominion
Bank LOCs), Mandatory Tender 2/5/1998
5,000,000 Ulster County, NY, Custodial Receipts (2nd Series 1997-A), 5,001,718
4.00% TANs (State Street Bank and Trust Co. LOC), 3/18/1998
TOTAL 191,114,055
NORTH CAROLINA--1.4%
15,000,000 Martin County, NC IFA, (Series 1993) Weekly VRDNs 15,000,000
(Weyerhaeuser Co.)
20,500,000 North Carolina Medical Care Commission Hospital, Revenue 20,500,000
Bonds (Series 1992B) Weekly VRDNs (North Carolina Baptist)
TOTAL 35,500,000
OHIO--4.8%
1,835,000 Akron, Bath & Copley, OH Joint Township Weekly VRDNs 1,835,000
(Visiting Nurses)/(National City Bank, Cleveland, OH LOC)
1,750,000 Clark County, OH, Multifamily Housing Revenue Bonds (Series 1,750,000
1997) Weekly VRDNs (Ohio Masonic Home)/(Huntington National
Bank, Columbus, OH LOC)
10,000,000 Clermont County, OH, Adjustable Rate Hospital Facilities 10,000,000
Revenue Bonds (Series 1996) Weekly VRDNs (Mercy Health
Systems)/(Westdeutsche Landesbank Girozentrale LIQ)
40,700,000 Cuyahoga County, OH Hospital Authority, (Series 1997 D) 40,700,000
Weekly VRDNs (Cleveland Clinic)/ (Bank of America NT and
SA, San Francisco LIQ)
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
OHIO--CONTINUED
$ 4,000,000 Cuyahoga County, OH Hospital Authority, (Series C) Weekly $ 4,000,000
VRDNs (Cleveland Clinic)/(Bank of America NT and SA, San
Francisco LIQ)
2,350,000 Cuyahoga County, OH IDA Weekly VRDNs (H.P. Parking 2,350,000
Co.)/(KeyBank, N.A. LOC)
2,000,000 Franklin County, OH Hospital Facility Authority, (Series 2,000,000
1992) Weekly VRDNs (Wesley Glenn, Inc.)/(Fifth Third Bank,
Cincinnati LOC)
240,000 Lucas County, OH, Hospital Improvement Revenue Weekly VRDNs 240,000
(Sunshine Children's Home)/(National City Bank, Cleveland,
OH LOC)
6,000,000 Lucas County, OH, Hospital Refunding Revenue Bonds Weekly 6,000,000
VRDNs (Riverside Hospital, OH)/ (Huntington National Bank,
Columbus, OH LOC)
6,580,000 Mahoning County, OH, Housing Revenue Bonds (Series 1995) 6,580,000
Weekly VRDNs (Copeland Oaks Project)/(Bank One, Ohio, N.A.
LOC)
770,000 Marion County, OH Hospital Authority, (Series 1991) Weekly 770,000
VRDNs (Marion County, OH Pooled Hospital Program)/(Bank
One, Ohio, N.A. LOC)
3,500,000 Mentor, OH, Adjustable Rate IDRB's (Series 1997) Weekly 3,500,000
VRDNs (Risch Investments/Roll Kraft, Inc.)/(Bank One, Ohio,
N.A. LOC)
11,500,000 Montgomery County, OH Health Facilities Authority, (Series 11,500,000
1995) Weekly VRDNs (Sisters of Charity Health Care
System)/(Toronto-Dominion Bank LIQ)
650,000 Montgomery County, OH IDA Weekly VRDNs (Center-Plex 650,000
Venture)/(KeyBank, N.A. LOC)
2,020,000 Montgomery County, OH, Adjustable Rate Economic Development 2,020,000
Revenue Refunding Bonds (Series 1997) Weekly VRDNs (Cross
Country Inns, Inc.)/(Bank One, Ohio, N.A. LOC)
4,980,000 Montgomery County, OH, Variable Rate Limited Obligation 4,980,000
Revenue Bonds (Series 1996) Weekly VRDNs (Society of
St.Vincent De Paul)/(National City Bank, Dayton, OH LOC)
1,630,000 Montgomery, OH IDA Weekly VRDNs (Bethesda Two Limited 1,630,000
Partnership)/(Huntington National Bank, Columbus, OH LOC)
2,500,000 Ohio State Water Development Authority, Multimodal Water 2,500,000
Development (Series 1993) Weekly VRDNs (Timken
Co.)/(Wachovia Bank of Georgia N.A., Atlanta LOC)
8,000,000 Ohio State Water Development Authority, Pollution Control 8,000,000
Revenue Refunding Bonds (Series 1997) Weekly VRDNs (Philip
Morris Cos., Inc.)
6,900,000 Rickenbacker, OH Port Authority, (Series 1992) Weekly VRDNs 6,900,000
(Rickenbacker Holdings, Inc.)/ (Bank One, Ohio, N.A. LOC)
1,000,000 Twinsburg, OH IDA Weekly VRDNs (Carl J Massara 1,000,000
Project)/(KeyBank, N.A. LOC)
1,915,000 Wayne County, OH, Health Care Facility Revenue Bonds 1,915,000
(Series 1995) Weekly VRDNs (D & M Realty Project)/(Bank
One, Ohio, N.A. LOC)
TOTAL 120,820,000
OKLAHOMA--4.2%
66,500,000 Oklahoma State Industrial Authority, Flexible Rate Hospital 66,500,000
Revenue Bonds (Series 1990B) Weekly VRDNs (Baptist Medical
Center, OK)/(Morgan Guaranty Trust Co., New York LIQ)
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
OKLAHOMA--CONTINUED
$ 27,700,000 Oklahoma State Industrial Authority, Health System Revenue $ 27,700,000
Bonds (Series 1995A) Weekly VRDNs (Baptist Medical Center,
OK)/(Morgan Guaranty Trust Co., New York LIQ)
10,940,000 Tulsa, OK International Airport, Variable Rate Certificates 10,940,000
(Series 1997B-2) Weekly VRDNs (MBIA INS)/(Bank of America
NT and SA, San Francisco LIQ)
TOTAL 105,140,000
OREGON--0.5%
2,000,000 Oregon Health, Housing & Cultural Facilities Authority, 2,000,000
Revenue Bonds (1995 Series A) Weekly VRDNs (Guide Dogs for
the Blind, Inc. Project)/(Banque Nationale de Paris LOC)
4,950,000 Oregon Health, Housing & Cultural Facilities Authority, 4,950,000
Variable Rate Health Facilities Revenue Bonds (1995 Series
A) Weekly VRDNs (Evangelical Lutheran Good Samaritan
Society)/ (U.S. Bank, N.A., Minneapolis LOC)
5,000,000 Portland Community College District, OR, (Series 1997), 5,006,715
4.25% TRANs, 6/30/1998
TOTAL 11,956,715
PENNSYLVANIA--7.6%
4,560,000 Allegheny County, PA IDA, Commercial Development Revenue 4,560,000
Bonds (Series 1992) Weekly VRDNs (Eleven Parkway Center
Associates)/(Mellon Bank N.A., Pittsburgh LOC)
3,040,000 Allegheny County, PA IDA, Variable Rate Demand Revenue 3,040,000
Bonds (Series A of 1997) Weekly VRDNs (Jewish Community
Center)/(National City, Pennsylvania LOC)
5,000,000 Allegheny County, PA IDA, Variable Rate Demand Revenue 5,000,000
Bonds (Series B of 1997) Weekly VRDNs (Jewish Community
Center)/(National City, Pennsylvania LOC)
5,000,000 Allegheny County, PA Port Authority, (Series A of 1997, 5,000,000
3.85% GANs (PNC Bank, N.A. LOC), 6/30/1998
4,250,000 Beaver County, PA IDA, PCR Refunding Bonds (1992 Series-E), 4,250,000
3.80% CP (Toledo Edison Co.)/ (Toronto-Dominion Bank LOC),
Mandatory Tender 12/1/1998
5,100,000 Beaver County, PA IDA, PCR Refunding Bonds (1994 Series), 5,100,000
3.63% CP (Duquesne Light Power Co.)/(Swiss Bank Corp.,
Basle LOC), Mandatory Tender 6/9/1998
3,000,000 Clinton County, PA, IDA Weekly VRDNs (Armstrong World 3,000,000
Industries, Inc.)/(Mellon Bank N.A., Pittsburgh LOC)
29,595,000 Dauphin County, PA General Authority, (Education and Health 29,595,000
Loan Program, Series 1997) Weekly VRDNs (AMBAC INS)/(Chase
Manhattan Bank N.A., New York LIQ)
5,000,000 Dauphin County, PA General Authority, (Series A of 1997) 5,000,000
Weekly VRDNs (Allhealth Pooled Financing Program)/(FSA
INS)/(Credit Suisse First Boston LIQ)
4,900,000 Delaware County Authority, PA, Hospital Revenue Bonds 4,900,000
(Series of 1996) Weekly VRDNs (Crozer-Chester Medical
Center)/(Kredietbank N.V., Brussels LOC)
3,000,000 Doylestown Hospital Authority, PA, Doylestown Hospital 3,000,000
Revenue Bonds Weekly VRDNs (AMBAC INS)/(PNC Bank, N.A. LIQ)
3,000,000 Easton Area School District, PA, (Series 1997) Weekly VRDNs 3,000,000
(FGIC INS)/(FGIC Securities Purchase, Inc. LIQ)
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
PENNSYLVANIA--CONTINUED
$ 31,500,000 Erie County, PA Hospital Authority Weekly VRDNs (St. $ 31,500,000
Vincent Health System)/(Mellon Bank N.A., Pittsburgh LOC)
10,940,000 Lancaster County, PA Hospital Authority, Health Center 10,940,000
Revenue Bonds (Series 1996) Weekly VRDNs (Masonic
Homes)/(First Union National Bank, Charlotte, NC LIQ)
14,205,000 Lancaster, PA Higher Education Authority, (Series 1997) 14,205,000
Weekly VRDNs (Franklin and Marshall College Project)/(Chase
Manhattan Bank N.A., New York LIQ)
4,565,000 Lehigh County, PA General Purpose Authority, Revenue Bonds 4,565,000
(Series 1990) Weekly VRDNs (Phoebe Terrace,
Inc.)/(Corestates Bank N.A., Philadelphia, PA LOC)
6,600,000 Montgomery County, PA IDA, Commercial Development Revenue 6,600,000
Bonds (Series 1992) Weekly VRDNs (Hickory Pointe
Project)/(First Union National Bank, North LOC)
4,900,000 North Lebanon Township, PA, Municipal Authority Mortgage 4,900,000
Bonds Weekly VRDNs (Grace Community, Inc.)/(Corestates Bank
N.A., Philadelphia, PA LOC)
2,500,000 Northampton County, PA Higher Education Authority, PA-176 2,500,000
Weekly VRDNs (MBIA INS)/ (Merrill Lynch Capital Services,
Inc. LIQ)
19,670,000 Pennsylvania Housing Finance Authority, PT-119A (Series 19,670,000
1997-56C) Weekly VRDNs (Credit Suisse First Boston LIQ)
2,000,000 Pennsylvania State Higher Education Facilities Authority, 2,009,042
(Series B1), 4.50% TOBs (Allentown College of St. Francis
de Sales)/(PNC Bank, N.A. LOC), Mandatory Tender 11/1/1998
3,000,000 Pennsylvania State Higher Education Facilities Authority, 3,013,563
(Series B2), 4.50% TOBs (Carlow College)/(PNC Bank, N.A.
LOC), Optional Tender 11/1/1998
3,245,000 (b)Pennsylvania State University, PT-157 (Series 1992), 3,245,000
3.75% TOBs (Rabobank Nederland, Utrecht LIQ), Optional
Tender 1/14/1999
1,600,000 Philadelphia Redevelopment Authority, Multifamily Revenue 1,600,000
Bonds (Series 1985) Weekly VRDNs (Franklin Town
Towers)/(Marine Midland Bank N.A., Buffalo, NY LOC)
7,075,000 Philadelphia, PA IDA, (Series 93) Weekly VRDNs (Sackett 7,075,000
Development)/(Mellon Bank N.A., Pittsburgh LOC)
2,200,000 Sayre, PA, Health Care Facilities Authority, VHA PA Capital 2,200,000
Financing Program (Series A) Weekly VRDNs (VHA of
Pennsylvania)/(AMBAC INS)/(Mellon Bank N.A., Pittsburgh
LIQ)
1,900,000 Washington County, PA Hospital Authority Weekly VRDNs 1,900,000
(Keystone Diversified Management Corp.)/(Mellon Bank N.A.,
Pittsburgh LOC)
TOTAL 191,367,605
RHODE ISLAND--0.3%
6,300,000 East Providence, RI, 4.10% TANs, 7/7/1998 6,310,623
TENNESSEE--4.2%
9,000,000 Chattanooga, TN HEFA Weekly VRDNs (Mccallie 9,000,000
School)/(SunTrust Bank, Atlanta LOC)
8,200,000 Chattanooga, TN HEFA Weekly VRDNs (Sisken 8,200,000
Hospital)/(Sumitomo Bank Ltd., Osaka LOC)
13,800,000 Chattanooga, TN HEFA Weekly VRDNs (Sisken 13,800,000
Hospital)/(Sumitomo Bank Ltd., Osaka LOC)
1,800,000 Jackson County, TN IDB, (Series B) Daily VRDNs (Esselte 1,800,000
AB)/(Bank of America Illinois LOC)
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
TENNESSEE--CONTINUED
$ 3,715,000 Maury County, TN HEFA, (Series 1996E) Weekly VRDNs $ 3,715,000
(Southern Healthcare Systems, Inc.)/ (Bank One, Texas N.A.
LOC)
5,775,000 Memphis, TN Center City Revenue Finance Corp., (Series 5,775,000
1996A) Weekly VRDNs (South Bluffs)/ (National Bank of
Commerce, Memphis, TN LOC)
2,700,000 Memphis, TN, General Improvement Refunding Bonds, (Series 2,700,000
1995A) Weekly VRDNs (Westdeutsche Landesbank Girozentrale
LOC)
1,000,000 Memphis, TN, General Improvement Refunding Bonds, (Series 1,000,000
1995A) Weekly VRDNs (Westdeutsche Landesbank Girozentrale
LOC)
4,080,000 Metropolitan Government Nashville & Davidson County, TN 4,080,000
HEFA, Educational Facilities Revenue Bonds (Series 1997)
Weekly VRDNs (Belmont University Project)/(SunTrust Bank,
Nashville LOC)
34,300,000 Metropolitan Government Nashville & Davidson County, TN 34,300,000
HEFA, Hospital Revenue Bonds, (Series 1992), 3.75% CP
(Baptist Hospital, Inc. (TN))/(Nationsbank, N.A., Charlotte
LOC), Mandatory Tender 4/27/1998
4,700,000 Roane, TN IDB, (Series 1982) Monthly VRDNs (Fortafil 4,700,000
Fibers, Inc. Project)/(ABN AMRO Bank N.V., Amsterdam LOC)
10,000,000 Sevier County, TN Public Building Authority, Local 10,000,000
Government Public Improvement Bonds, (Series II-G-1) Weekly
VRDNs (AMBAC INS)/(Kredietbank N.V., Brussels LIQ)
3,500,000 Sevier County, TN Public Building Authority, Local 3,500,000
Government Public Improvement Bonds, (Series II-G-3) Weekly
VRDNs (AMBAC INS)/(Kredietbank N.V., Brussels LIQ)
2,000,000 Washington County, TN IDB, Revenue Refunding Bonds (Series 2,000,000
1996) Weekly VRDNs (Springbrook Properties
Project)/(SunTrust Bank, Nashville LOC)
TOTAL 104,570,000
TEXAS--8.4%
16,800,000 Austin, TX Utilities System, (Series 1997) PT-127 Weekly 16,800,000
VRDNs (FSA INS)/(Merrill Lynch Capital Services, Inc. LIQ)
10,300,000 Board of Regents of The University of Texas, (Series A), 10,300,000
3.80% CP, Mandatory Tender 2/26/1998
3,660,000 Dallas, TX, (Series C), 3.95% TOBs, Optional Tender 3,660,000
6/15/1998
400,000 Grapevine, TX, IDC, SimuFlite Training International 400,000
Project (Series 1993) Weekly VRDNs (Southern Air Transport,
Inc.)/(Bank of Montreal LOC)
5,500,000 Harris County, TX, Toll Road Unlimited Tax and Sub Lien 5,500,000
Revenue (Series 1994-H) Weekly VRDNs (Morgan Guaranty Trust
Co., New York LIQ)
1,620,000 North Richland Hills, TX IDC Weekly VRDNs (Tecnol, 1,620,000
Inc.)/(Nationsbank, N.A., Charlotte LOC)
40,000,000 Plano ISD, TX, Variable Rate Unlimited Tax School Building 40,000,142
Bonds, (Series 1997), 3.86% TOBs (Texas Permanent School
Fund Guarantee Program GTD)/(Union Bank of Switzerland,
Zurich LIQ), Mandatory Tender 2/5/1998
3,875,000 Sabine River, TX IDA, (Pooled Series 1984Q), 3.65% TOBs 3,872,171
(Northeast TX Electric Cooperative, Inc.)/(National Rural
Utilities Cooperative Finance Corp. GTD), Optional Tender
2/15/1998
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
TEXAS--CONTINUED
$ 12,200,000 San Antonio, TX, Waste System (Series 1995), 3.80% CP $ 12,200,000
(Westdeutsche Landesbank Girozentrale LIQ), Mandatory
Tender 2/26/1998
6,480,000 TX Pooled Tax Exempt Trust, Certificates of Participation 6,480,000
(Series 1996) Weekly VRDNs (Bank One, Texas N.A. LOC)
19,300,000 Texas State Public Finance Authority, (Series 1993A), 3.65% 19,300,000
CP (Texas State), Mandatory Tender 2/11/1998
16,800,000 Texas State Public Finance Authority, (Series 1993A), 3.65% 16,800,000
CP (Texas State), Mandatory Tender 6/8/1998
73,500,000 Texas State, (Series A), 4.75% TRANs, 8/31/1998 73,906,746
TOTAL 210,839,059
VERMONT--0.0%
1,000,000 Vermont Educational and Health Buildings Financing Agency, 1,000,000
(Series 1995A) Weekly VRDNs (KeyBank, N.A. LOC)
VIRGINIA--0.6%
5,000,000 Roanoke, VA IDA, Series B Weekly VRDNs (Carillion Health 5,000,000
System)/(Morgan Guaranty Trust Co., New York LIQ)
9,600,000 York County, VA IDA, (Series 1985), 3.85% CP (Virginia 9,600,000
Electric Power Co.), Mandatory Tender 4/6/1998
TOTAL 14,600,000
WASHINGTON--0.5%
2,200,000 Port of Seattle, WA, IDR Bonds (Series 1985) Weekly VRDNs 2,200,000
(Douglas Management Co. Project)/(Mellon Bank N.A.,
Pittsburgh LOC)
8,400,000 State of Washington, (Series VR-96B) Weekly VRDNs 8,400,000
(Landesbank Hessen-Thueringen, Frankfurt LIQ)
2,000,000 Washington State Housing Finance Commission, (1997 Series 2,000,000
5N-S), 3.85% TOBs, Mandatory Tender 12/15/1998
TOTAL 12,600,000
WEST VIRGINIA--0.7%
15,430,000 Cabell County Commission, WV, Life Care Facilities 15,430,000
Multi-Option Revenue Bonds (Series 1995) Weekly VRDNs
(Foster Foundation)/(Huntington National Bank, Columbus, OH
LOC)
3,000,000 Marshall County, WV, PCR (Series 1992) Weekly VRDNs (PPG 3,000,000
Industries, Inc.)
TOTAL 18,430,000
WISCONSIN--2.1%
3,250,000 Hancock, WI, Industrial Development Revenue Refunding Bonds 3,250,000
(Series 1996) Weekly VRDNs (Ore-Ida Foods, Inc.)/(Heinz
(H.J.) Co. GTD)
5,175,000 Kettle Moraine, WI School District, 4.10% TRANs, 8/31/1998 5,179,612
3,200,000 Lodi, WI School District, 4.40% BANs, 4/15/1998 3,200,000
</TABLE>
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(A) SHORT-TERM MUNICIPALS--CONTINUED
WISCONSIN--CONTINUED
$ 6,700,000 Menomonee Falls, WI School District, 4.10% TRANs, 8/28/1998 $ 6,705,499
7,900,000 New Berlin, WI, 4.10% TRANs, 8/27/1998 7,909,543
3,750,000 Verona, WI Area School District, 3.95% TRANs, 8/26/1998 3,750,400
21,590,000 Wisconsin Health and Educational Facilities Authority, 21,590,000
MERLOTs (Series 1997 B) Weekly VRDNs (Sinai Samaritan
Medical Center, Inc.)/(MBIA INS)/(Corestates Bank N.A.,
Philadelphia, PA LIQ)
TOTAL 51,585,054
WYOMING--0.1%
1,125,000 Natrona County, WY, Hospital Revenue, 5.525% TOBs (Grainger 1,125,000
(W.W.), Inc.), Optional Tender 6/1/1998
TOTAL INVESTMENTS (AT AMORTIZED COST)(C) $ 2,524,025,703
</TABLE>
(a) The Fund may only invest in securities rated in one of the two highest
short-term rating categories by nationally recognized statistical rating
organizations ("NRSROs") or unrated securities of comparable quality. An
NRSRO's two highest rating categories are determined without regard for
sub-categories and gradations. For example, securities rated SP-1+, SP-1, or
SP-2 by Standard & Poor's, MIG-1, or MIG-2 by Moody's Investors Service,
Inc., F-1+, F-1, and F-2 by Fitch IBCA, Inc. are all considered rated in one
of the two highest short-term rating categories. Securities rated in the
highest short-term rating category (and unrated securities of comparable
quality) are identified as First Tier securities. Securities rated in the
second highest short-term rating category (and unrated securities of
comparable quality) are identified as Second Tier securities. The Fund
follows applicable regulations in determining whether a security is rated
and whether a security rated by multiple NRSROs in different rating
categories should be identified as a First or Second Tier security. At
January 31, 1998, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
FIRST TIER SECOND TIER
100.00% 0.00%
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At January 31, 1998, these securities
amounted to $36,785,000 which represents 1.5% of net assets.
(c) Cost for federal tax purposes $2,524,025,703.
Note: The categories of investments are shown as a percentage of net assets
($2,515,090,079) at January 31, 1998.
The following acronyms are used throughout this portfolio: ACES --Adjustable
Convertible Extendable Securities AMBAC --American Municipal Bond Assurance
Corporation BANs --Bond Anticipation Notes CP --Commercial Paper EDC --Economic
Development Commission EDR --Economic Development Revenue FGIC --Financial
Guaranty Insurance Company FHA --Federal Housing Administration FSA --Financial
Security Assurance GANs --Grant Anticipation Notes GO --General Obligation GTD
- --Guaranty HEFA --Health and Education Facilities Authority HFA --Housing
Finance Authority IDA --Industrial Development Authority IDB --Industrial
Development Bond IDC --Industrial Development Corporation IDR --Industrial
Development Revenue IDRB --Industrial Development Revenue Bond IFA --Industrial
Finance Authority INS --Insured ISD --Independent School District LIQ
- --Liquidity Agreement LOCs --Letter(s) of Credit LOC --Letter of Credit MBIA
- --Municipal Bond Investors Assurance MERLOTs --Municipal Exempt
Receipts--Liquidity Optional Tender Series PCR --Pollution Control Revenue PC
- --Participation Certificate PCFA --Pollution Control Finance Authority PFA
- --Public Facility Authority PLC --Public Limited Company RANs --Revenue
Anticipation Notes TANs --Tax Anticipation Notes TOBs --Tender Option Bonds
TRANs --Tax and Revenue Anticipation Notes VHA --Veterans Housing Administration
VR --Variable Rate VRDB --Variable Rate Demand Bond VRDNs --Variable Rate Demand
Notes
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
TAX-FREE OBLIGATIONS FUND
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at amortized cost and value $ 2,524,025,703
Cash 26,717,164
Income receivable 19,935,540
Total assets 2,570,678,407
LIABILITIES:
Payable for investments purchased $ 48,282,564
Income distribution payable 7,034,574
Accrued expenses 271,190
Total liabilities 55,588,328
Net Assets for 2,515,102,428 shares outstanding $ 2,515,090,079
NET ASSETS CONSIST OF:
Paid in capital $ 2,515,102,428
Accumulated net realized loss on investments (12,349)
Total Net Assets $ 2,515,090,079
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER
SHARE:
INSTITUTIONAL SHARES:
$1,747,001,571 / 1,747,020,824 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$768,088,508 / 768,081,604 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
TAX-FREE OBLIGATIONS FUND
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 43,789,302
EXPENSES:
Investment advisory fee $ 2,354,195
Administrative personnel and services fee 888,285
Custodian fees 76,511
Transfer and dividend disbursing agent fees and 39,842
expenses
Directors'/Trustees' fees 9,384
Auditing fees 7,544
Legal fees 8,096
Portfolio accounting fees 108,293
Shareholder services fee--Institutional Shares 2,136,012
Shareholder services fee--Institutional Service 806,732
Shares
Share registration costs 33,672
Printing and postage 12,512
Insurance premiums 9,384
Taxes 2,024
Miscellaneous 10,120
Total expenses 6,502,606
Waivers--
Waiver of investment advisory fee $ (1,153,875)
Waiver of shareholder services fee--Institutional (2,136,012)
Shares
Total waivers (3,289,887)
Net expenses 3,212,719
Net investment income 40,576,583
Net realized gain on investments 85,706
Change in net assets resulting from operations $ 40,662,289
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
TAX-FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
JANUARY 31, 1998 JULY 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 40,576,583 $ 72,319,761
Net realized gain (loss) on investments ($85,706 net gain 85,706 (9,927)
and $107,581 net loss, respectively, as computed for
federal tax purposes)
Change in net assets resulting from operations 40,662,289 72,309,834
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Shares (29,990,754) (56,940,629)
Institutional Service Shares (10,585,829) (15,379,132)
Change in net assets resulting from distributions to (40,576,583) (72,319,761)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 7,058,689,239 12,978,635,504
Net asset value of shares issued to shareholders in 5,058,140 9,465,909
payment of distributions declared
Cost of shares redeemed (6,610,906,012) (12,847,315,602)
Change in net assets resulting from share transactions 452,841,367 140,785,811
Change in net assets 452,927,073 140,775,884
NET ASSETS:
Beginning of period 2,062,163,006 1,921,387,122
End of period (including undistributed net investment $ 2,515,090,079 $ 2,062,163,006
income of $0 and $24,515, respectively)
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.04 0.02 0.03
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.04) (0.02) (0.03)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 1.78% 3.49% 3.55% 3.64% 2.45% 2.54%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.20%* 0.20% 0.20% 0.20% 0.20% 0.20%
Net investment income 3.51%* 3.43% 3.46% 3.62% 2.41% 2.49%
Expense waiver/ reimbursement(b) 0.35%* 0.35% 0.36% 0.39% 0.15% 0.14%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $1,747,002 $1,474,180 $1,514,979 $1,295,458 $789,755 $454,119
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
1998 1997 1996 1995 1994(A)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.03 0.03 0.03 0.002
LESS DISTRIBUTIONS
Distributions from net investment income (0.02) (0.03) (0.03) (0.03) (0.002)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 1.66% 3.24% 3.29% 3.39% 0.18%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.45%* 0.45% 0.45% 0.45% 0.39%*
Net investment income 3.28%* 3.19% 3.22% 3.48% 3.04%*
Expense waiver/reimbursement(c) 0.10%* 0.10% 0.11% 0.14% 0.15%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $768,089 $587,983 $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)
NOTES TO FINANCIAL STATEMENTS
TAX-FREE OBLIGATIONS FUND
JANUARY 31, 1998 (UNAUDITED)
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"). 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 dividend income exempt from federal regular
income tax consistent with the stability of principal.
The Fund offers two classes of shares: Institutional Shares and
Institutional Service Shares.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS
The Fund's use of the amortized cost method to value its portfolio securities is
in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES, AND DISTRIBUTIONS
Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL TAXES
It is the Fund's policy to comply with the provisions of the Code applicable to
regulated investment companies and to distribute to shareholders each year
substantially all of its income. Accordingly, no provisions for federal tax are
necessary.
At July 31, 1997, the Fund, for federal tax purposes, had a capital loss
carryforward of $163,650, 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
2005 107,581
Additionally, net capital losses of $16,488 attributable to security
transactions incurred after October 31, 1996, are treated as arising on 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.
RESTRICTED SECURITIES
Restricted securities are securities that may only be resold upon restoration
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 upon exercise or a demand feature. Such restricted
securities may be determined to be liquid under criteria established by the
Board of Trustees. The Fund will not incur any registration costs upon such
resales. Restricted securities are valued at amortized cost in accordance with
Rule 2a-7 under the Investment Company Act of 1940.
Additional information on the restricted securities held at January 31, 1998 are
as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Illinois Development Finance Authority, PT-131 10/2/1997 $ 6,000,000
(Series 1995A)
Maryland State Community Development 8/27/1997 27,540,000
Administration, (Series 1997), PT-123
Pennsylvania State University, PT-157 (Series 1/29/1998 3,245,000
1992)
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses, and revenues reported in
the financial statements. Actual results could differ from those estimated.
OTHER
Investment transactions are accounted for on the trade date.
SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At January 31, 1998, capital paid-in aggregated $2,515,102,428.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Six Months
(Unaudited)
Ended Year Ended
Institutional Shares January 31, 1998 July 31, 1997
Shares sold 5,579,516,184 11,143,842,232
<S> <C> <C>
Shares issued to shareholders in payment of distributions 3,234,351 7,389,962
declared
Shares redeemed (5,309,985,871) (11,192,024,289)
Net change resulting from Institutional Share transactions 272,764,664 (40,792,095)
<CAPTION>
Six Months
(Unaudited)
Ended Year Ended
Institutional Service Shares January 31, 1998 July 31, 1997
<S> <C> <C>
Shares sold 1,479,173,055 1,834,793,272
Shares issued to shareholders in payment of distributions 1,823,789 2,075,947
declared
Shares redeemed (1,300,920,141) (1,655,291,313)
Net change resulting from Institutional Service Share 180,076,703 181,577,906
transactions
Net change resulting from share transactions 452,841,367 140,785,811
</TABLE>
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE
Federated Management, the Fund's investment adviser (the "Adviser"), receives
for its services an annual investment advisory fee equal to 0.20% 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.
INTERFUND TRANSACTIONS
During the period ended January 31, 1998, the Fund engaged in purchase and sale
transactions with funds that have a common investment adviser (or affiliated
investment advisers), common Directors/Trustees, and/or common Officers. These
purchase and sale transactions were made at current market value pursuant to
Rule 17a-7 under the Act amounting to $2,298,830,000 and $2,182,048,437,
respectively.
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
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
Anthony R. Bosch
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves risk, including possible
loss of principal. Although money market funds seek to maintain a stable net
asset value of $1.00 per share, there is no assurance that they will be able to
do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses, and other information.
NOTES
[Graphic]
Tax-Free Obligations Fund
SEMI-ANNUAL REPORT TO SHAREHOLDERS JANUARY 31, 1998
Federated Securities Corp., Distributor
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 60934N401
Cusip 60934N880
0022807 (3/98)
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Treasury
Obligations Fund, a portfolio of Money Market Obligations Trust. This report
covers the first half of the fund's fiscal year, which is the six-month period
ended January 31, 1998. It begins with an investment review of the short-term
Treasury market from the fund's portfolio manager. Following the investment
review are the fund's portfolio of investments and financial statements.
Over the six-month reporting period, dividends paid to shareholders of the
fund's Institutional Shares, Institutional Service Shares, and Institutional
Capital Shares, each totaled $0.03 per share. At the end of the reporting
period, net assets topped the $10 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, 1998
* Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or guaranteed by the U.S. government.
INVESTMENT REVIEW
Treasury Obligations Fund, which is rated AAAm* by Standard & Poor's ("S&P") and
Aaa* by Moody's Investors Service, Inc., ("Moody's") 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- to 45-day average maturity range, a neutral stance for the fund.
Over the six-month period ended January 31, 1998, the Federal Reserve Board (the
"Fed") stood pat in the face of economic growth that continued to exceed the
2.5% pace thought to be the non-inflationary potential. The federal funds target
remained at 5.5%, where it has been since the Fed tightened monetary policy in
March 1997. With gross domestic product ("GDP") growth at 3.1% over the third
quarter of 1997, expectation was built for the need for an additional tightening
from the Fed as added insurance against inflation. However, dramatic declines in
the Asian equity markets curtailed this expectation, and overseas developments
dominated the rest of the fourth quarter of 1997. Although GDP growth expanded
at close to 4.0% over this period, the Fed kept monetary policy unchanged.
Aside from economic fundamentals, movements in short-term interest rates on
Treasury securities were driven by other factors as well over the reporting
period. The yield on the three-month Treasury bill, for example, began the
period at 5.2% and traded down to 4.9% by late September in response to
quarter-end window-dressing and a reduction in the overall supply of Treasury
bills. It rose briefly to 5.1% in early October, but was driven downward to
below 5.0% again as the alarming declines in the overseas markets resulted in a
flight-to-quality to Treasuries. The yield rose to 5.2% by early November as the
immediate crisis subsided, and then climbed steadily to 5.4% as overseas
investors--primarily Japanese--sold their Treasury holdings to help meet
liquidity needs back home. Early in January 1998, the pendulum swung back again,
as growing speculation that the impact on the domestic economy from the troubles
in Asia might be so great that the Fed might actually have to ease monetary
policy gripped the market. The yield on the three-month Treasury bill fell again
to 5% as a result. These fears receded somewhat by mid-month, and the yield rose
to close the reporting period at 5.2%. Movements in longer-term securities in
the money market universe (i.e., those between six months and one year) were
slightly less affected by the technical supply and flight-to-quality influences,
but traded overall along with the shorter security and maintained a healthy bid.
The fund was targeted in a 35- to 45-day average maturity range over the
reporting period, essentially a neutral stance for the portfolio. Once an
average maturity range was established, the fund maximized 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 12-month maturities. This
portfolio structure continued to provide a competitive yield.
The risks to the Fed at this juncture appear to be balanced, with the threat of
higher inflation stemming from tight labor markets being potentially offset by
the as-yet-unknown impact of the Asian "flu." The Fed should be content to "wait
and see" until the effects on the domestic economy are better understood - which
should become more clear over the second quarter of 1998. We would expect to
maintain our current neutral positioning over this period. 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 S&P evaluates a number of factors, including
credit quality, market price exposure, and management. S&P monitors the
portfolio weekly for developments that could cause changes in the ratings.
Money market funds and bond funds rated Aaa by Moody's are judged to be of an
investment quality similar to Aaa-rated fixed-income obligations, that is,
they are judged to be of the best quality. These ratings do not remove market
risks and are subject to change.
PORTFOLIO OF INVESTMENTS
TREASURY OBLIGATIONS FUND
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM U.S. TREASURY OBLIGATIONS--15.5%
$ 53,000,000 (a)U.S. Treasury Bills--0.5% 5.630% - 5.960%, 5/28/1998 $ 51,953,110
- 6/25/1998
1,497,000,000 U.S. Treasury Notes--15.0% 4.750% - 9.250%, 4/15/1998 - 1,497,996,795
11/30/1998
Total Short-Term U.S. Treasury Obligations 1,549,949,905
(B)REPURCHASE AGREEMENTS--84.6%
327,000,000 ABN AMRO Chicago Corp., 5.620%, dated 1/30/1998, due 327,000,000
2/2/1998
252,000,000 Aubrey G. Lanston and Company, Inc., 5.600%, dated 252,000,000
1/30/1998, due 2/2/1998
50,000,000 BA Securities, Inc., 5.600%, dated 1/30/1998, due 50,000,000
2/2/1998
400,000,000 BT Securities Corp., 5.610%, dated 1/30/1998, due 400,000,000
2/2/1998
227,000,000 Bank of Tokyo-Mitsubishi Ltd., 5.620%, dated 1/30/1998, 227,000,000
due 2/2/1998
224,000,000 Barclays de Zoete Wedd Securities, Inc., 5.600%, dated 224,000,000
1/30/1998, due 2/2/1998
257,000,000 CIBC Wood Gundy Securities Corp., 5.600%, dated 257,000,000
1/30/1998, due 2/2/1998
100,000,000 CIBC Wood Gundy Securities Corp., 5.610%, dated 100,000,000
1/30/1998, due 2/2/1998
400,000,000 Deutsche Bank Government Securities, Inc., 5.600%, 400,000,000
dated 1/30/1998, due 2/2/1998
452,000,000 Donaldson, Lufkin and Jenrette Securities Corp., 452,000,000
5.600%, dated 1/30/1998, due 2/2/1998
192,000,000 First Chicago Capital Markets, Inc., 5.600%, dated 192,000,000
1/30/1998, due 2/2/1998
402,000,000 First Union Capital Markets, 5.600%, dated 1/30/1998, 402,000,000
due 2/2/1998
696,660,000 Goldman Sachs Group, LP, 5.600%, dated 1/30/1998, due 696,660,000
2/2/1998
455,000,000 Greenwich Capital Markets, Inc., 5.600%, dated 455,000,000
1/30/1998, due 2/2/1998
380,000,000 Harris Government Security, Inc., 5.620%, dated 380,000,000
1/30/1998, due 2/2/1998
420,000,000 Salomon Smith Barney Holdings, Inc., 5.610%, dated 420,000,000
1/30/1998, due 2/2/1998
400,000,000 Societe Generale Securities Corp., 5.600%, dated 400,000,000
1/30/1998, due 2/2/1998
40,000,000 Societe Generale, New York, 5.600%, dated 1/30/1998, 40,000,000
due 2/2/1998
90,000,000 State Street Bank and Trust Co., 5.600%, dated 90,000,000
1/30/1998, due 2/2/1998
500,000,000 Swiss Bank Capital Markets, 5.600%, dated 1/30/1998, 500,000,000
due 2/2/1998
355,905,000 Swiss Bank Capital Markets, 5.610%, dated 1/30/1998, 355,905,000
due 2/2/1998
225,000,000 UBS Securities, Inc., 5.590%, dated 1/30/1998, due 225,000,000
2/2/1998
330,000,000 UBS Securities, Inc., 5.620%, dated 1/30/1998, due 330,000,000
2/2/1998
252,000,000 Westdeutsche Landesbank Girozentrale, 5.600%, dated 252,000,000
1/30/1998, due 2/2/1998
208,000,000 (c)Goldman Sachs Group, LP, 5.440%, dated 1/30/1998, 208,000,000
due 4/30/1998
150,000,000 (c)Goldman Sachs Group, LP, 5.480%, dated 1/6/1998, due 150,000,000
2/5/1998
220,000,000 (c)Goldman Sachs Group, LP, 5.660%, dated 12/2/1997, 220,000,000
due 2/2/1998
</TABLE>
TREASURY OBLIGATIONS FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
(B)REPURCHASE AGREEMENTS--CONTINUED
$ 196,000,000 (c)J.P. Morgan & Co., Inc., 5.480%, dated 1/7/1998, due $ 196,000,000
2/6/1998
113,000,000 (c)Merrill Lynch, Pierce, Fenner and Smith, 5.450%, 113,000,000
dated 1/13/1998, due 2/12/1998
149,000,000 (c)Morgan Stanley Group, Inc., 5.480%, dated 1/6/1998, 149,000,000
due 2/5/1998
Total Repurchase Agreements 8,463,565,000
Total Investments (at amortized cost)(d) $ 10,013,514,905
</TABLE>
(a) The issue shows the rate of discount at time of purchase.
(b) The repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated funds.
(c) Although final maturity falls beyond seven days, a liquidity feature is
included in 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
($10,005,969,348) at January 31, 1998.
The following acronym is used throughout this portfolio:
LP --Limited Partnership
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
TREASURY OBLIGATIONS FUND
JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Investments in repurchase agreements $ 8,463,565,000
Investments in securities 1,549,949,905
Total investments in securities, at amortized cost and value $ 10,013,514,905
Cash 3,414,296
Income receivable 36,527,915
Total assets 10,053,457,116
LIABILITIES:
Income distribution payable 46,079,472
Accrued expenses 1,408,296
Total liabilities 47,487,768
Net Assets for 10,005,969,348 shares outstanding $ 10,005,969,348
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER
SHARE:
INSTITUTIONAL SHARES:
$5,283,813,846 / 5,283,813,846 shares outstanding $1.00
INSTITUTIONAL SERVICE SHARES:
$4,659,783,381 / 4,659,783,381 shares outstanding $1.00
INSTITUTIONAL CAPITAL SHARES:
$62,372,121 / 62,372,121 shares outstanding $1.00
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
TREASURY OBLIGATIONS FUND
SIX MONTHS ENDED JANUARY 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 261,773,310
EXPENSES:
Investment advisory fee $ 9,295,372
Administrative personnel and services fee 3,507,268
Custodian fees 242,584
Transfer and dividend disbursing agent fees and 114,716
expenses
Directors'/Trustees' fees 32,752
Auditing fees 7,084
Legal fees 11,592
Portfolio accounting fees 327,662
Shareholder services fee--Institutional Shares 6,657,723
Shareholder services fee--Institutional Service 4,904,023
Shares
Shareholder services fee--Institutional Capital 57,470
Shares
Share registration costs 407,000
Printing and postage 13,616
Insurance premiums 25,760
Taxes 41,400
Miscellaneous 16,191
Total expenses 25,662,213
Waivers--
Waiver of investment advisory fee $ (4,543,128)
Waiver of shareholder services fee--Institutional (6,657,723)
Shares
Waiver of shareholder services fee--Institutional (34,482)
Capital Shares
Total waivers (11,235,333)
Net expenses 14,426,880
Net investment income $ 247,346,430
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
TREASURY OBLIGATIONS FUND
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
JANUARY 31, 1998 JULY 31, 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 247,346,430 $ 359,583,153
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Shares (144,191,845) (254,552,990)
Institutional Service Shares (101,921,645) (104,840,770)
Institutional Capital Shares (1,232,940) (189,393)
Change in net assets resulting from distributions to (247,346,430) (359,583,153)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 28,787,013,020 43,911,491,307
Net asset value of shares issued to shareholders in 46,292,533 84,240,302
payment of distributions declared
Cost of shares redeemed (26,738,535,038) (42,251,242,453)
Change in net assets resulting from share transactions 2,094,770,515 1,744,489,156
Change in net assets 2,094,770,515 1,744,489,156
NET ASSETS:
Beginning of period 7,911,198,833 6,166,709,677
End of period $ 10,005,969,348 $ 7,911,198,833
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.05 0.05 0.03 0.03
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.05) (0.05) (0.03) (0.03)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(A) 2.76% 5.36% 5.53% 5.50% 3.35% 3.15%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.20%* 0.20% 0.20% 0.20% 0.20% 0.20%
Net investment income 5.41%* 5.24% 5.37% 5.42% 3.29% 3.11%
Expense waiver(b) 0.35%* 0.35% 0.36% 0.36% 0.10% 0.07%
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $5,283,814 $4,814,583 $4,649,870 $3,441,068 $2,582,975 $2,532,482
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED JULY 31,
1998 1997 1996 1995 1994(A)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.05 0.05 0.05 0.003
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.05) (0.05) (0.05) (0.003)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN(B) 2.64% 5.10% 5.26% 5.23% 0.29%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.45%* 0.45% 0.45% 0.45% 0.39%*
Net investment income 5.20%* 5.03% 5.12% 5.53% 4.26%*
Expense waiver(c) 0.10%* 0.10% 0.11% 0.11% 0.10%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $4,659,783 $3,054,110 $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)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL CAPITAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
JANUARY 31, YEAR ENDED
1998 JULY 31, 1997(A)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.03 0.02
LESS DISTRIBUTIONS
Distributions from net investment income (0.03) (0.02)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
TOTAL RETURN(B) 2.71% 1.58%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.30%* 0.30%*
Net investment income 5.36%* 5.42%*
Expense waiver(c) 0.24%* 0.25%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $62,372 $42,505
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from April 14, 1997 (date of initial
public investment) to July 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)
NOTES TO FINANCIAL STATEMENTS
TREASURY OBLIGATIONS FUND
JANUARY 31, 1998 (UNAUDITED)
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"). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held. The investment
objective of the Fund is current income consistent with stability of principal.
The Fund offers three classes of shares: Institutional Shares, Institutional
Service Shares, and Institutional Capital Shares.
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.
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, 1998, capital paid-in aggregated
$10,005,969,348. Transactions in shares were as follows:
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Institutional Shares January 31, 1998 July 31, 1997
<S> <C> <C>
Shares sold 14,085,060,731 27,254,234,550
Shares issued to shareholders in payment of 20,831,905 50,228,539
distributions declared
Shares redeemed (13,636,662,125) (27,139,750,037)
Net change resulting from Institutional Share 469,230,511 164,713,052
transactions
<CAPTION>
Six Months
Ended Year Ended
Institutional Service Shares January 31, 1998 July 31, 1997
<S> <C> <C>
Shares sold 14,512,910,840 16,581,686,843
Shares issued to shareholders in payment of 24,480,352 33,822,698
distributions declared
Shares redeemed (12,931,717,991) (15,078,238,755)
Net change resulting from Institutional 1,605,673,201 1,537,270,786
Service Share transactions
<CAPTION>
Six Months
Ended Year Ended
Institutional Capital Shares January 31, 1998 July 31, 1997(a)
<S> <C> <C>
Shares sold 189,041,449 75,569,914
Shares issued to shareholders in payment of 980,276 189,065
distributions declared
Shares redeemed (170,154,922) (33,253,661)
Net change resulting from Institutional 19,866,803 42,505,318
Capital Share transactions
Net change resulting from share transactions 2,094,770,515 1,744,489,156
</TABLE>
(a) Reflects operations for the period from April 14, 1997 (date of initial
public investment) to July 31, 1997.
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
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
Anthony R. Bosch
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses, and other information.
[Graphic]Federated Investors
Treasury Obligations Fund
SEMI-ANNUAL REPORT TO SHAREHOLDERS JANUARY 31, 1998
Federated Securities Corp., Distributor
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 60934N500
Cusip 60934N872
Cusip 60934N823
1022004 (3/98)
[Graphic]
