1933 Act File No. 33-31602
1940 Act File No. 811-5950
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
-----
Pre-Effective Amendment No. ............................
Post-Effective Amendment No. 35 ............................ X
-------- -----
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
-----
Amendment No. 36 ........................................... X
-------- -----
MONEY MARKET OBLIGATIONS TRUST
(Exact Name of Registrant as Specified in Charter)
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)
It is proposed that this filing will become effective:
_ immediately upon filing pursuant to paragraph (b)
X on September 30, 1999 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(i) on _________________
pursuant to paragraph (a)(i) 75 days after filing pursuant to paragraph
(a)(ii) on _________________ pursuant to paragraph (a)(ii) of Rule 485
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Copies to: Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, DC 20037
PROSPECTUS
Automated Cash Management Trust
A Portfolio of Money Market Obligations Trust
CASH II SHARES
A money market mutual fund seeking to provide stability of principal and current
income consistent with stability of principal by investing primarily in a
portfolio of high quality fixed income securities maturing in 397 days or less.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
SEPTEMBER 30, 1999
CONTENTS
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 2
What are the Fund's Investment Strategies? 3
What are the Principal Securities in Which the
Fund Invests? 3
What are the Specific Risks of Investing in the Fund? 5
What Do Shares Cost? 5
How is the Fund Sold? 6
How to Purchase Shares 6
How to Redeem Shares 8
Account and Share Information 10
Who Manages the Fund? 10
Last Meeting of Shareholders 12
Financial Information 14
Report of Independent Public Accountants 28
Risk/Return Summary
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund is a money market fund that seeks to maintain a stable net asset value
of $1.00 per share. The Fund's investment objective is stability of principal
and current income consistent with stability of principal. While there is no
assurance that the Fund will achieve its investment objective, it endeavors to
do so by following the strategies and policies described in this prospectus.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The Fund invests primarily in a portfolio of high quality fixed income
securities, issued by banks, corporations and the U.S. government,
maturing in 397 days or less. The dollar-weighted average maturity of the
Fund's portfolio will be 90 days or less.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
All mutual funds take investment risks. Therefore, even though the Fund is a
money market fund that seeks to maintain a stable net asset value, it is
possible to lose money by investing in the Fund. The Shares offered by this
prospectus are not deposits or obligations of any bank, are not endorsed or
guaranteed by any bank and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other government agency.
RISK/RETURN BAR CHART AND TABLE
[Graphic]
Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Cash II Shares total
returns on a calendar year-end basis.
The Fund's Cash II Shares are not sold subject to a sales charge (load). The
total returns displayed above are based upon net asset value.
The Fund's Cash II Shares total return for the six-month period from January 1,
1999 to June 30, 1999 was 2.15%.
Within the period shown in the Chart, the Fund's Cash II Shares highest
quarterly return was 1.26% (quarter ended December 31, 1997). Its lowest
quarterly return was 1.16% (quarter ended December 31, 1998).
AVERAGE ANNUAL TOTAL RETURN TABLE
The following table represents the Fund's Cash II Shares Average Annual Total
Returns for the calendar periods ended December 31, 1998.
CALENDAR PERIOD FUND
1 Year 4.96%
Start of Performance 1 4.97%
1 The Fund's Cash II Shares start of performance date was September 27, 1996.
The Fund's Cash II Shares 7-Day Net Yield as of December 31, 1998 was 4.55%.
Investors may call the Fund at 1-800-341-7400 to acquire the current 7-Day Net
Yield.
Past performance does not necessarily predict future performance. This
information provides you with historical performance information so that you can
analyze whether the Fund's investment risks are balanced by its potential
returns.
What are the Fund's Fees and Expenses?
AUTOMATED CASH MANAGEMENT TRUST
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Fund's Cash II Shares.
<TABLE>
<CAPTION>
SHAREHOLDER FEES
<S> <C>
Fees Paid Directly From
Your Investment
Maximum Sales Charge
(Load) Imposed on
Purchases (as a percentage
of offering price) None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption proceeds,
as applicable) None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends (and
other Distributions) (as a
percentage of
offering price) None
Redemption Fee (as a
percentage of amount
redeemed, if applicable) None
Exchange Fee None
<CAPTION>
ANNUAL FUND OPERATING
EXPENSES (Before Waivers)1
<S> <C>
Expenses That are Deducted
From Fund Assets (as a
percentage of average net
assets)
Management Fee 2 0.50%
Distribution (12b-1) Fee 3 0.25%
Shareholder Services Fee 0.25%
Other Expenses 0.16%
Total Annual Fund
Operating Expenses 1.16%
1 Although not contractually obligated to do so, the adviser and distributor
waived certain amounts. These are shown below along with the net expenses the
Fund actually paid for the fiscal year ended July 31, 1999.
Total Waivers of Fund
Expenses 0.40%
Total Actual Annual Fund
Operating Expenses (after
waivers) 0.76%
2 The adviser voluntarily waived a portion of the management fee. The adviser
can terminate this voluntary waiver at any time. The management fee paid by the
Fund's Cash II Shares (after the voluntary waiver) was 0.19% for the fiscal year
ended July 31, 1999.
3 The distributor voluntarily waived a portion of the distribution (12b-1) fee.
The distributor can terminate this voluntary waiver at any time. The
distribution (12b-1) fee paid by the Fund's Cash II Shares (after the voluntary
waiver) was 0.16% for the fiscal year ended July 31, 1999. </TABLE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund's
Cash II Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Cash II Shares for the
time periods indicated and then redeem all of your Shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and that the Fund's Cash II Shares operating expenses are BEFORE WAIVERS as
shown in the Table and remain the same. Although your actual costs may be higher
or lower, based on these assumptions your costs would be: 1 Year $ 118 3
Years $ 368 5 Years $ 638 10 Years $ 1,409
What are the Fund's Investment Strategies?
The Fund invests primarily in a portfolio of high-quality fixed income
securities, issued by banks, corporations and the U.S. government, maturing in
397 days or less. The dollar-weighted average maturity of the Fund's portfolio
will be 90 days or less. The Fund's investment adviser (Adviser) actively
manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund
and select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list
of issuers and securities that meet the Adviser's standard for minimal credit
risk. The Adviser monitors the credit risks of all portfolio securities on an
ongoing basis by reviewing periodic financial data and ratings of nationally
recognized rating services.
The Adviser targets an average portfolio maturity based upon its interest rate
outlook. The Adviser formulates its interest rate outlook by analyzing a variety
of factors, such as current and expected U.S. economic growth; current and
expected interest rates and inflation; and the Federal Reserve's monetary
policy. The Adviser structures the portfolio by investing primarily in variable
rate demand instruments and commercial paper to achieve a limited barbell
structure. The Adviser generally shortens the portfolio's maturity when it
expects interest rates to rise and extends the maturity when it expects interest
rates to fall. This strategy seeks to enhance the returns from favorable
interest rate changes and reduce the effect of unfavorable changes.
What are the Principal Securities in Which the Fund Invests?
FIXED INCOME SECURITIES
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. The
following describes the types of fixed income securities in which the Fund
invests.
CORPORATE DEBT SECURITIES
Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. The Fund may also purchase interests in bank loans to
companies.
COMMERCIAL PAPER
Commercial paper is an issuer's obligation with a maturity of less than nine
months. Companies typically issue commercial paper to pay for current
expenditures. Most issuers constantly reissue their commercial paper and use the
proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue
to obtain liquidity in this fashion, its commercial paper may default.
DEMAND INSTRUMENTS
Demand instruments are corporate debt securities that the issuer must repay upon
demand. Other demand instruments require a third party, such as a dealer or
bank, to repurchase the security for its face value upon demand. The Fund treats
demand instruments as short-term securities, even though their stated maturity
may extend beyond one year.
BANK INSTRUMENTS
Bank instruments are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit
and banker's acceptances. Yankee instruments are denominated in
U.S. dollars and issued by U.S. branches of foreign banks. Eurodollar
instruments are denominated in U.S. dollars and issued by non-
U.S. branches of U.S. or foreign banks.
ASSET BACKED SECURITIES
Asset backed securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial debts
with maturities of less than ten years. However, almost any type of fixed income
assets (including other fixed income securities) may be used to create an asset
backed security. Asset backed securities may take the form of commercial paper,
notes or pass through certificates.
CREDIT ENHANCEMENT
Credit enhancement consists of an arrangement in which a company agrees to pay
amounts due on a fixed income security if the issuer defaults. In some cases the
company providing credit enhancement makes all payments directly to the security
holders and receives reimbursement from the issuer. Normally, the credit
enhancer has greater financial resources and liquidity than the issuer. For this
reason, the Adviser usually evaluates the credit risk of a fixed income security
based solely upon its credit enhancement.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser. Repurchase agreements are subject
to credit risks.
INVESTMENT RATINGS
The Fund invests in money market instruments that are either rated in the two
highest short-term rating categories or the three highest long-term rating
categories by one or more nationally recognized statistical rating organizations
or are of comparable quality to securities having such ratings.
What are the Specific Risks of Investing in the Fund?
CREDIT RISKS
Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the Fund
will lose money. Money market funds try to minimize this risk by purchasing
higher quality securities.
Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investors Services, Inc. These services assign
ratings to securities by assessing the likelihood of issuer default. Lower
credit ratings correspond to higher credit risk. If a security has not received
a rating, the Fund must rely entirely on the Adviser's credit assessment.
Credit risks include the possibility that a party to a transaction involving the
Fund will fail to meet its obligations. This could cause the Fund to lose the
benefit of the transaction or prevent the Fund from selling or buying other
securities to implement its investment strategy.
INTEREST RATE RISKS
Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain unchanged.
Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.
SECTOR RISKS
A substantial part of the Fund's portfolio may be comprised of securities credit
enhanced by banks or companies with similar characteristics. As a result, the
Fund will be more susceptible to any economic, business, political or other
developments which generally affect these entities.
What Do Shares Cost?
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is
open. The Fund attempts to stabilize the net asset value (NAV) of its Shares at
$1.00 by valuing the portfolio securities using the amortized cost method. The
Fund cannot guarantee that its NAV will always remain at $1.00 per Share. The
Fund does not charge a front-end sales charge. NAV is determined at 5:00 p.m.
(Eastern time), each day the NYSE is open.
The required minimum initial investment for Fund Shares is $25,000. There is no
required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $25,000 minimum is
reached within 90 days. An institutional investor's minimum investment is
calculated by combining all accounts it maintains with the Fund. Accounts
established through investment professionals may be subject to a smaller minimum
investment amount. Keep in mind that investment professionals may charge you
fees for their services in connection with your Share transactions.
How is the Fund Sold?
The Fund offers two share classes: Institutional Service Shares and Cash II
Shares, each representing interests in a single portfolio of securities. This
prospectus relates only to Cash II Shares. Each share class has different
expenses, which affect their performance. Contact your investment professional
or call 1-800-341-7400 for more information concerning the other class.
The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to retail customers of financial institutions or individuals,
directly or through investment professionals.
When the Distributor receives marketing fees, it may pay some or all of them to
investment professionals. The Distributor and its affiliates may pay out of
their assets other amounts (including items of material value) to investment
professionals for marketing and servicing Shares. The Distributor is a
subsidiary of Federated Investors, Inc. (Federated).
RULE 12B-1 PLAN
The Fund has adopted a Rule 12b-1 Plan, which allows it to pay marketing fees to
the Distributor and investment professionals for the sale, distribution and
customer servicing of the Fund's Cash II Shares. Because these Shares pay
marketing fees on an ongoing basis, your investment cost may be higher over time
than other shares with different sales charges and marketing fees.
How to Purchase Shares
You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.
THROUGH AN INVESTMENT PROFESSIONAL
* Establish an account with the investment professional; and
* Submit your purchase order to the investment professional before 5:00 p.m.
(Eastern time). You will receive that day's dividend if the investment
professional forwards the order to the Fund and the Fund receives payment by
5:00 p.m. (Eastern time). You will become the owner of Shares and receive
dividends when the Fund receives your payment.
Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."
DIRECTLY FROM THE FUND
* Establish your account with the Fund by submitting a completed New
Account Form; and
* Send your payment to the Fund by Federal Reserve wire or check.
You will become the owner of Shares after the Fund receives your wire or your
check. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees the Fund or its transfer agent incurs.
An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.
BY WIRE
Send your wire to:
State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
You cannot purchase Shares by wire on holidays when wire transfers are
restricted.
BY CHECK
Make your check payable to THE FEDERATED FUNDS, note your account number on the
check, and mail it to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE that
requires a street address, mail it to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund
will not accept third-party checks (checks originally payable to someone
other than you or The Federated Funds).
Orders by mail are considered received when payment by check is converted into
federal funds (normally the business day after the check is received) and Shares
begin earning dividends the next day.
BY AUTOMATIC INVESTMENTS
You may establish an account with your financial institution to automatically
purchase Shares on pre-determined dates or when your bank account reaches a
certain level. Under this program, participating financial institutions are
responsible for prompt transmission of orders and may charge you for this
service. You should read this prospectus along with your financial institution's
agreement or materials describing this service.
BY INVEST-BY-PHONE
Once you establish an account, you may use the Fund's Invest-By-Phone privilege
for future Share purchases if you have an account with a bank that is an
Automated Clearing House member. To apply, call the Fund for an authorization
form. You may use Invest-By-Phone to purchase Shares approximately two weeks
from the date you file the form with Federated Shareholder Services Company.
BY DIRECT DEPOSIT
You may complete an application with Federated Shareholder Services Company to
have your Social Security, Railroad Retirement, VA Compensation or Pension,
Civil Service Retirement and certain other retirement payments invested directly
into the Fund. The application must be filed with Federated Shareholder Services
Company before direct deposit may begin. Allow 60 to 90 days for the application
to be processed.
BY SYSTEMATIC INVESTMENT PROGRAM
Once you have opened an account, you may automatically purchase additional
Shares on a regular basis by completing the Systematic Investment Program (SIP)
section of the New Account Form or by contacting the Fund or your investment
professional. The minimum investment amount for SIPs is $100.
BY AUTOMATED CLEARING HOUSE (ACH)
Once you have opened an account, you may purchase additional Shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the appropriate sections of the New Account Form.
RETIREMENT INVESTMENTS
You may purchase Shares as retirement investments (such as qualified plans and
IRAs or transfer or rollover of assets). Call your investment professional or
the Fund for information on retirement investments. We suggest that you discuss
retirement investments with your tax adviser. You may be subject to an annual
IRA account fee.
How to Redeem Shares
You should redeem Shares:
* through an investment professional if you purchased Shares through an
investment professional; or
* directly from the Fund if you purchased Shares directly from the Fund.
THROUGH AN INVESTMENT PROFESSIONAL
Submit your redemption request to your investment professional by the end of
regular trading on the NYSE (normally 4:00 p.m. Eastern time). Investment
professionals are responsible for promptly submitting redemption requests and
providing proper written redemption instructions as outlined below.
DIRECTLY FROM THE FUND
BY TELEPHONE
You may redeem Shares by calling the Fund at
1-800-341-7400 once you have completed the appropriate authorization form
for telephone transactions.
If you call before 5:00 p.m. (Eastern time) your redemption will be wired to you
the same day. You will not receive that day's dividend.
If you call after 5:00 p.m. (Eastern time) your redemption will be wired to you
the following business day. You will receive that day's dividend.
BY MAIL
You may redeem Shares by mailing a written request to the Fund.
Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed. Send requests by mail to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
All requests must include:
* Fund Name and Share Class, account number and account registration;
* amount to be redeemed; and
* signatures of all shareholders exactly as registered.
Call your investment professional or the Fund if you need special instructions.
SIGNATURE GUARANTEES
Signatures must be guaranteed if:
* your redemption will be sent to an address other than the address of
record;
* your redemption will be sent to an address of record that was changed
within the last 30 days; or
* a redemption is payable to someone other than the shareholder(s) of
record.
A signature guarantee is designed to protect your account from fraud. Obtain a
signature guarantee from a bank or trust company, savings association, credit
union or broker, dealer, or securities exchange member. A NOTARY PUBLIC CANNOT
PROVIDE A SIGNATURE GUARANTEE.
PAYMENT METHODS FOR REDEMPTIONS
Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form or an Account Service Options Form. These payment
options require a signature guarantee if they were not established when the
account was opened:
* an electronic transfer to your account at a financial institution that is
an ACH member; or
* wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.
REDEMPTION IN KIND
Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.
LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:
* to allow your purchase to clear;
* during periods of market volatility; or
* when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.
You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.
REDEMPTIONS FROM RETIREMENT ACCOUNTS
In the absence of your specific instructions, 10% of the value of your
redemption from a retirement account in the Fund may be withheld for taxes. This
withholding only applies to certain types of retirement accounts.
SYSTEMATIC WITHDRAWAL PROGRAM
You may automatically redeem Shares in a minimum amount of $100 on a regular
basis. Complete the appropriate section of the New Account Form or an Account
Service Options Form or contact your investment professional or the Fund. Your
account value must meet the minimum initial investment amount at the time the
program is established. This program may reduce, and eventually deplete, your
account. Payments should not be considered yield or income.
CHECKWRITING
You may request checks to redeem your Fund Shares. Your account will continue to
receive the daily dividend declared on the Shares being redeemed until the check
is presented for payment.
DEBIT CARD
You may request a debit card account that allows you to redeem Shares. There is
an annual fee for this service that the Fund will automatically deduct from your
account.
ADDITIONAL CONDITIONS
TELEPHONE TRANSACTIONS
The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
SHARE CERTIFICATES
The Fund no longer issues share certificates. If you are redeeming Shares
represented by certificates previously issued by the Fund, you must return the
certificates with your written redemption request. For your protection, send
your certificates by registered or certified mail, but do not endorse them.
Account and Share Information
ACCOUNT ACTIVITY
You will receive periodic statements reporting all account activity, including
systematic transactions, dividends and capital gains paid.
DIVIDENDS AND CAPITAL GAINS
The Fund declares any dividends daily and pays them monthly to shareholders. If
you purchase Shares by wire, you begin earning dividends on the day your wire is
received. If you purchase Shares by check, you begin earning dividends on the
business day after the Fund receives your check. In either case, you earn
dividends through the day your redemption request is received.
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund pays any capital gains at least annually. Your dividends and
capital gains distributions will be automatically reinvested in additional
Shares without a sales charge, unless you elect cash payments.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, non- retirement
accounts may be closed if redemptions cause the account balance to fall below
the minimum initial investment amount. Before an account is closed, you will be
notified and allowed 30 days to purchase additional Shares to meet the minimum.
TAX INFORMATION
The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.
Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal,
state and local tax liability.
Who Manages the Fund?
The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, Federated Investment Management Company. The Adviser manages the Fund's
assets, including buying and selling portfolio securities. The Adviser's address
is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.
The Adviser and other subsidiaries of Federated advise approximately 175 mutual
funds and separate accounts, which totaled approximately $111 billion in assets
as of December 31, 1998. Federated was established in 1955 and is one of the
largest mutual fund investment managers in the United States with approximately
1,900 employees. More than 4,000 investment professionals make Federated Funds
available to their customers.
ADVISORY FEES
The Adviser receives an annual investment advisory fee of 0.50% of the Fund's
average daily net assets. The Adviser may voluntarily waive a portion of its fee
or reimburse the Fund for certain operating expenses.
YEAR 2000 READINESS
The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999 or may experience other date-related problems. The Year 2000 problem may
cause systems to process information incorrectly and could disrupt businesses,
such as the Fund, that rely on computers.
While it is impossible to determine in advance all of the risks to the Fund, the
Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.
The Fund's service providers are making changes to their computer systems to fix
any Year 2000 problems. In addition, they are working to gather information from
third-party providers to determine their Year 2000 readiness.
Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Fund
may purchase.
However, this may be difficult with certain issuers. For example, funds dealing
with foreign service providers or investing in foreign securities will have
difficulty determining the Year 2000 readiness of those entities. The financial
impact of these issues for the Fund is still being determined. There can be no
assurance that potential Year 2000 problems would not have a material adverse
effect on the Fund.
Last Meeting of Shareholders
A Special Meeting of the Fund's shareholders was held on August 11, 1999. On
January 21, 1999, the record date for the shareholders voting at the meeting,
there were 2,395,727,713 total outstanding shares. The following items were
considered by shareholders and the results were as follows:
AGENDA ITEM 1
Elected Trustees: 1
<TABLE>
<CAPTION>
WITHHELD
AUTHORITY
NAMES FOR TO VOTE
<S> <C> <C>
John F. Cunningham 1,249,762,787 19,658,905
Charles F. Mansfield, Jr. 1,249,799,912 19,621,780
John S. Walsh 1,249,938,716 19,482,976
</TABLE>
1 The following Trustees continued their terms: Thomas G. Bigley, John T.
Conroy, Jr., John F. Donahue, Nicholas P. Constantakis, Lawrence D.
Ellis, M.D., Peter E. Madden, John E. Murray, Jr., J.D., S.J.D., and
Marjorie P. Smuts.
AGENDA ITEM 2
Ratified the selection of Arthur Andersen LLP as the Trust's independent
auditors.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,246,621,621 7,177,855 15,622,215
</TABLE>
AGENDA ITEM 3
Made changes to the Fund's fundamental investment policies:
(a) Amended the Fund's fundamental investment policy regarding borrowing money
and issuing senior securities.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,147,063,713 32,146,786 90,211,193
</TABLE>
(b) Amended the Fund's fundamental investment policy regarding investing in real
estate.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,147,178,749 32,804,247 89,438,696
</TABLE>
(c) Amended the Fund's fundamental investment policy regarding investing in
commodities.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,145,459,539 33,573,769 90,388,384
</TABLE>
(d) Amended the Fund's fundamental investment policy regarding underwriting
securities.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,148,366,933 29,175,764 91,878,995
</TABLE>
(e) Amended the Fund's fundamental investment policy regarding lending assets.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,149,494,744 29,333,419 90,593,529
</TABLE>
(f) Amended the Fund's fundamental investment policy regarding concentration of
the Fund's investments in the securities of companies in the same industry.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,146,936,811 30,370,585 92,114,296
</TABLE>
(g) Amended, and made non-fundamental, the Fund's fundamental investment policy
regarding pledging assets.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,145,006,273 32,205,435 92,209,984
</TABLE>
(h) Amended, and made non-fundamental, the Fund's fundamental investment policy
regarding buying on margin.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,145,015,663 33,513,320 92,892,709
</TABLE>
(i) Amended, and made non-fundamental, the Fund's fundamental investment policy
regarding the types of money market instruments that the Fund is permitted to
purchase.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,148,497,695 29,125,262 91,798,735
</TABLE>
(j) Amended, and made non-fundamental, the Fund's fundamental investment policy
relating to investing in other investment companies.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,146,864,682 32,531,447 90,025,563
</TABLE>
(k) Made non-fundamental the Fund's fundamental investment policy relating to
investing in U.S. government securities.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,148,753,059 28,432,895 92,235,738
</TABLE>
(l) Made non-fundamental the Fund's fundamental investment policy relating to
purchasing bank instruments.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,151,237,431 28,118,226 90,066,035
</TABLE>
(m) Made non-fundamental the Fund's fundamental investment policy relating to
purchasing commercial paper.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,149,920,726 29,259,446 90,241,520
</TABLE>
(n) Made non-fundamental the Fund's fundamental investment policy relating to
engaging in repurchase agreement transactions.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,147,344,772 30,779,834 91,297,086
</TABLE>
(o) Made non-fundamental the Fund's fundamental investment policy relating to
engaging in when-issued and delayed delivery transactions.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,149,030,854 29,830,264 90,560,574
</TABLE>
AGENDA ITEM 4
Eliminated certain of the Fund's fundamental investment policies.
(a) Removed the Fund's fundamental investment policy regarding selling
securities short.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,137,810,819 40,642,756 90,968,117
</TABLE>
(b) Removed the Fund's fundamental investment policy regarding investing for the
purpose of exercising control.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,145,970,385 32,048,611 91,402,696
</TABLE>
(c) Removed the Fund's fundamental investment policy regarding the purchase of
securities of certain issuers.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,142,785,854 33,900,439 92,735,399
</TABLE>
Financial Information
FINANCIAL HIGHLIGHTS
The Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years, or since inception, if the life of
the Fund is shorter. Some of the information is presented on a per share basis.
Total returns represent the rate an investor would have earned (or lost) on an
investment in the Fund, assuming reinvestment of any dividends and capital
gains.
This information has been audited by Arthur Andersen LLP, whose report, along
with the Fund's audited financial statements, is included in this prospectus.
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Independent Public Accountants on page 28.
<TABLE>
<CAPTION>
PERIOD
ENDED
YEAR ENDED JULY 31, JULY 31,
1999 1998 1997 1
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.04
LESS DISTRIBUTIONS:
Distributions from net investment income (0.05) (0.05) (0.04)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 2 4.58% 5.07% 4.14%
RATIOS TO AVERAGE NET ASSETS:
Expenses 3 1.16% 1.14% 1.16% 4
Net investment income 3 4.09% 4.56% 4.43% 4
Expenses (after waivers) 0.76% 0.76% 0.75% 4
Net investment income (after waivers) 4.49% 4.94% 4.84% 4
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $698,119 $703,755 $725,267
</TABLE>
1 Reflects operations for the period from September 27, 1996 (date of initial
public investment) to July 31, 1997.
2 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
3 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.
4 Computed on an annualized basis.
See Notes which are an integral part of the Financial Statements
Portfolio of Investments
JULY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
COMMERCIAL PAPER-37.5% 1
BANKING-9.0%
$ 25,000,000 Abbey Funding Corp.,
(Guaranteed by Abbey
National Bank PLC,
London), 4.865% - 4.950%,
11/26/1999 - 12/1/1999 $ 24,591,821
28,993,000 Fountain Square Commercial
Funding Corp., (Fifth
Third Bank, Cincinnati
Support Agreement), 5.120%
- 5.350%, 8/12/1999 -
12/29/1999 28,759,160
60,000,000 Park Avenue Receivables
Corp., 5.120%, 8/6/1999 -
8/17/1999 59,906,133
48,000,000 Three Rivers Funding
Corp., 5.120%, 8/10/1999 -
8/20/1999 47,895,893
47,200,000 Wood Street Funding Corp.,
4.940% - 5.110%, 8/13/1999
- 8/26/1999 47,047,278
TOTAL 208,200,285
FINANCE-AUTOMOTIVE-1.4%
14,000,000 DaimlerChrysler North
America Holding Corp.,
4.840%, 8/13/1999 13,977,413
20,500,000 General Motors Acceptance
Corp., 5.250% - 5.370%,
1/26/2000 - 3/6/2000 19,923,629
TOTAL 33,901,042
FINANCE-COMMERCIAL-19.9%
115,000,000 Asset Securitization
Cooperative Corp., 5.110%,
8/25/1999 114,608,233
14,000,000 Beta Finance, Inc., 5.020%
- 5.520%, 8/3/1999 -
9/9/1999 13,955,072
25,000,000 Corporate Asset Funding
Co., Inc. (CAFCO), 4.970%,
8/5/1999 24,986,195
18,612,000 Falcon Asset
Securitization Corp.,
5.110% - 5.130%, 8/16/1999
- 8/23/1999 18,568,658
65,661,000 Greenwich Funding Corp.,
5.120% - 5.130%, 8/16/1999
- 9/9/1999 65,447,243
39,000,000 PREFCO-Preferred
Receivables Funding Co.,
4.940% - 5.120%, 8/3/1999 -
8/25/1999 38,913,963
23,328,000 Receivables Capital Corp.,
4.980% - 5.110%, 8/6/1999 -
8/23/1999 23,303,774
117,150,000 Sheffield Receivables
Corp., 5.120% - 5.140%,
8/9/1999 - 9/16/1999 116,782,602
45,500,000 Sigma Finance, Inc.,
5.110% - 5.550%, 8/16/1999
- 2/4/2000 45,162,160
TOTAL 461,727,900
FINANCE-RETAIL-2.9%
18,000,000 Associates First Capital
B.V., (Guaranteed by
Associates First Capital
Corp.), 5.200% - 5.470%,
11/19/1999 - 1/24/2000 17,659,733
50,000,000 New Center Asset Trust,
A1/P1 Series, 4.830% -
4.908%, 8/9/1999 -
8/12/1999 49,940,296
TOTAL 67,600,029
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
COMMERCIAL PAPER-continued 1
INSURANCE-4.3%
$ 95,000,000 Aspen Funding Corp.,
(Insured by MBIA), 5.037% -
5.120%,
8/16/1999 - 8/25/1999 $ 94,701,700
5,000,000 Marsh USA Inc., 5.520%,
1/28/2000 4,862,000
TOTAL 99,563,700
TOTAL COMMERCIAL PAPER 870,992,956
SHORT-TERM NOTES-9.7%
BANKING-1.1%
25,000,000 Abbey National Treasury
Services, PLC, 4.990%,
1/10/2000 24,996,789
FINANCE-AUTOMOTIVE-2.9%
10,456,760 Ford Credit Auto Owner
Trust 1999-B, Class A1,
4.978%, 1/18/2000 10,456,760
20,000,000 Ford Credit Auto Owner
Trust 1999-B, Class A2,
5.114%, 5/15/2000 20,000,000
15,000,000 Honda Auto Lease Trust
1999-A, Class A1, 5.445%,
8/15/2000 15,000,000
2,385,975 Honda Auto Receivables
1999-1 Owner Trust, Class
A-1, 4.974%, 2/15/2000 2,385,976
20,000,000 Toyota Auto Receivables
1999-A Owner Trust, Class
1, 5.365%, 8/11/2000 20,000,000
TOTAL 67,842,736
FINANCE-COMMERCIAL-4.3%
100,000,000 Beta Finance, Inc., 5.020%
- 5.520%, 1/20/2000 -
6/12/2000 99,999,445
FINANCE-EQUIPMENT-1.3%
10,000,000 Caterpillar Financial
Asset Trust 1999-A, Class
1, 5.365%, 7/25/2000 10,000,000
76,185 Copelco Capital Funding
Trust 1998-A, Class A-1,
5.680%, 8/15/1999 76,185
13,413,645 Green Tree Lease Finance
1998-1, LLC, Class A1,
5.201%, 1/20/2000 13,413,645
7,214,507 Navistar Financial 1999-A
Owner Trust, Class A-1,
5.003%, 6/15/2000 7,214,507
464,453 Newcourt Equipment Trust
Securities 1998-1, Class
A1, 5.007%, 11/20/1999 464,488
TOTAL 31,168,825
INSURANCE-0.1%
2,148,686 WFS Financial 1998-C Owner
Trust, Class A1, (Insured
by FSA),
5.395%, 11/20/1999 2,148,686
TOTAL SHORT-TERM NOTES 226,156,481
CERTIFICATE OF DEPOSIT-
7.9%
BANKING-7.9%
7,000,000 Bank of Montreal, 5.250%,
5/12/2000 6,997,370
20,000,000 Barclays Bank of Canada,
(Guaranteed by Barclays
Bank PLC, London),
5.016%, 1/13/2000 19,997,385
15,000,000 Bayerische Landesbank
Girozentrale, 5.150%,
3/21/2000 14,996,784
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
CERTIFICATE OF DEPOSIT-
continued
BANKING-CONTINUED
$ 75,000,000 Canadian Imperial Bank of
Commerce, Toronto, 4.987%
- 5.340%,
1/27/2000 - 3/3/2000 $ 74,985,632
7,000,000 Canadian Imperial Bank of
Commerce, Toronto, 5.160%,
2/23/2000 6,998,478
10,000,000 Commerzbank AG, Frankfurt,
5.200%, 4/7/2000 9,997,362
20,000,000 Rabobank Nederland,
Utrecht, 5.180%, 3/20/2000 19,995,104
15,000,000 Royal Bank of Canada,
Montreal, 5.275%, 3/9/2000 14,996,504
5,000,000 Svenska Handelsbanken,
Stockholm, 5.180%,
3/20/2000 4,999,082
10,000,000 UBS AG, 4.939%, 1/13/2000 10,003,429
TOTAL CERTIFICATE OF
DEPOSIT 183,967,130
LOAN PARTICIPATION-4.3%
BROKERAGE-2.1%
50,000,000 Goldman Sachs Group, Inc.,
5.023%, 8/2/1999 50,000,000
ELECTRICAL EQUIPMENT-0.6%
13,000,000 Mt. Vernon Phenol Plant
Partnership, (Guaranteed
by General Electric Co.),
5.050%, 5/17/2000 13,000,000
FINANCE - AUTOMOTIVE-0.5%
12,000,000 General Motors Acceptance
Corp., Mortgage of PA,
(Guaranteed by General
Motors Acceptance Corp.),
5.220%, 8/2/1999 12,000,000
FINANCE - EQUIPMENT-1.1%
25,000,000 Pitney Bowes Credit Corp.,
5.204%, 8/10/1999 24,967,625
TOTAL LOAN PARTICIPATION 99,967,625
VARIABLE RATE INSTRUMENTS-
29.0% 4
BANKING-6.6%
6,000,000 Beverly California Corp.,
(PNC Bank, N.A. LOC),
5.163%, 8/2/1999 6,000,000
3,900,000 Development Authority of
Richmond Cty, GA, (PNC
Bank, N.A. LOC), 5.163%,
8/2/1999 3,900,000
9,775,000 Hannah Boulevard LP,
(Comerica Bank, Detroit,
MI LOC), 5.250%, 8/5/1999 9,775,000
8,000,000 K-O-I Warehouse, Inc.;
Hamlet Auto Parts, Inc.;
Kentucky Motor Services,
Inc.; Mad River Auto Parts,
Inc.; Ezzel Parts
Exchange, Inc., (Series
1998), (Firstar Bank,
N.A., Cincinnati LOC),
5.230%, 8/5/1999 8,000,000
60,000,000 2, 3 Liquid Asset Backed
Securities Trust, Series
1996-3, (Westdeutsche
Landesbank Girozentrale
Swap Agreement), 5.200%,
8/16/1999 60,000,000
17,522,763 2, 3 Liquid Asset Backed
Securities Trust, Series
1997-1, (Westdeutsche
Landesbank Girozentrale
Swap Agreement), 5.180%,
8/16/1999 17,522,763
2,000,000 Manatee County, FL, CFI
Manufacturing, Inc.
Project (Series 1998),
(Huntington National Bank,
Columbus, OH LOC), 5.270%,
8/5/1999 2,000,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
VARIABLE RATE INSTRUMENTS-
continued 4
BANKING-CONTINUED
$ 12,246,217 2, 3 Rabobank Optional
Redemption Trust, Series
1997-101, 5.310%,
10/17/1999 $ 12,246,217
4,000,000 Rollins College, Series
1998, 5.200%, 8/4/1999 4,000,000
22,000,000 Societe Generale, Paris,
5.203%, 8/11/1999 21,999,603
2,631,000 Vista Funding Corp.,
Series 1996-A, (Bank One,
Ohio, N.A. LOC),
5.270%, 8/5/1999 2,631,000
5,250,000 Wendys of Las Vegas and San
Antonio, (Huntington
National Bank, Columbus,
OH LOC), 5.270%, 8/4/1999 5,250,000
TOTAL 153,324,583
BROKERAGE-2.9%
34,200,000 Morgan Stanley, Dean
Witter & Co., 5.320%,
8/1/1999 34,200,000
34,200,000 Morgan Stanley, Dean
Witter & Co., 5.370%,
8/1/1999 34,200,000
TOTAL 68,400,000
ELECTRICAL EQUIPMENT-0.9%
20,181,046 Northwest Airlines, Inc.,
(Guaranteed by General
Electric Co.), 5.163%,
8/2/1999 20,181,046
FINANCE - AUTOMOTIVE-2.1%
34,200,000 General Motors Acceptance
Corp., 5.320%, 8/1/1999 34,200,000
15,000,000 General Motors Acceptance
Corp., Mortgage of PA,
(Guaranteed by General
Motors Acceptance Corp.),
5.359%, 10/1/1999 14,865,342
TOTAL 49,065,342
FINANCE - COMMERCIAL-1.0%
23,000,000 Sigma Finance, Inc.,
5.320%, 8/18/2000 23,000,000
FINANCE - RETAIL-0.3%
7,000,000 2 Bishop's Gate Residential
Mortgage Trust 1998-2,
Class A-1, 5.420%,
8/10/1999 7,000,000
INSURANCE-15.2%
24,000,000 Aspen Funding Corp.,
(Insured by MBIA), 5.280%,
8/15/1999 24,000,000
22,500,000 First Allmerica Financial
Life Insurance Co.,
5.488%, 11/3/1999 22,500,000
12,000,000 GE Life and Annuity
Assurance Co., 5.141%,
9/1/1999 12,000,000
122,500,000 General American Life
Insurance Co., 5.370%,
8/23/1999 122,500,000
30,000,000 Jackson National Life
Insurance Co., 5.108%,
10/1/1999 30,000,000
26,790,589 2, 3 Liquid Asset Backed
Securities Trust, Series
1997-3 Senior Notes,
(Guaranteed by AMBAC),
5.298%, 9/28/1999 26,790,589
25,000,000 Monumental Life Insurance
Co., 5.390%, 8/2/1999 25,000,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
VARIABLE RATE INSTRUMENTS-
continued 4
INSURANCE-CONTINUED
$ 10,000,000 Security Life of Denver
Insurance Co., 5.371%,
10/28/1999 $ 10,000,000
25,000,000 SunAmerica Life Insurance
Co., 5.280%, 8/2/1999 25,000,000
10,000,000 Transamerica Life
Insurance and Annuity Co.,
5.439%, 11/1/1999 10,000,000
44,000,000 Travelers Insurance
Company, 5.393%, 10/1/1999 44,000,000
TOTAL 351,790,589
TOTAL VARIABLE RATE
INSTRUMENTS 672,761,560
TIME DEPOSIT-3.7% 1
BANKING-3.7%
35,000,000 Mellon Bank N.A.,
Pittsburgh, 5.125%,
8/2/1999 35,000,000
50,000,000 Toronto-Dominion Bank,
5.125%, 8/2/1999 50,000,000
TOTAL TIME DEPOSIT 85,000,000
REPURCHASE AGREEMENTS-7.6%
5
75,000,000 Bank of America, 5.130%,
dated 7/30/1999, due
8/2/1999 75,000,000
91,000,000 Bear, Stearns and Co.,
5.130%, dated 7/30/1999,
due 8/2/1999 91,000,000
10,400,000 Societe Generale
Securities Corp., 5.070%,
dated 7/30/1999, due
8/2/1999 10,400,000
TOTAL REPURCHASE
AGREEMENTS 176,400,000
TOTAL INVESTMENTS (AT
AMORTIZED COST) 6 $ 2,315,245,752
</TABLE>
1 Each issue shows the rate of discount at the time of purchase.
2 Denotes a restricted security which is subject to restrictions on resale under
Federal Securities laws. At July 31, 1999, these securities amounted to
$123,559,569 which represents 5.3% of net assets. Included in these amounts,
securities which have been deemed liquid amounted to $116,559,569 which
represents 5.02% of net assets.
3 Denotes a restricted security that has been deemed liquid by criteria approved
by the Fund's Board of Directors.
4 Variable rate securities with current rate and next demand date.
5 The repurchase agreements are collateralized fully by U.S. Treasury and/or
government 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.
6 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($2,321,935,155) at July 31, 1999.
The following acronyms are used throughout this portfolio:
AMBAC -American Municipal Bond Assurance Corporation
FSA -Financial Security Assurance
LOC -Letter of Credit
MBIA -Municipal Bond Investors Assurance
PLC -Public Limited Company
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
JULY 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments in repurchase
agreements $ 176,400,000
Investments in securities 2,138,845,752
Total investments, at
amortized cost and value $ 2,315,245,752
Cash 107,999
Income receivable 10,685,069
Receivable for shares sold 658,890
Prepaid expenses 11,430
TOTAL ASSETS 2,326,709,140
LIABILITIES:
Payable for shares
redeemed 785,424
Income distribution
payable 3,303,866
Accrued expenses 684,695
TOTAL LIABILITIES 4,773,985
Net assets for
2,321,935,155 shares
outstanding $ 2,321,935,155
NET ASSET VALUE, OFFERING
PRICE AND REDEMPTION
PROCEEDS PER SHARE
INSTITUTIONAL SERVICE
SHARES:
$1,623,815,802 /
1,623,815,802 shares
outstanding $1.00
CASH II SHARES:
$698,119,353 / 698,119,353
shares outstanding $1.00
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Operations
YEAR ENDED JULY 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 127,767,373
EXPENSES:
Investment advisory fee $ 12,157,013
Administrative personnel
and services fee 1,833,278
Custodian fees 218,196
Transfer and dividend
disbursing agent fees and
expenses 1,014,761
Directors'/Trustees' fees 17,340
Auditing fees 12,636
Legal fees 17,454
Portfolio accounting fees 159,475
Distribution services fee-
Cash II Shares 1,795,634
Shareholder services fee-
Institutional Service
Shares 4,282,871
Shareholder services fee-
Cash II Shares 1,795,634
Share registration costs 95,243
Printing and postage 204,519
Insurance premiums 264,483
Miscellaneous 35,018
TOTAL EXPENSES 23,903,555
WAIVERS:
Waiver of investment
advisory fee $ (7,485,466)
Waiver of distribution
services fee-Cash II
Shares (624,881)
Waiver of shareholder
services fee-Institutional
Service Shares (119,920)
TOTAL WAIVERS (8,230,267)
Net expenses 15,673,288
Net investment income $ 112,094,085
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED JULY 31 1999 1998
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 112,094,085 $ 116,261,385
DISTRIBUTIONS TO
SHAREHOLDERS:
Distributions from net
investment income
Institutional Service
Shares (79,840,623) (79,466,314)
Cash II Shares (32,253,462) (36,795,071)
CHANGE IN NET ASSETS
RESULTING FROM
DISTRIBUTIONS
TO SHAREHOLDERS (112,094,085) (116,261,385)
SHARE TRANSACTIONS:
Proceeds from sale of
shares 12,077,510,796 12,100,055,296
Net asset value of shares
issued to shareholders in
payment of distributions
declared 82,501,229 83,205,547
Cost of shares redeemed (12,275,892,919) (11,849,693,675)
CHANGE IN NET ASSETS
RESULTING FROM SHARE
TRANSACTIONS (115,880,894) 333,567,168
Change in net assets (115,880,894) 333,567,168
NET ASSETS:
Beginning of period 2,437,816,049 2,104,248,881
End of period $ 2,321,935,155 $ 2,437,816,049
</TABLE>
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
JULY 31, 1999
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 14 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 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
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 illiquid restricted security held as of July 31,
1999 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
<S> <C> <C>
Bishop's Gate Residential
Mortgage Trust 1998-2,
Class A-1 12/04/1998 $7,000,000
</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. As of July 31, 1999, capital paid-in aggregated $2,321,935,155.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JULY 31 1999 1998
<S> <C> <C>
INSTITUTIONAL SERVICE
SHARES:
Shares sold 8,194,463,894 7,692,911,743
Shares issued to
shareholders in payment of
distributions declared 52,248,986 48,454,343
Shares redeemed (8,356,958,182) (7,386,286,934)
NET CHANGE RESULTING FROM
INSTITUTIONAL SERVICE
SHARE TRANSACTIONS (110,245,302) 355,079,152
<CAPTION>
YEAR ENDED JULY 31 1999 1998
<S> <C> <C>
CASH II SHARES:
Shares sold 3,883,046,902 4,407,143,553
Shares issued to
shareholders in payment of
distributions declared 30,252,243 34,751,204
Shares redeemed (3,918,934,737) (4,463,406,741)
NET CHANGE RESULTING FROM
CASH II SHARE TRANSACTIONS (5,635,592) (21,511,984)
NET CHANGE RESULTING FROM
SHARE TRANSACTIONS (115,880,894) 333,567,168
</TABLE>
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE
Federated Investment Management Company, 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, Inc. 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 Class 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 Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily
net assets of the Fund for the period. The fee paid to FSSC is used to finance
certain services for shareholders and to maintain shareholder accounts. FSSC may
voluntarily choose to waive any portion of its fee. FSSC 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 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.
YEAR 2000 (UNAUDITED)
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
CHANGE OF INDEPENDENT AUDITORS
On May 19, 1999, the Trustees, upon the recommendation of the Audit Committee of
the Board of Trustees, requested and subsequently accepted the resignation of
Arthur Andersen LLP ("AA") as the Trust's independent auditors. AA's reports on
the Trust's financial statements for the fiscal years ended July 31, 1998 and
July 31, 1999, contained no adverse opinion or disclaimer of opinion nor were
they qualified or modified as to uncertainty, audit scope or accounting
principles. During the Trust's fiscal years ended July 31, 1998 and July 31,
1999, (i) there were no disagreements with AA on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of AA, would
have caused it to make reference to the subject matter of the disagreements in
connection with its reports on the financial statements for such years; and (ii)
there were no reportable events of the kind described in Item 304(a)(1)(v) of
Regulation S-K under the Securities Act of 1934, as amended.
The Trust, by action of its Trustees, upon the recommendation of the Audit
Committee of the Board, has engaged Deloitte & Touche LLP ("D&T") as the
independent auditors to audit the Trust's financial statements for the fiscal
year ending July 31, 2000. During the Trust's fiscal years ended July 31, 1998
and July 31, 1999, neither the Trust nor anyone on its behalf has consulted D&T
on items which (i) concerned the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Trust's financial statements or (ii)
concerned the subject of a disagreement (as defined in paragraph (a)(1)(iv) of
Item 304 of Regulation S-K) of reportable events (as described in paragraph
(a)(1)(v) of said Item 304).
Report of Independent Public Accountants
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
AUTOMATED CASH MANAGEMENT TRUST:
We have audited the accompanying statement of assets and liabilities of
Automated Cash Management Trust (an investment portfolio of Money Market
Obligations Trust, a Massachusetts business trust), including the portfolio of
investments, as of July 31, 1999, the related statement of operations for the
year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of July
31, 1999, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Automated Cash Management Trust (an investment portfolio of Money Market
Obligations Trust) as of July 31, 1999, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for the periods presented, in
conformity with generally accepted accounting principles.
Arthur Andersen LLP
Boston, Massachusetts
September 24, 1999
[Graphic]
Federated
World-Class Investment Manager
Automated Cash Management Trust
A Portfolio of Money Market Obligations Trust
CASH II SHARES
PROSPECTUS
SEPTEMBER 30, 1999
A Statement of Additional Information (SAI), dated September 30, 1999, is
incorporated by reference into this prospectus. Additional information about the
Fund and its investments is contained in the Fund's SAI and SemiAnnual Report to
shareholders as they become available. To obtain the SAI, the Semi-Annual Report
and other information without charge, and make inquiries, call your investment
professional or the Fund at 1-800-341- 7400.
You can obtain information about the Fund (including the SAI) by writing to or
visiting the Public Reference Room in Washington, DC. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected] or by writing to the SEC's Public
Reference Section Washington, DC 20549-0102. Call 1-202-942- 8090 for
information on the Public Reference Room's operations and copying fees.
[Graphic]
Federated
Automated Cash Management Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N831
G00554-03-CII (9/99)
[Graphic]
PROSPECTUS
Automated Cash Management Trust
A Portfolio of Money Market Obligations Trust
INSTITUTIONAL SERVICE SHARES
A money market mutual fund seeking stability of principal and current income
consistent with stability of principal by investing primarily in a portfolio of
high quality fixed income securities maturing in 397 days or less.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
SEPTEMBER 30, 1999
CONTENTS
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the
Fund Invests? 4
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 6
How is the Fund Sold? 7
How to Purchase Shares 7
How to Redeem Shares 9
Account and Share Information 11
Who Manages the Fund? 12
Last Meeting of Shareholders 13
Financial Information 15
Report of Independent Public Accountants 29
Risk/Return Summary
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund is a money market fund that seeks to maintain a stable net asset value
of $1.00 per share. The Fund's investment objective is stability of principal
and current income consistent with stability of principal. While there is no
assurance that the Fund will achieve its investment objective, it endeavors to
do so by following the strategies and policies described in this prospectus.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The Fund invests primarily in a portfolio of high quality fixed income
securities, issued by banks, corporations, and the U.S. government,
maturing in 397 days or less. The dollar-weighted average maturity of the
Fund's portfolio will be 90 days or less.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
All mutual funds take investment risks. Therefore, even though the Fund is a
money market fund that seeks to maintain a stable net asset value, it is
possible to lose money by investing in the Fund. The Shares offered by this
prospectus are not deposits or obligations of any bank, are not endorsed or
guaranteed by any bank and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other government agency.
RISK/RETURN BAR CHART AND TABLE
[Graphic]
Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's Institutional Service
Shares total returns on a calendar year-end basis.
The Fund's Institutional Service Shares are not sold subject to a sales charge
(load). The total returns displayed above are based upon net asset value.
The Fund's Institutional Service Shares total return for the six-month period
from January 1, 1999 to June 30, 1999 was 2.24%.
Within the period shown in the Chart, the Fund's Institutional Service Shares
highest quarterly return was 2.33% (quarter ended June 30, 1989). Its lowest
quarterly return was 0.68% (quarter ended June 30, 1993).
AVERAGE ANNUAL TOTAL RETURN TABLE
The following table represents the Fund's Institutional Service Shares Average
Annual Total Returns for the calendar periods ended December 31, 1998.
CALENDAR PERIOD FUND
1 Year 5.13%
5 Years 4.97%
10 Years 5.40%
The Fund's Institutional Service Shares 7-Day Net Yield as of December 31, 1998
was 4.72%. Investors may call the Fund at 1-800-341-7400 to acquire the current
7-Day Net Yield.
Past performance does not necessarily predict future performance. This
information provides you with historical performance information so that you can
analyze whether the Fund's investment risks are balanced by its potential
returns.
What are the Fund's Fees and Expenses?
AUTOMATED CASH MANAGEMENT TRUST
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund's Institutional Service Shares.
<TABLE>
<CAPTION>
SHAREHOLDER FEES
<S> <C>
Fees Paid Directly From
Your Investment
Maximum Sales Charge
(Load) Imposed on
Purchases (as a percentage
of offering price) None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption proceeds,
as applicable) None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends (and
other Distributions) (as a
percentage of
offering price) None
Redemption Fee (as a
percentage of amount
redeemed, if applicable) None
Exchange Fee None
<CAPTION>
ANNUAL FUND OPERATING
EXPENSES (Before Waivers) 1
<S> <C>
Expenses That are Deducted
From Fund Assets (as a
percentage of average net
assets)
Management Fee 2 0.50%
Distribution (12b-1) Fee None
Shareholder Services Fee 3 0.25%
Other Expenses 0.16%
Total Annual Fund
Operating Expenses 0.91%
1 Although not contractually obligated to do so, the adviser and shareholder
services provider waived certain amounts. These are shown below along with the
net expenses the Fund actually paid for the fiscal year ended July 31, 1999.
Total Waivers of Fund Expenses 0.32%
Total Actual Annual Fund
Operating Expenses (after
waivers) 0.59%
2 The adviser voluntarily waived a portion of the management fee. The adviser
can terminate the voluntary waiver at any time. The management fee paid by the
Fund's Institutional Service Shares (after the voluntary waiver) was 0.19% for
the fiscal year ended July 31, 1999. 3 The shareholder services provider has
voluntarily waived a portion of the shareholder services fee. The shareholder
services provider can terminate this voluntary waiver at any time. The
shareholder services fee paid by the Fund's Institutional Services Shares (after
voluntary waiver) was 0.24% for the fiscal year ended July 31, 1999. </TABLE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund's
Institutional Service Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Institutional Service
Shares for the time periods indicated and then redeem all of your Shares at the
end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Fund's Institutional Service Shares operating
expenses are BEFORE WAIVERS as shown in the Table and remain the same. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
1 Year $ 93
3 Years $ 290
5 Years $ 504
10 Years $ 1,120
What are the Fund's Investment Strategies?
The Fund invests primarily in a portfolio of high-quality fixed income
securities, issued by banks, corporations and the U.S. government, maturing in
397 days or less. The dollar-weighted average maturity of the Fund's portfolio
will be 90 days or less. The Fund's investment adviser (Adviser) actively
manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund
and select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list
of issuers and securities that meet the Adviser's standard for minimal credit
risk. The Adviser monitors the credit risks of all portfolio securities on an
ongoing basis by reviewing periodic financial data and ratings of nationally
recognized rating services.
The Adviser targets an average portfolio maturity based upon its interest rate
outlook. The Adviser formulates its interest rate outlook by analyzing a variety
of factors, such as current and expected U.S. economic growth; current and
expected interest rates and inflation; and the Federal Reserve's monetary
policy. The Adviser structures the portfolio by investing primarily in variable
rate demand instruments and commercial paper to achieve a limited barbell
structure. The Adviser generally shortens the portfolio's maturity when it
expects interest rates to rise and extends the maturity when it expects interest
rates to fall. This strategy seeks to enhance the returns from favorable
interest rate changes and reduce the effect of unfavorable changes.
What are the Principal Securities in Which the Fund Invests?
FIXED INCOME SECURITIES
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. The
following describes the types of fixed income securities in which the Fund
invests.
CORPORATE DEBT SECURITIES
Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. The Fund may also purchase interests in bank loans to
companies.
COMMERCIAL PAPER
Commercial paper is an issuer's obligation with a maturity of less than nine
months. Companies typically issue commercial paper to pay for current
expenditures. Most issuers constantly reissue their commercial paper and use the
proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue
to obtain liquidity in this fashion, its commercial paper may default.
DEMAND INSTRUMENTS
Demand instruments are corporate debt securities that the issuer must repay upon
demand. Other demand instruments require a third party, such as a dealer or
bank, to repurchase the security for its face value upon demand. The Fund treats
demand instruments as short-term securities, even though their stated maturity
may extend beyond one year.
BANK INSTRUMENTS
Bank instruments are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit
and banker's acceptances. Yankee instruments are denominated in
U.S. dollars and issued by U.S. branches of foreign banks. Eurodollar
instruments are denominated in U.S. dollars and issued by non-
U.S. branches of U.S. or foreign banks.
ASSET BACKED SECURITIES
Asset backed securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial debts
with maturities of less than ten years. However, almost any type of fixed income
assets (including other fixed income securities) may be used to create an asset
backed security. Asset backed securities may take the form of commercial paper,
notes, or pass through certificates.
CREDIT ENHANCEMENT
Credit enhancement consists of an arrangement in which a company agrees to pay
amounts due on a fixed income security if the issuer defaults. In some cases the
company providing credit enhancement makes all payments directly to the security
holders and receives reimbursement from the issuer. Normally, the credit
enhancer has greater financial resources and liquidity than the issuer. For this
reason, the Adviser usually evaluates the credit risk of a fixed income security
based solely upon its credit enhancement.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser. Repurchase agreements are subject
to credit risks.
INVESTMENT RATINGS
The Fund invests in money market instruments that are either rated in the two
highest short-term rating categories or the three highest long-term rating
categories by one or more nationally recognized statistical rating organizations
or are of comparable quality to securities having such ratings.
What are the Specific Risks of Investing in the Fund?
CREDIT RISKS
Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the Fund
will lose money. Money market funds try to minimize this risk by purchasing
higher quality securities.
Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investors Services, Inc. These services assign
ratings to securities by assessing the likelihood of issuer default. Lower
credit ratings correspond to higher credit risk. If a security has not received
a rating, the Fund must rely entirely on the Adviser's credit assessment.
Credit risks include the possibility that a party to a transaction involving the
Fund will fail to meet its obligations. This could cause the Fund to lose the
benefit of the transaction or prevent the Fund from selling or buying other
securities to implement its investment strategy.
INTEREST RATE RISKS
Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain unchanged.
Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.
SECTOR RISKS
A substantial part of the Fund's portfolio may be comprised of securities credit
enhanced by banks or companies with similar characteristics. As a result, the
Fund will be more susceptible to any economic, business, political or other
developments which generally affect these entities.
What Do Shares Cost?
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is
open. The Fund attempts to stabilize the net asset value (NAV) of its Shares at
$1.00 by valuing the portfolio securities using the amortized cost method. The
Fund cannot guarantee that its NAV will always remain at $1.00 per Share. The
Fund does not charge a front-end sales charge. NAV is determined at 5:00 p.m.
(Eastern time), each day the NYSE is open.
The required minimum initial investment for Fund Shares is $25,000. There is no
required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $25,000 minimum is
reached within 90 days. An institutional investor's minimum investment is
calculated by combining all accounts it maintains with the Fund. Accounts
established through investment professionals may be subject to a smaller minimum
investment amount. Keep in mind that investment professionals may charge you
fees for their services in connection with your Share transactions.
How is the Fund Sold?
The Fund offers two share classes: Institutional Service Shares and Cash II
Shares, each representing interests in a single portfolio of securities. This
prospectus relates only to Institutional Service Shares. Each share class has
different expenses, which affect their performance. Contact your investment
professional or call 1-800-341-7400 for more information concerning the other
classes.
The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to retail and private banking customers of financial
institutions or individuals, directly or through investment professionals.
The Distributor and its affiliates may pay out of their assets other
amounts (including items of material value) to investment professionals
for marketing and servicing Shares. The Distributor is a subsidiary of
Federated Investors, Inc. (Federated).
How to Purchase Shares
You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.
THROUGH AN INVESTMENT PROFESSIONAL
* Establish an account with the investment professional; and
* Submit your purchase order to the investment professional before 5:00
p.m. Eastern Time. You will receive that day's dividend if the investment
professional forwards the order to the Fund and the Fund receives payment
by 5:00 p.m. Eastern Time. You will become the owner of Shares and receive
dividends when the Fund receives your payment.
Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."
DIRECTLY FROM THE FUND
* Establish your account with the Fund by submitting a completed New
Account Form; and
* Send your payment to the Fund by Federal Reserve wire or check.
You will become the owner of Shares after the Fund receives your wire or your
check. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees the Fund or its transfer agent incurs.
An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.
BY WIRE
Send your wire to:
State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
You cannot purchase Shares by wire on holidays when wire transfers are
restricted.
BY CHECK
Make your check payable to THE FEDERATED FUNDS, note your account number on the
check, and mail it to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE that
requires a street address, mail it to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund
will not accept third-party checks (checks originally payable to someone
other than you or The Federated Funds).
Orders by mail are considered received when payment by check is converted into
federal funds (normally the business day after the check is received) and Shares
begin earning dividends the next day.
BY AUTOMATIC INVESTMENTS
You may establish an account with your financial institution to automatically
purchase Shares on pre-determined dates or when your bank account reaches a
certain level. Under this program, participating financial institutions are
responsible for prompt transmission of orders and may charge you for this
service. You should read this prospectus along with your financial institution's
agreement or materials describing this service.
BY INVEST-BY-PHONE
Once you establish an account, you may use the Fund's Invest-By-Phone privilege
for future Share purchases if you have an account with a bank that is an
Automated Clearing House member. To apply, call the Fund for an authorization
form. You may use Invest-By-Phone to purchase Shares approximately two weeks
from the date you file the form with Federated Shareholder Services Company.
BY DIRECT DEPOSIT
You may complete an application with Federated Shareholder Services Company to
have your Social Security, Railroad Retirement, VA Compensation or Pension,
Civil Service Retirement and certain other retirement payments invested directly
into the Fund. The application must be filed with Federated Shareholder Services
Company before direct deposit may begin. Allow 60 to 90 days for the application
to be processed.
BY SYSTEMATIC INVESTMENT PROGRAM
Once you have opened an account, you may automatically purchase additional
Shares on a regular basis by completing the Systematic Investment Program (SIP)
section of the New Account Form or by contacting the Fund or your investment
professional. The minimum investment amount for SIPs is $100.
BY AUTOMATED CLEARING HOUSE (ACH)
Once you have opened an account, you may purchase additional Shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the appropriate sections of the New Account Form.
How to Redeem Shares
You should redeem Shares:
* through an investment professional if you purchased Shares through an
investment professional; or
* directly from the Fund if you purchased Shares directly from the Fund.
THROUGH AN INVESTMENT PROFESSIONAL
Submit your redemption request to your investment professional by the end of
regular trading on the NYSE (normally 4:00 p.m. Eastern time). Investment
professionals are responsible for promptly submitting redemption requests and
providing proper written redemption instructions as outlined below.
DIRECTLY FROM THE FUND
BY TELEPHONE
You may redeem Shares by calling the Fund at
1-800-341-7400 once you have completed the appropriate authorization form
for telephone transactions.
If you call before 5:00 p.m. (Eastern time), your redemption will be wired to
you the same day. You will not receive that day's dividend.
If you call after 5:00 p.m. (Eastern time), your redemption will be wired to you
the following business day. You will receive that day's dividend.
BY MAIL
You may redeem Shares by mailing a written request to the Fund.
Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed. Send requests by mail to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
All requests must include:
* Fund Name and Share Class, account number and account registration;
* amount to be redeemed; and
* signatures of all shareholders exactly as registered.
Call your investment professional or the Fund if you need special instructions.
SIGNATURE GUARANTEES
Signatures must be guaranteed if:
* your redemption will be sent to an address other than the address of
record;
* your redemption will be sent to an address of record that was changed
within the last 30 days; or
* a redemption is payable to someone other than the shareholder(s) of
record.
A signature guarantee is designed to protect your account from fraud. Obtain a
signature guarantee from a bank or trust company, savings association, credit
union or broker, dealer, or securities exchange member. A NOTARY PUBLIC CANNOT
PROVIDE A SIGNATURE GUARANTEE.
PAYMENT METHODS FOR REDEMPTIONS
Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form or an Account Service Options Form. These payment
options require a signature guarantee if they were not established when the
account was opened:
* an electronic transfer to your account at a financial institution that is
an ACH member; or
* wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.
REDEMPTION IN KIND
Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.
LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:
* to allow your purchase to clear;
* during periods of market volatility; or
* when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.
You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.
SYSTEMATIC WITHDRAWAL PROGRAM
You may automatically redeem Shares in a minimum amount of $100 on a regular
basis. Complete the appropriate section of the New Account Form or an Account
Service Options Form or contact your investment professional or the Fund. Your
account value must meet the minimum initial investment amount at the time the
program is established. This program may reduce, and eventually deplete, your
account. Payments should not be considered yield or income.
CHECKWRITING
You may request checks to redeem your Fund Shares. Your account will continue to
receive the daily dividend declared on the Shares being redeemed until the check
is presented for payment.
DEBIT CARD
You may request a debit card account that allows you to redeem Shares. There is
an annual fee for this service that the Fund will automatically deduct from your
account.
ADDITIONAL CONDITIONS
TELEPHONE TRANSACTIONS
The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
SHARE CERTIFICATES
The Fund no longer issues share certificates. If you are redeeming Shares
represented by certificates previously issued by the Fund, you must return the
certificates with your written redemption request. For your protection, send
your certificates by registered or certified mail, but do not endorse them.
Account and Share Information
ACCOUNT ACTIVITY
You will receive periodic statements reporting all account activity, including
systematic transactions, dividends and capital gains paid.
DIVIDENDS AND CAPITAL GAINS
The Fund declares any dividends daily and pays them monthly to shareholders. If
you purchase Shares by wire, you begin earning dividends on the day your wire is
received. If you purchase Shares by check, you begin earning dividends on the
business day after the Fund receives your check. In either case, you earn
dividends through the day your redemption request is received.
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund pays any capital gains at least annually. Your dividends and
capital gains distributions will be automatically reinvested in additional
Shares without a sales charge, unless you elect cash payments.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, non- retirement
accounts may be closed if redemptions cause the account balance to fall below
the minimum initial investment amount. Before an account is closed, you will be
notified and allowed 30 days to purchase additional Shares to meet the minimum.
TAX INFORMATION
The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.
Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.
Who Manages the Fund?
The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, Federated Investment Management Company. The Adviser manages the Fund's
assets, including buying and selling portfolio securities. The Adviser's address
is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.
The Adviser and other subsidiaries of Federated advise approximately 175 mutual
funds and separate accounts, which totaled approximately $111 billion in assets
as of December 31, 1998. Federated was established in 1955 and is one of the
largest mutual fund investment managers in the United States with approximately
1,900 employees. More than 4,000 investment professionals make Federated Funds
available to their customers.
ADVISORY FEES
The Adviser receives an annual investment advisory fee of 0.50% of the Fund's
average daily net assets. The Adviser may voluntarily waive a portion of its fee
or reimburse the Fund for certain operating expenses.
YEAR 2000 READINESS
The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999 or may experience other date-related problems. The Year 2000 problem may
cause systems to process information incorrectly and could disrupt businesses,
such as the Fund, that rely on computers.
While it is impossible to determine in advance all of the risks to the Fund, the
Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.
The Fund's service providers are making changes to their computer systems to fix
any Year 2000 problems. In addition, they are working to gather information from
third-party providers to determine their Year 2000 readiness.
Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Fund
may purchase.
However, this may be difficult with certain issuers. For example, funds dealing
with foreign service providers or investing in foreign securities will have
difficulty determining the Year 2000 readiness of those entities. The financial
impact of these issues for the Fund is still being determined. There can be no
assurance that potential Year 2000 problems would not have a material adverse
effect on the Fund.
Last Meeting of Shareholders
A Special Meeting of the Fund's shareholders was held on August 11, 1999. On
January 21, 1999, the record date for the shareholders voting at the meeting,
there were 2,395,727,713 total outstanding shares. The following items were
considered by shareholders and the results were as follows:
AGENDA ITEM 1
Elected Trustees: 1
<TABLE>
<CAPTION>
WITHHELD
AUTHORITY
NAMES FOR TO VOTE
<S> <C> <C>
John F. Cunningham 1,249,762,787 19,658,905
Charles F. Mansfield, Jr. 1,249,799,912 19,621,780
John S. Walsh 1,249,938,716 19,482,976
</TABLE>
1 The following Trustees continued their terms: Thomas G. Bigley, John T.
Conroy, Jr., John F. Donahue, Nicholas P. Constantakis, Lawrence D.
Ellis, M.D., Peter E. Madden, John E. Murray, Jr., J.D., S.J.D., and
Marjorie P. Smuts.
AGENDA ITEM 2
Ratified the selection of Arthur Andersen LLP as the Trust's independent
auditors.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,246,621,621 7,177,855 15,622,215
</TABLE>
AGENDA ITEM 3
Made changes to the Fund's fundamental investment policies:
(a) Amended the Fund's fundamental investment policy regarding borrowing money
and issuing senior securities.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,147,063,713 32,146,786 90,211,193
</TABLE>
(b) Amended the Fund's fundamental investment policy regarding investing in real
estate.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,147,178,749 32,804,247 89,438,696
</TABLE>
(c) Amended the Fund's fundamental investment policy regarding investing in
commodities.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,145,459,539 33,573,769 90,388,384
</TABLE>
(d) Amended the Fund's fundamental investment policy regarding underwriting
securities.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,148,366,933 29,175,764 91,878,995
</TABLE>
(e) Amended the Fund's fundamental investment policy regarding lending assets.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,149,494,744 29,333,419 90,593,529
</TABLE>
(f) Amended the Fund's fundamental investment policy regarding concentration of
the Fund's investments in the securities of companies in the same industry.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,146,936,811 30,370,585 92,114,296
</TABLE>
(g) Amended, and made non-fundamental, the Fund's fundamental investment policy
regarding pledging assets.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,145,006,273 32,205,435 92,209,984
</TABLE>
(h) Amended, and made non-fundamental, the Fund's fundamental investment policy
regarding buying on margin.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,145,015,663 33,513,320 92,892,709
</TABLE>
(i) Amended, and made non-fundamental, the Fund's fundamental investment policy
regarding the types of money market instruments that the Fund is permitted to
purchase.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,148,497,695 29,125,262 91,798,735
</TABLE>
(j) Amended, and made non-fundamental, the Fund's fundamental investment policy
relating to investing in other investment companies.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,146,864,682 32,531,447 90,025,563
</TABLE>
(k) Made non-fundamental the Fund's fundamental investment policy relating to
investing in U.S. government securities.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,148,753,059 28,432,895 92,235,738
</TABLE>
(l) Made non-fundamental the Fund's fundamental investment policy relating to
purchasing bank instruments.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,151,237,431 28,118,226 90,066,035
</TABLE>
(m) Made non-fundamental the Fund's fundamental investment policy relating to
purchasing commercial paper.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,149,920,726 29,259,446 90,241,520
</TABLE>
(n) Made non-fundamental the Fund's fundamental investment policy relating to
engaging in repurchase agreement transactions.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,147,344,772 30,779,834 91,297,086
</TABLE>
(o) Made non-fundamental the Fund's fundamental investment policy relating to
engaging in when-issued and delayed delivery transactions.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,149,030,854 29,830,264 90,560,574
</TABLE>
AGENDA ITEM 4
Eliminated certain of the Fund's fundamental investment policies:
(a) Removed the Fund's fundamental investment policy regarding selling
securities short.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,137,810,819 40,642,756 90,968,117
</TABLE>
(b) Removed the Fund's fundamental investment policy regarding investing for the
purpose of exercising control.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,145,970,385 32,048,611 91,402,696
</TABLE>
(c) Removed the Fund's fundamental investment policy regarding the purchase of
securities of certain issuers.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
1,142,785,854 33,900,439 92,735,399
</TABLE>
Financial Information
FINANCIAL HIGHLIGHTS
The Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years. Some of the information is presented
on a per share basis. Total returns represent the rate an investor would have
earned (or lost) on an investment in the Fund, assuming reinvestment of any
dividends and capital gains.
This information has been audited by Arthur Andersen, LLP, whose report, along
with the Fund's audited financial statements, is included in this prospectus.
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Independent Public Accountants on page 29.
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED
YEAR ENDED JULY 31, JULY 31,
1999 1998 1997 1996 1995 1
<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 0.05 0.05 0.05 0.05 0.01
LESS DISTRIBUTIONS:
Distributions from net investment income (0.05) (0.05) (0.05) (0.05) (0.01)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 2 4.76% 5.25% 5.09% 5.20% 1.42%
RATIOS TO AVERAGE NET ASSETS:
Expenses 3 0.91% 0.89% 0.91% 0.88% 0.97% 4
Net investment income 3 4.34% 4.83% 4.64% 4.77% 5.20% 4
Expenses (after waivers) 0.59% 0.59% 0.58% 0.57% 0.57% 4
Net investment income (after waivers) 4.66% 5.13% 4.97% 5.08% 5.60% 4
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $1,623,816 $1,734,061 $1,378,982 $1,274,419
$1,141,043
</TABLE>
1 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.
2 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
3 During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.
4 Computed on an annualized basis.
See Notes which are an integral part of the Financial Statements
Portfolio of Investments
JULY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
COMMERCIAL PAPER-37.5% 1
BANKING-9.0%
$ 25,000,000 Abbey Funding Corp.,
(Guaranteed by Abbey
National Bank PLC,
London), 4.865% - 4.950%,
11/26/1999 - 12/1/1999 $ 24,591,821
28,993,000 Fountain Square Commercial
Funding Corp., (Fifth
Third Bank, Cincinnati
Support Agreement), 5.120%
- 5.350%, 8/12/1999 -
12/29/1999 28,759,160
60,000,000 Park Avenue Receivables
Corp., 5.120%, 8/6/1999 -
8/17/1999 59,906,133
48,000,000 Three Rivers Funding
Corp., 5.120%, 8/10/1999 -
8/20/1999 47,895,893
47,200,000 Wood Street Funding Corp.,
4.940% - 5.110%, 8/13/1999
- 8/26/1999 47,047,278
TOTAL 208,200,285
FINANCE-AUTOMOTIVE-1.4%
14,000,000 DaimlerChrysler North
America Holding Corp.,
4.840%, 8/13/1999 13,977,413
20,500,000 General Motors Acceptance
Corp., 5.250% - 5.370%,
1/26/2000 - 3/6/2000 19,923,629
TOTAL 33,901,042
FINANCE-COMMERCIAL-19.9%
115,000,000 Asset Securitization
Cooperative Corp., 5.110%,
8/25/1999 114,608,233
14,000,000 Beta Finance, Inc., 5.020%
- 5.520%, 8/3/1999 -
9/9/1999 13,955,072
25,000,000 Corporate Asset Funding
Co., Inc. (CAFCO), 4.970%,
8/5/1999 24,986,195
18,612,000 Falcon Asset
Securitization Corp.,
5.110% - 5.130%, 8/16/1999
- 8/23/1999 18,568,658
65,661,000 Greenwich Funding Corp.,
5.120% - 5.130%, 8/16/1999
- 9/9/1999 65,447,243
39,000,000 PREFCO-Preferred
Receivables Funding Co.,
4.940% - 5.120%, 8/3/1999 -
8/25/1999 38,913,963
23,328,000 Receivables Capital Corp.,
4.980% - 5.110%, 8/6/1999 -
8/23/1999 23,303,774
117,150,000 Sheffield Receivables
Corp., 5.120% - 5.140%,
8/9/1999 - 9/16/1999 116,782,602
45,500,000 Sigma Finance, Inc.,
5.110% - 5.550%, 8/16/1999
- 2/4/2000 45,162,160
TOTAL 461,727,900
FINANCE-RETAIL-2.9%
18,000,000 Associates First Capital
B.V., (Guaranteed by
Associates First Capital
Corp.), 5.200% - 5.470%,
11/19/1999 - 1/24/2000 17,659,733
50,000,000 New Center Asset Trust,
A1/P1 Series, 4.830% -
4.908%, 8/9/1999 -
8/12/1999 49,940,296
TOTAL 67,600,029
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
COMMERCIAL PAPER-continued 1
INSURANCE-4.3%
$ 95,000,000 Aspen Funding Corp.,
(Insured by MBIA), 5.037% -
5.120%, 8/16/1999 -
8/25/1999 $ 94,701,700
5,000,000 Marsh USA Inc., 5.520%,
1/28/2000 4,862,000
TOTAL 99,563,700
TOTAL COMMERCIAL PAPER 870,992,956
SHORT-TERM NOTES-9.7%
BANKING-1.1%
25,000,000 Abbey National Treasury
Services, PLC, 4.990%,
1/10/2000 24,996,789
FINANCE-AUTOMOTIVE-2.9%
10,456,760 Ford Credit Auto Owner
Trust 1999-B, Class A1,
4.978%, 1/18/2000 10,456,760
20,000,000 Ford Credit Auto Owner
Trust 1999-B, Class A2,
5.114%, 5/15/2000 20,000,000
15,000,000 Honda Auto Lease Trust
1999-A, Class A1, 5.445%,
8/15/2000 15,000,000
2,385,975 Honda Auto Receivables
1999-1 Owner Trust, Class
A-1, 4.974%, 2/15/2000 2,385,976
20,000,000 Toyota Auto Receivables
1999-A Owner Trust, Class
1, 5.365%, 8/11/2000 20,000,000
TOTAL 67,842,736
FINANCE-COMMERCIAL-4.3%
100,000,000 Beta Finance, Inc., 5.020%
- 5.520%, 1/20/2000 -
6/12/2000 99,999,445
FINANCE-EQUIPMENT-1.3%
10,000,000 Caterpillar Financial
Asset Trust 1999-A, Class
1, 5.365%, 7/25/2000 10,000,000
76,185 Copelco Capital Funding
Trust 1998-A, Class A-1,
5.680%, 8/15/1999 76,185
13,413,645 Green Tree Lease Finance
1998-1, LLC, Class A1,
5.201%, 1/20/2000 13,413,645
7,214,507 Navistar Financial 1999-A
Owner Trust, Class A-1,
5.003%, 6/15/2000 7,214,507
464,453 Newcourt Equipment Trust
Securities 1998-1, Class
A1, 5.007%, 11/20/1999 464,488
TOTAL 31,168,825
INSURANCE-0.1%
2,148,686 WFS Financial 1998-C Owner
Trust, Class A1, (Insured
by FSA),
5.395%, 11/20/1999 2,148,686
TOTAL SHORT-TERM NOTES 226,156,481
CERTIFICATE OF DEPOSIT-
7.9%
BANKING-7.9%
7,000,000 Bank of Montreal, 5.250%,
5/12/2000 6,997,370
20,000,000 Barclays Bank of Canada,
(Guaranteed by Barclays
Bank PLC, London),
5.016%, 1/13/2000 19,997,385
15,000,000 Bayerische Landesbank
Girozentrale, 5.150%,
3/21/2000 14,996,784
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
CERTIFICATE OF DEPOSIT-
continued
BANKING-CONTINUED
$ 75,000,000 Canadian Imperial Bank of
Commerce, Toronto, 4.987%
- 5.340%,
1/27/2000 - 3/3/2000 $ 74,985,632
7,000,000 Canadian Imperial Bank of
Commerce, Toronto, 5.160%,
2/23/2000 6,998,478
10,000,000 Commerzbank AG, Frankfurt,
5.200%, 4/7/2000 9,997,362
20,000,000 Rabobank Nederland,
Utrecht, 5.180%, 3/20/2000 19,995,104
15,000,000 Royal Bank of Canada,
Montreal, 5.275%, 3/9/2000 14,996,504
5,000,000 Svenska Handelsbanken,
Stockholm, 5.180%,
3/20/2000 4,999,082
10,000,000 UBS AG, 4.939%, 1/13/2000 10,003,429
TOTAL CERTIFICATE OF
DEPOSIT 183,967,130
LOAN PARTICIPATION-4.3%
BROKERAGE-2.1%
50,000,000 Goldman Sachs Group, Inc.,
5.023%, 8/2/1999 50,000,000
ELECTRICAL EQUIPMENT-0.6%
13,000,000 Mt. Vernon Phenol Plant
Partnership, (Guaranteed
by General Electric Co.),
5.050%, 5/17/2000 13,000,000
FINANCE - AUTOMOTIVE-0.5%
12,000,000 General Motors Acceptance
Corp., Mortgage of PA,
(Guaranteed by General
Motors Acceptance Corp.),
5.220%, 8/2/1999 12,000,000
FINANCE - EQUIPMENT-1.1%
25,000,000 Pitney Bowes Credit Corp.,
5.204%, 8/10/1999 24,967,625
TOTAL LOAN PARTICIPATION 99,967,625
VARIABLE RATE INSTRUMENTS-
29.0% 4
BANKING-6.6%
6,000,000 Beverly California Corp.,
(PNC Bank, N.A. LOC),
5.163%, 8/2/1999 6,000,000
3,900,000 Development Authority of
Richmond Cty, GA, (PNC
Bank, N.A. LOC), 5.163%,
8/2/1999 3,900,000
9,775,000 Hannah Boulevard LP,
(Comerica Bank, Detroit,
MI LOC), 5.250%, 8/5/1999 9,775,000
8,000,000 K-O-I Warehouse, Inc.;
Hamlet Auto Parts, Inc.;
Kentucky Motor Services,
Inc.; Mad River Auto Parts,
Inc.; Ezzel Parts
Exchange, Inc., (Series
1998), (Firstar Bank,
N.A., Cincinnati LOC),
5.230%, 8/5/1999 8,000,000
60,000,000 2, 3 Liquid Asset Backed
Securities Trust, Series
1996-3, (Westdeutsche
Landesbank Girozentrale
Swap Agreement), 5.200%,
8/16/1999 60,000,000
17,522,763 2, 3 Liquid Asset Backed
Securities Trust, Series
1997-1, (Westdeutsche
Landesbank Girozentrale
Swap Agreement), 5.180%,
8/16/1999 17,522,763
2,000,000 Manatee County, FL, CFI
Manufacturing, Inc.
Project (Series 1998),
(Huntington National Bank,
Columbus, OH LOC), 5.270%,
8/5/1999 2,000,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
VARIABLE RATE INSTRUMENTS-
continued 4
BANKING-CONTINUED
$ 12,246,217 2, 3 Rabobank Optional
Redemption Trust, Series
1997-101, 5.310%,
10/17/1999 $ 12,246,217
4,000,000 Rollins College, Series
1998, 5.200%, 8/4/1999 4,000,000
22,000,000 Societe Generale, Paris,
5.203%, 8/11/1999 21,999,603
2,631,000 Vista Funding Corp.,
Series 1996-A, (Bank One,
Ohio, N.A. LOC),
5.270%, 8/5/1999 2,631,000
5,250,000 Wendys of Las Vegas and San
Antonio, (Huntington
National Bank, Columbus,
OH LOC), 5.270%, 8/4/1999 5,250,000
TOTAL 153,324,583
BROKERAGE-2.9%
34,200,000 Morgan Stanley, Dean
Witter & Co., 5.320%,
8/1/1999 34,200,000
34,200,000 Morgan Stanley, Dean
Witter & Co., 5.370%,
8/1/1999 34,200,000
TOTAL 68,400,000
ELECTRICAL EQUIPMENT-0.9%
20,181,046 Northwest Airlines, Inc.,
(Guaranteed by General
Electric Co.), 5.163%,
8/2/1999 20,181,046
FINANCE - AUTOMOTIVE-2.1%
34,200,000 General Motors Acceptance
Corp., 5.320%, 8/1/1999 34,200,000
15,000,000 General Motors Acceptance
Corp., Mortgage of PA,
(Guaranteed by General
Motors Acceptance Corp.),
5.359%, 10/1/1999 14,865,342
TOTAL 49,065,342
FINANCE - COMMERCIAL-1.0%
23,000,000 Sigma Finance, Inc.,
5.320%, 8/18/2000 23,000,000
FINANCE - RETAIL-0.3%
7,000,000 2 Bishop's Gate Residential
Mortgage Trust 1998-2,
Class A-1, 5.420%,
8/10/1999 7,000,000
INSURANCE-15.2%
24,000,000 Aspen Funding Corp.,
(Insured by MBIA), 5.280%,
8/15/1999 24,000,000
22,500,000 First Allmerica Financial
Life Insurance Co.,
5.488%, 11/3/1999 22,500,000
12,000,000 GE Life and Annuity
Assurance Co., 5.141%,
9/1/1999 12,000,000
122,500,000 General American Life
Insurance Co., 5.370%,
8/23/1999 122,500,000
30,000,000 Jackson National Life
Insurance Co., 5.108%,
10/1/1999 30,000,000
26,790,589 2, 3 Liquid Asset Backed
Securities Trust, Series
1997-3 Senior Notes,
(Guaranteed by AMBAC),
5.298%, 9/28/1999 26,790,589
25,000,000 Monumental Life Insurance
Co., 5.390%, 8/2/1999 25,000,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
VARIABLE RATE INSTRUMENTS-
continued 4
INSURANCE-CONTINUED
$ 10,000,000 Security Life of Denver
Insurance Co., 5.371%,
10/28/1999 $ 10,000,000
25,000,000 SunAmerica Life Insurance
Co., 5.280%, 8/2/1999 25,000,000
10,000,000 Transamerica Life
Insurance and Annuity Co.,
5.439%, 11/1/1999 10,000,000
44,000,000 Travelers Insurance
Company, 5.393%, 10/1/1999 44,000,000
TOTAL 351,790,589
TOTAL VARIABLE RATE
INSTRUMENTS 672,761,560
TIME DEPOSIT-3.7% 1
BANKING-3.7%
35,000,000 Mellon Bank N.A.,
Pittsburgh, 5.125%,
8/2/1999 35,000,000
50,000,000 Toronto-Dominion Bank,
5.125%, 8/2/1999 50,000,000
TOTAL TIME DEPOSIT 85,000,000
REPURCHASE AGREEMENTS-7.6%
5
75,000,000 Bank of America, 5.130%,
dated 7/30/1999, due
8/2/1999 75,000,000
91,000,000 Bear, Stearns and Co.,
5.130%, dated 7/30/1999,
due 8/2/1999 91,000,000
10,400,000 Societe Generale
Securities Corp., 5.070%,
dated 7/30/1999, due
8/2/1999 10,400,000
TOTAL REPURCHASE
AGREEMENTS 176,400,000
TOTAL INVESTMENTS (AT
AMORTIZED COST) 6 $ 2,315,245,752
</TABLE>
1 Each issue shows the rate of discount at the time of purchase.
2 Denotes a restricted security which is subject to restrictions on resale under
Federal Securities laws. At July 31, 1999, these securities amounted to
$123,559,569 which represents 5.3% of net assets. Included in these amounts,
securities which have been deemed liquid amounted to $116,559,569 which
represents 5.02% of net assets.
3 Denotes a restricted security that has been deemed liquid by criteria approved
by the Fund's Board of Directors.
4 Variable rate securities with current rate and next demand date.
5 The repurchase agreements are collateralized fully by U.S. Treasury and/or
government 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.
6 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($2,321,935,155) at July 31, 1999.
The following acronyms are used throughout this portfolio:
AMBAC -American Municipal Bond Assurance Corporation
FSA -Financial Security Assurance
LOC -Letter of Credit
MBIA -Municipal Bond Investors Assurance
PLC -Public Limited Company
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
JULY 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments in repurchase
agreements $ 176,400,000
Investments in securities 2,138,845,752
Total investments, at
amortized cost and value $ 2,315,245,752
Cash 107,999
Income receivable 10,685,069
Receivable for shares sold 658,890
Prepaid expenses 11,430
TOTAL ASSETS 2,326,709,140
LIABILITIES:
Payable for shares
redeemed 785,424
Income distribution
payable 3,303,866
Accrued expenses 684,695
TOTAL LIABILITIES 4,773,985
Net assets for
2,321,935,155 shares
outstanding $ 2,321,935,155
NET ASSET VALUE, OFFERING
PRICE AND REDEMPTION
PROCEEDS PER SHARE
INSTITUTIONAL SERVICE
SHARES:
$1,623,815,802 /
1,623,815,802 shares
outstanding $1.00
CASH II SHARES:
$698,119,353 / 698,119,353
shares outstanding $1.00
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Operations
YEAR ENDED JULY 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 127,767,373
EXPENSES:
Investment advisory fee $ 12,157,013
Administrative personnel
and services fee 1,833,278
Custodian fees 218,196
Transfer and dividend
disbursing agent fees and
expenses 1,014,761
Directors'/Trustees' fees 17,340
Auditing fees 12,636
Legal fees 17,454
Portfolio accounting fees 159,475
Distribution services fee-
Cash II Shares 1,795,634
Shareholder services fee-
Institutional Service
Shares 4,282,871
Shareholder services fee-
Cash II Shares 1,795,634
Share registration costs 95,243
Printing and postage 204,519
Insurance premiums 264,483
Miscellaneous 35,018
TOTAL EXPENSES 23,903,555
WAIVERS:
Waiver of investment
advisory fee $ (7,485,466)
Waiver of distribution
services fee-Cash II
Shares (624,881)
Waiver of shareholder
services fee-Institutional
Service Shares (119,920)
TOTAL WAIVERS (8,230,267)
Net expenses 15,673,288
Net investment income $ 112,094,085
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED JULY 31 1999 1998
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 112,094,085 $ 116,261,385
DISTRIBUTIONS TO
SHAREHOLDERS:
Distributions from net
investment income
Institutional Service
Shares (79,840,623) (79,466,314)
Cash II Shares (32,253,462) (36,795,071)
CHANGE IN NET ASSETS
RESULTING FROM
DISTRIBUTIONS
TO SHAREHOLDERS (112,094,085) (116,261,385)
SHARE TRANSACTIONS:
Proceeds from sale of
shares 12,077,510,796 12,100,055,296
Net asset value of shares
issued to shareholders in
payment of distributions
declared 82,501,229 83,205,547
Cost of shares redeemed (12,275,892,919) (11,849,693,675)
CHANGE IN NET ASSETS
RESULTING FROM SHARE
TRANSACTIONS (115,880,894) 333,567,168
Change in net assets (115,880,894) 333,567,168
NET ASSETS:
Beginning of period 2,437,816,049 2,104,248,881
End of period $ 2,321,935,155 $ 2,437,816,049
</TABLE>
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
JULY 31, 1999
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 14 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 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
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 illiquid restricted security held as of July 31,
1999 is as follows:
<TABLE>
<CAPTION>
Acquisition Acquisition
SECURITY Date Cost
<S> <C> <C>
Bishop's Gate Residential
Mortgage Trust 1998-2,
Class A-1 12/04/1998 $7,000,000
</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. As of July 31, 1999, capital paid-in aggregated $2,321,935,155.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED JULY 31 1999 1998
<S> <C> <C>
INSTITUTIONAL SERVICE
SHARES:
Shares sold 8,194,463,894 7,692,911,743
Shares issued to
shareholders in payment of
distributions declared 52,248,986 48,454,343
Shares redeemed (8,356,958,182) (7,386,286,934)
NET CHANGE RESULTING FROM
INSTITUTIONAL SERVICE
SHARE TRANSACTIONS (110,245,302) 355,079,152
<CAPTION>
YEAR ENDED JULY 31 1999 1998
<S> <C> <C>
CASH II SHARES:
Shares sold 3,883,046,902 4,407,143,553
Shares issued to
shareholders in payment of
distributions declared 30,252,243 34,751,204
Shares redeemed (3,918,934,737) (4,463,406,741)
NET CHANGE RESULTING FROM
CASH II SHARE TRANSACTIONS (5,635,592) (21,511,984)
NET CHANGE RESULTING FROM
SHARE TRANSACTIONS (115,880,894) 333,567,168
</TABLE>
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE
Federated Investment Management Company, 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, Inc. 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 Class 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 Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily
net assets of the Fund for the period. The fee paid to FSSC is used to finance
certain services for shareholders and to maintain shareholder accounts. FSSC may
voluntarily choose to waive any portion of its fee. FSSC 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 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.
YEAR 2000 (UNAUDITED)
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
CHANGE OF INDEPENDENT AUDITORS
On May 19, 1999, the Trustees, upon the recommendation of the Audit Committee of
the Board of Trustees, requested and subsequently accepted the resignation of
Arthur Andersen LLP ("AA") as the Trust's independent auditors. AA's reports on
the Trust's financial statements for the fiscal years ended July 31, 1998 and
July 31, 1999, contained no adverse opinion or disclaimer of opinion nor were
they qualified or modified as to uncertainty, audit scope or accounting
principles. During the Trust's fiscal years ended July 31, 1998, and July 31,
1999: (i) there were no disagreements with AA on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of AA, would
have caused it to make reference to the subject matter of the disagreements in
connection with its reports on the financial statements for such years; and (ii)
there were no reportable events of the kind described in Item 304(a)(1)(v) of
Regulation S-K under the Securities Act of 1934, as amended.
The Trust, by action of its Trustees, upon the recommendation of the Audit
Committee of the Board, has engaged Deloitte & Touche LLP ("D&T") as the
independent auditors to audit the Trust's financial statements for the fiscal
year ending July 31, 2000. During the Trust's fiscal years ended July 31, 1998
and July 31, 1999, neither the Trust nor anyone on its behalf has consulted D&T
on items which (i) concerned the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Trust's financial statements or (ii)
concerned the subject of a disagreement (as defined in paragraph (a)(1)(iv) of
Item 304 of Regulation S-K) of reportable events (as described in paragraph
(a)(1)(v) of said Item 304.
Report of Independent Public Accountants
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
AUTOMATED CASH MANAGEMENT TRUST:
We have audited the accompanying statement of assets and liabilities of
Automated Cash Management Trust (an investment portfolio of Money Market
Obligations Trust, a Massachusetts business trust), including the portfolio of
investments, as of July 31, 1999, the related statement of operations for the
year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of July
31, 1999, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Automated Cash Management Trust (an investment portfolio of Money Market
Obligations Trust) as of July 31, 1999, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for the periods presented, in
conformity with generally accepted accounting principles.
Arthur Andersen LLP
Boston, Massachusetts
September 24, 1999
[Graphic]
Federated
World-Class Investment Manager
Automated Cash Management Trust
A Portfolio of Money Market Obligations Trust
INSTITUTIONAL SERVICE SHARES
SEPTEMBER 30, 1999
PROSPECTUS
A Statement of Additional Information (SAI), dated September 30, 1999, is
incorporated by reference into this prospectus. Additional information about the
Fund and its investments is contained in the Fund's SAI and SemiAnnual Report to
shareholders as they become available. To obtain the SAI, the Semi-Annual Report
and other information without charge, and make inquiries, call your investment
professional or the Fund at 1-800-341- 7400.
You can obtain information about the Fund (including the SAI) by writing to or
visiting the Public Reference Room in Washington, DC. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected] or by writing to the SEC's Public
Reference Section Washington, DC 20549-0102. Call 1-202-942- 8090 for
information on the Public Reference Room's operations and copying fees.
[Graphic]
Federated
Automated Cash Management Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N864
G00554-01-SS (9/99)
[Graphic]
AUTOMATED GOVERNMENT MONEY TRUST
A Portfolio of Money Market Obligations Trust
A money market mutual fund seeking stability of principal and current income
consistent with stability of principal by investing primarily in a portfolio of
U.S. Treasury securities maturing in 397 days or less.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
<PAGE>
September 30, 1999
<PAGE>
Contents
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the
Fund Invests? 4
What are the Specific Risks of Investing in the Fund? 5
What Do Shares Cost? 5
How is the Fund Sold? 5
How to Purchase Shares 5
How to Redeem Shares 6
Account and Share Information 8
Who Manages the Fund? 9
Last Meeting of Shareholders 10
Financial Information 11
Independent Auditors' Report 21
<PAGE>
RISK/RETURN SUMMARY
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund is a money market fund that seeks to maintain a stable net asset value
of $1.00 per share. The Fund's investment objective is stability of principal
and current income consistent with stability of principal. While there is no
assurance that the Fund will achieve its investment objective, it endeavors to
do so by following the strategies and policies described in this prospectus.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The Fund invests primarily in a portfolio of U.S. Treasury securities maturing
in 397 days or less. These investments include repurchase agreements
collateralized fully by U.S. Treasury securities. The dollar-weighted average
maturity of the Fund's portfolio will be 90 days or less.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
All mutual funds take investment risks. Therefore, even though the Fund is a
money market fund that seeks to maintain a stable net asset value, it is
possible to lose money by investing in the Fund. The Shares offered by this
prospectus are not deposits or obligations of any bank, are not endorsed or
guaranteed by any bank and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other government agency.
<PAGE>
Risk/Return Bar Chart and Table
Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's total returns on a
calendar year-end basis. The Fund's shares are not sold subject to a sales
charge (load). The total returns displayed above are based upon net asset value.
The Fund's total return for the six month period from January 1, 1999 to June
30, 1999 was 2.12%. Within the period shown in the Chart, the Fund's highest
quarterly return was 2.26% (quarter ended June 30, 1989). Its lowest quarterly
return was 0.66% (quarter ended June 30, 1993). Average Annual Total Return
Table The following table represents the Fund's Average Annual Total Returns,
for the calendar periods ending December 31, 1998. Calendar Period Fund 1 Year
4.96% 5 Years 4.83% 10 Years 5.25%
The Fund's 7-Day Net Yield as of December 31, 1998 was 4.36%. Investors may call
the Fund at 1-800-341-7400 to acquire the current 7-Day Net Yield. Past
performance does not necessarily predict future performance. This information
provides you with historical performance information so that you can analyze
whether the Fund's investment risks are balanced by its potential
returns.
<PAGE>
WHAT ARE THE FUND'S FEES AND EXPENSES?
AUTOMATED GOVERNMENT MONEY TRUST
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Fund. Shareholder Fees Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price) None Maximum Deferred Sales Charge (Load) (as a percentage of original
purchase price or redemption None proceeds, as applicable) Maximum Sales Charge
(Load) Imposed on Reinvested Dividends (and other Distributions) (as a None
percentage of offering price). Redemption Fee (as a percentage of amount
redeemed, if applicable) None Exchange Fee None
Annual Fund Operating Expenses (Before Waivers)1 Expenses That are Deducted From
Fund Assets (as a percentage of average net assets) Management Fee2 0.50%
Distribution (12b-1) Fee None Shareholder Services Fee3 0.25% Other Expenses
0.10% Total Annual Fund Operating Expenses 0.85% 1Although not contractually
obligated to do so, the Adviser and Shareholder Services Provider waived
certain amounts. These are shown below along with the net expenses the Fund
actually paid for the fiscal year ended July31, 1999.
Total Waivers of Fund Expenses 0.26% Total Actual Annual Operating Expenses
(after waivers) 0.59% 2The Adviser voluntarily waived a portion of the
management fee. The Adviser can terminate this
voluntary waiver at any time. The management fee paid by the Fund (after the
voluntary waiver) was 0.25% for the fiscal year ended July31, 1999.
3The Shareholder Services Provider voluntarily waived a portion of the
shareholder services fee. The Shareholder Services Provider can terminate
this voluntary waiver at any time. The shareholder services fee paid by the
Fund (after the voluntary waiver) was 0.24% for the fiscal year ended July31,
1999.
<PAGE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund's
Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Shares for the time
periods indicated and then redeem all of your Shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and that the Fund's Share's operating expenses are before waivers as shown in
the Table and remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
1 Year $ 87
3 Years $ 271
5 Years $ 471
10 Years $1,049
WHAT ARE THE FUND'S INVESTMENT STRATEGIES?
The Fund invests at least 65% of its assets in a portfolio of U.S. Treasury
securities maturing in 397 days or less. These investments include repurchase
agreements collateralized fully by U.S. Treasury securities. The dollar-weighted
average maturity of the Fund's portfolio will be 90 days or less.
The Adviser targets a dollar-weighted average portfolio maturity range based
upon its interest rate outlook. The Adviser formulates its interest rate outlook
by analyzing a variety of factors, such as:
n current U.S. economic activity and the economic outlook;
n current short-term interest rates;
n the Federal Reserve Board's policies regarding short-term interest rates; and
n the potential effects of foreign economic activity on U.S. short-term interest
rates. The Adviser generally shortens the portfolio's dollar-weighted average
maturity when it expects interest rates to rise and extends the maturity when it
expects interest rates to fall. The Adviser selects securities used to shorten
or extend the portfolio's dollar-weighted average maturity by comparing the
returns currently offered by different investments to their historical and
expected returns.
WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?
U.S. TREASURY SECURITIES
U.S. Treasury securities are direct obligations of the federal government of the
United States. U.S. Treasury securities pay interest, dividends or distributions
at a specified rate. The rate may be fixed or adjusted periodically. In
addition, the U.S. Treasury must repay the principal amount of the security,
normally within a specified time.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.
Repurchase agreements are subject to credit risks.
WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?
Interest Rate Risks
Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain unchanged.
Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.
CREDIT RISKs
Credit risk includes the possibility that a party to a transaction involving the
Fund will fail to meet its obligations. This could cause the Fund to lose the
benefit of the transaction or prevent the Fund from selling or buying other
securities to implement its investment strategy.
WHAT DO SHARES COST?
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is
open. The Fund attempts to stabilize the net asset value (NAV) of its shares at
$1.00 by valuing the portfolio securities using the amortized cost method. The
Fund cannot guarantee that its NAV will always remain at $1.00 per share. The
Fund does not charge a front- end sales charge. NAV is determined at 5:00 p.m.
(Eastern time) each day the NYSE is open.
The required minimum initial investment for Fund Shares is $25,000. There is
no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $25,000 minimum
is reached within 90 days. An institutional investor's minimum investment is
calculated by combining all accounts it maintains with the Fund. Accounts
established through investment professionals may be subject to a smaller minimum
investment amount. Keep in mind that investment professionals may charge you
fees for their services in connection with your Share transactions.
HOW IS THE FUND SOLD?
The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to individuals, directly or through investment professionals.
The Distributor and its affiliates may pay out of their assets other amounts
(including items of material value) to investment professionals for marketing
and servicing Shares. The Distributor is a subsidiary of Federated Investors,
Inc. (Federated).
HOW TO PURCHASE SHARES
You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.
THROUGH AN INVESTMENT PROFESSIONAL
n Establish an account with the investment professional; and
n
<PAGE>
Submit your purchase order to the investment professional before 5:00 p.m.
(Eastern time). You will receive that day's dividend if the investment
professional forwards the order to the Fund and the Fund receives payment by
5:00 p.m. (Eastern time). You will become the owner of Shares and receive
dividends when the Fund receives your payment. Investment professionals should
send payments according to the instructions in the sections "By Wire" or "By
Check."
DIRECTLY FROM THE FUND
n Establish your account with the Fund by submitting a completed New Account
Form; and n Send your payment to the Fund by Federal Reserve wire or check. You
will become the owner of Shares after the Fund receives your wire or your check.
If your check does not clear, your purchase will be canceled and you could be
liable for any losses or fees the Fund or its transfer agent incurs.
An institution may establish an account and place an order by calling the Fund
and you will become a shareholder after the Fund receives the order.
By Wire Send your wire to:
State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
You cannot purchase Shares by wire on holidays when wire transfers are
restricted.
By Check
Make your check payable to The Federated Funds, note your account number on the
check, and mail it to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
If you send your check by a private courier or overnight delivery service that
requires a street address, mail it to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third- party checks (checks originally payable to someone other than
you or The Federated Funds).
Orders by mail are considered received when payment by check is converted into
federal funds (normally the business day after the check is received) and Shares
begin earning dividends the next day.
BY AUTOMATIC INVESTMENTS
You may establish an account with your financial institution to automatically
purchase Shares on pre- determined dates or when your bank account reaches a
certain level. Under this program, participating financial institutions are
responsible for prompt transmission of orders and may charge you for this
service. You should read this prospectus along with your financial institution's
agreement or materials describing this service.
HOW TO REDEEM SHARES
You should redeem Shares:
n through an investment professional if you purchased Shares through an
investment professional; or n directly from the Fund if you purchased Shares
directly from the Fund.
THROUGH AN INVESTMENT PROFESSIONAL
Submit your redemption request to your investment professional by the end of
regular trading on the NYSE (normally 4:00 p.m. Eastern time). Investment
professionals are responsible for promptly submitting redemption requests and
providing proper written redemption instructions as outlined below.
DIRECTLY FROM THE FUND
By Telephone
You may redeem Shares by calling the Fund at 1-800-341-7400 once you have
completed the appropriate authorization form for telephone transactions.
If you call before 5:00 p.m. (Eastern time), your redemption will be wired to
you the same day. You will not receive that day's dividend.
If you call after 5:00 p.m. (Eastern time), your redemption will be wired to
you the following business day. You will receive that day's dividend.
By Mail
You may redeem Shares by mailing a written request to the Fund.
Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.
Send requests by mail to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
Send requests by private courier or overnight delivery service to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317 All requests must include:
n Fund Name and Share class, account number and account registration; n amount
to be redeemed; and n signatures of all shareholders exactly as registered. Call
your investment professional or the Fund if you need special instructions.
Signature Guarantees Signatures must be guaranteed if:
n your redemption will be sent to an address other than the address of
record;
n your redemption will be sent to an address of record that was changed within
the last 30 days; or n a redemption is payable to someone other than the
shareholder(s) of record. A signature guarantee is designed to protect your
account from fraud. Obtain a signature guarantee from a bank or trust company,
savings association, credit union or broker, dealer, or securities exchange
member. A notary public cannot provide a signature guarantee.
PAYMENT METHODS FOR REDEMPTIONS
Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form or an Account Service Options Form. These payment
options require a signature guarantee if they were not established when the
account was opened: n an electronic transfer to your account at a financial
institution that is an ACH member; or n wire payment to your account at a
domestic commercial bank that is a Federal Reserve System member.
<PAGE>
Redemption in Kind
Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.
LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:
n to allow your purchase to clear;
n during periods of market volatility; or
n when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets. You will not accrue interest or dividends on
uncashed checks from the Fund if those checks are undeliverable and returned to
the Fund.
Redemptions from retirement accounts
In the absence of your specific instructions, 10% of the value of your
redemption from a retirement account in the Fund may be withheld for taxes. This
withholding only applies to certain types of retirement accounts.
CHECKWRITING
You may request checks to redeem your Fund Shares. Your account will continue to
receive the daily dividend declared on the Shares being redeemed until the check
is presented for payment.
DEBIT CARD
You may request a debit card account that allows you to redeem Shares. There is
an annual fee for this service that the Fund will automatically deduct from your
account.
ADDITIONAL CONDITIONS
Telephone Transactions
The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
Share Certificates
The Fund no longer issues share certificates. If you are redeeming Shares
represented by certificates previously issued by the Fund, you must return the
certificates with your written redemption request. For your protection, send
your certificates by registered or certified mail, but do not endorse them.
ACCOUNT AND SHARE INFORMATION
account activity
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.
DIVIDENDS AND CAPITAL GAINS
The Fund declares any dividends daily and pays them monthly to shareholders. If
you purchase Shares by wire, you begin earning dividends on the day your wire is
received. If you purchase Shares by check, you begin earning dividends on the
business day after the Fund receives your check. In either case, you earn
dividends through the day your redemption request is received.
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund pays any capital gains at least annually. Your dividends and
capital gains distributions will be automatically reinvested in additional
Shares, unless you elect cash payments.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, non-retirement
accounts may be closed if redemptions cause the account balance to fall below
the minimum initial investment amount. Before an account is closed, you will be
notified and allowed 30 days to purchase additional Shares to meet the minimum.
TAX INFORMATION
The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets
Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state and
local tax liability.
WHO MANAGES THE FUND?
The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, Federated Investment Management Company. The Adviser manages the Fund's
assets, including buying and selling portfolio securities. The Adviser's address
is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.
The Adviser and other subsidiaries of Federated advise approximately 175
mutual funds and separate accounts, which totaled approximately $111 billion in
assets as of December 31, 1998. Federated was established in 1955 and is one of
the largest mutual fund investment managers in the United States with
approximately 1,900 employees. More than 4,000 investment professionals make
Federated Funds available to their customers.
Advisory Fees
The Adviser receives an annual investment advisory fee of 0.50% of the Fund's
average daily net assets. The Adviser may voluntarily waive a portion of its fee
or reimburse the Fund for certain operating expenses.
Year 2000 Readiness
The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999 or may experience other date- related problems. The Year 2000 problem may
cause systems to process information incorrectly and could disrupt businesses,
such as the Fund, that rely on computers.
While it is impossible to determine in advance all of the risks to the Fund,
the Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.
The Fund's service providers are making changes to their computer systems to
fix any Year 2000 problems. In addition, they are working to gather information
from third-party providers to determine their Year 2000 readiness.
Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Fund
may purchase.
The financial impact of these issues for the Fund is still being determined.
There can be no assurance that potential Year 2000 problems would not have a
material adverse effect on the Fund.
LAST MEETING OF SHAREHOLDERS
A Special Meeting of the Fund's shareholders was held on March 22, 1999. On
January 21, 1999, the record date for the shareholders voting at the meeting,
there were 2,295,420,900 total outstanding shares. The following items were
considered by shareholders and the results were as follows:
Agenda Item 1
Elected Trustees:1
Names For Withheld
Authority
to Vote
Thomas G. Bigley 1,232,810,2136,849,766
John T. Conroy, Jr. 1,232,810,2136,849,766
Nicholas P. Constantakis 1,232,810,2136,849,766
John F. Cunningham 1,232,810,2136,849,766
J. Christopher Donahue 1,232,810,2136,849,766
Peter E. Madden 1,232,810,2136,849,766
Charles F. Mansfield, Jr. 1,232,810,2136,849,766
John. E. Murray, Jr., 1,232,810,2136,849,766
J.D., S.J.D.
John S. Walsh 1,232,810,2136,849,766
1 The following Trustees continued their terms: John F. Donahue,
Lawrence D. Ellis, M.D., and Marjorie P. Smuts.
Agenda Item 2
Ratified the selection of Deloitte & Touche LLP as the Fund's independent
auditors.
For Against Abstentions
and Broker
Non-Votes
1,227,141,512 8,826,869 3,691,598
Agenda Item 3
Made changes to the Fund's fundamental investment policies:
(a) Approved making non-fundamental, and amending, the Fund's fundamental
investment policy regarding maturity
of money market instruments.
For Against Abstentions
and Broker
Non-Votes
1,081,370,461 12,684,420145,605,098
(b) Amended the Fund's fundamental investment policy regarding acceptable
investments to permit investments in
the securities of other investment companies.
For Against Abstentions
and Broker
Non-Votes
1,076,005,937 18,113,721145,540,321
<PAGE>
(c) Amended the Fund's fundamental investment policy regarding borrowing to
permit the purchase of securities
while borrowings are outstanding.
For Against Abstentions
and Broker
Non-Votes
1,003,280,008 12,026,974208,436,392
Agenda Item 4
Approved an amendment and restatement to the Fund's Declaration of Trust to
require the approval by a "1940 Act" majority of the outstanding voting shares
in the event of the sale or conveyance of the assets of the Fund to
another trust or corporation.
For Against Abstentions
and Broker
Non-Votes
1,124,592,634 12,026,974103,040,371
Agenda Item 5 Approved a proposed Agreement and Plan of Reorganization between
the Fund and Money Market Obligations Trust, on behalf of its series, Automated
Government Money Trust (the "New Fund"), whereby the New Fund would acquire all
of the assets of the Fund in exchange for shares of the New Fund to be
distributed pro rata by the Fund to its shareholders in complete liquidation and
termination of the Fund.
For Against Abstentions
and Broker
Non-Votes
1,123,156,835 10,385,85114,927,576
FINANCIAL INFORMATION
The following Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years. Some of the information is presented
on a per share basis. Total returns represent the rate an investor would have
earned (or lost) on an investment in the Fund, assuming reinvestment of any
dividends and capital gains.
This information has been audited by Deloitte & Touche LLP whose report, along
with the Fund's audited financial statements, is included in this prospectus.
The semi-annual report, dated January 31, 1999, which contains unaudited
financial statements, is incorporated by reference into this prospectus.
<PAGE>
AUTOMATED GOVERNMENT MONEY TRUST
A Portfolio of Money Market Obligations Trust
sEPTEMBER 30, 1999
A Statement of Additional Information (SAI) dated September 30, 1999 is
incorporated by reference into this prospectus. Additional information about the
Fund and its investments is contained in the Fund's SAI and SemiAnnual Report to
shareholders as it becomes available. To obtain the SAI, the Semi-Annual Report
and other information without charge, and make inquiries call your investment
professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or
visiting the Public Reference Room in Washington, D.C. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected] or by writing to the SEC's Public
Reference Section, Washington, D.C. 20549-0102. Call 1- 202-942-8090 for
information on the Public Reference Room's operations and copying fees.
Investment Company Act File No. 811-5950
Cusip 60934N815
8082201A (9/99)
PROSPECTUS
Trust for U.S. Treasury Obligations
A Portfolio of Money Market Obligations Trust
A money market mutual fund seeking stability of principal and current income
consistent with stability of principal by investing only in a portfolio U.S.
Treasury securities maturing in 397 days or less.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
SEPTEMBER 30, 1999
CONTENTS
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the
Fund Invests? 4
What are the Specific Risks of Investing in the Fund? 5
What Do Shares Cost? 5
How is the Fund Sold? 5
How to Purchase Shares 5
How to Redeem Shares 7
Account and Share Information 8
Who Manages the Fund? 9
Last Meeting of Shareholders 10
Financial Information 12
Report of Ernst & Young LLP, Independent Auditors 22
Risk/Return Summary
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund is a money market fund that seeks to maintain a stable net asset value
of $1.00 per share. The Fund's investment objective is stability of principal
and current income consistent with stability of principal. While there is no
assurance that the Fund will achieve its investment objective, it endeavors to
do so by following the strategies and policies described in this prospectus.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The Fund invests only in a portfolio of U.S. Treasury securities maturing in 397
days or less. These investments include repurchase agreements collateralized
fully by U.S. Treasury securities. The dollar-weighted average maturity of the
Fund's portfolio will be 90 days or less.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
All mutual funds take investment risks. Therefore, even though the Fund is a
money market fund that seeks to maintain a stable net asset value, it is
possible to lose money by investing in the Fund. The Shares offered by this
prospectus are not deposits or obligations of any bank, are not endorsed or
guaranteed by any bank and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other government agency.
RISK/RETURN BAR CHART AND TABLE
[Graphic]
Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's total returns on a
calendar year-end basis.
The Fund's shares are not sold subject to a sales charge (load). The total
returns displayed above are based upon net asset value.
The Fund's total return for the six-month period from January 1, 1999 to June
30, 1999 was 2.19%.
Within the period shown in the Chart, the Fund's highest quarterly return was
2.29% (quarter ended June 30, 1989). Its lowest quarterly return was 0.68%
(quarter ended June 30, 1993).
AVERAGE ANNUAL TOTAL RETURN TABLE
The following table represents the Fund's Average Annual Total Returns for the
calendar periods ended December 31, 1998.
<TABLE>
<CAPTION>
CALENDAR PERIOD FUND
<S> <C>
1 Year 5.11%
5 Years 4.97%
10 Years 5.37%
</TABLE>
The Fund's 7-Day Net Yield as of December 31, 1998 was 4.49%. Investors may call
the Fund at 1-800-341-7400 to acquire the current 7-Day Net Yield.
Past performance does not necessarily predict future performance. This
information provides you with historical performance information so that you can
analyze whether the Fund's investment risks are balanced by its potential
returns.
What are the Fund's Fees and Expenses?
TRUST FOR U.S. TREASURY OBLIGATIONS
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES
<S> <C>
Fees Paid Directly From
Your Investment
Maximum Sales Charge
(Load) Imposed on
Purchases (as a percentage
of offering price) None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption proceeds,
as applicable) None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends (and
other Distributions) (as a
percentage of
offering price) None
Redemption Fee (as a
percentage of amount
redeemed, if applicable) None
Exchange Fee None
ANNUAL FUND OPERATING EXPENSES Expenses That are Deducted From Fund Assets (as a
percentage of average net assets)
Management Fee 1 0.40%
Distribution (12b-1) Fee None
Shareholder Services Fee 1 0.25%
Other Expenses 0.10%
Total Annual Fund
Operating Expenses 0.75%
Total Waiver of Fund
Expenses 0.30%
Total Actual Annual
Operating Expenses (after
waivers) 0.45%
1 Pursuant to the investment advisory contract, portions of the Management Fee and
the Shareholder Services Fee were waived. After these waivers, for the fiscal
year ended July 31, 1999, the Management Fee paid by the Fund was 0.30% and the
Shareholder Services Fee was 0.05%. Shareholders must approve any change to the
advisory contract's waiver provision.
</TABLE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's maximum allowable operating expenses as shown in the table remain the
same. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
<TABLE>
<S> <C>
1 Year $ 46
3 Years $ 144
5 Years $ 252
10 Years $ 567
</TABLE>
What are the Fund's Investment Strategies?
The Fund invests only in a portfolio of U.S. Treasury securities maturing in 397
days or less. These investments include repurchase agreements collateralized
fully by U.S. Treasury securities. The dollar-weighted average maturity of the
Fund's portfolio will be 90 days or less.
The Adviser targets a dollar-weighted average portfolio maturity range based
upon its interest rate outlook. The Adviser formulates its interest rate outlook
by analyzing a variety of factors, such as:
* current U.S. economic activity and the economic outlook;
* current short-term interest rates;
* The Federal Reserve Board's policies regarding short-term interest
rates; and
* the potential effects of foreign economic activity on U.S. short-term
interest rates.
The Adviser generally shortens the portfolio's average maturity when it expects
interest rates to rise and extends the maturity when it expects interest rates
to fall. The Adviser selects securities used to shorten or extend the
portfolio's dollar-weighted average maturity by comparing the returns currently
offered by different investments to their historical and expected returns.
What are the Principal Securities in Which the Fund Invests?
U.S. TREASURY SECURITIES
U.S. Treasury securities are direct obligations of the federal government
of the United States. U.S. Treasury securities pay interest, dividends or
distributions at a specified rate. The rate may be a fixed percentage of
the principal or adjusted periodically. The U.S. Treasury must repay the
principal amount of the security, normally within a specified time.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser. Repurchase agreements are subject
to credit risks.
What are the Specific Risks of Investing in the Fund?
INTEREST RATE RISKS
Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain the same.
Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.
CREDIT RISKS
Credit risk includes the possibility that a party to a transaction involving the
Fund will fail to meet its obligations. This could cause the Fund to lose the
benefit of the transaction or prevent the Fund from selling or buying other
securities to implement its investment strategy.
What Do Shares Cost?
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is
open. The Fund attempts to stabilize the net asset value (NAV) of its Shares at
$1.00 by valuing the portfolio securities using the amortized cost method. The
Fund cannot guarantee that its NAV will always remain at $1.00 per Share. The
Fund does not charge a front-end sales charge. NAV is determined at 12:00 noon
and 3:00 p.m. (Eastern time), and as of the close of trading (normally 4:00
p.m., Eastern time) each day the NYSE is open.
The required minimum initial investment for Fund Shares is $25,000. There is no
required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $25,000 minimum is
reached within 90 days. An institutional investor's minimum investment is
calculated by combining all accounts it maintains with the Fund. Accounts
established through investment professionals may be subject to a smaller minimum
investment amount. Keep in mind that investment professionals may charge you
fees for their services in connection with your Share transactions.
How is the Fund Sold?
The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to banks, fiduciaries, custodians of public funds, or similar
institutional investors, and individuals, directly or through investment
professionals.
The Distributor and its affiliates may pay out of their assets other
amounts (including items of material value) to investment professionals
for marketing and servicing Shares. The Distributor is a subsidiary of
Federated Investors, Inc. (Federated).
How to Purchase Shares
You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.
THROUGH AN INVESTMENT PROFESSIONAL
* Establish an account with the investment professional; and
* Submit your purchase order to the investment professional before 3:00 p.m.
(Eastern time). You will receive that day's dividend if the investment
professional forwards the order to the Fund and the Fund receives payment by
3:00 p.m. (Eastern time). You will become the owner of Shares and receive
dividends when the Fund receives your payment.
Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."
DIRECTLY FROM THE FUND
* Establish your account with the Fund by submitting a completed New
Account Form; and
* Send your payment to the Fund by Federal Reserve wire or check.
You will become the owner of Shares after the Fund receives your wire or your
check. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees the Fund or its transfer agent incurs.
An institution may establish an account and place an order by calling the Fund
and you will become a shareholder after the Fund receives the order.
BY WIRE
Send your wire to:
State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
You cannot purchase Shares by wire on holidays when wire transfers are
restricted.
BY CHECK
Make your check payable to THE FEDERATED FUNDS, note your account number on the
check, and mail it to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE that
requires a street address, mail it to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third-party checks (checks originally payable to someone other than
you or The Federated Funds). Orders by mail are considered received when payment
by check is converted into federal funds (normally the business day after the
check is received) and Shares begin earning dividends the next day.
BY AUTOMATIC INVESTMENTS
You may establish an account with your financial institution to automatically
purchase Shares on pre-determined dates or when your bank account reaches a
certain level. Under this program, participating financial institutions are
responsible for prompt transmission of orders and may charge you for this
service. You should read this prospectus along with your financial institution's
agreement or materials describing this service.
BY AUTOMATED CLEARING HOUSE (ACH)
Once you have opened an account, you may purchase additional Shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the approriate sections of the New Account Form.
How to Redeem Shares
You should redeem Shares:
* through an investment professional if you purchased Shares through an
investment professional; or
* directly from the Fund if you purchased Shares directly from the Fund.
THROUGH AN INVESTMENT PROFESSIONAL
Submit your redemption request to your investment professional by the end of
regular trading on the NYSE (normally 4:00 p.m. Eastern time). Investment
professionals are responsible for promptly submitting redemption requests and
providing proper written redemption instructions as outlined below.
DIRECTLY FROM THE FUND
BY TELEPHONE
You may redeem Shares by calling the Fund at 1-800-341-7400 once you have
completed the appropriate authorization form for telephone transactions.
If you call before 3:00 p.m. (Eastern time), your redemption will be wired to
you the same day. You will not receive that day's dividend.
If you call after 3:00 p.m. (Eastern time), your redemption will be wired to you
the following business day. You will receive that day's dividend.
BY MAIL
You may redeem Shares by mailing a written request to the Fund.
Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.
Send requests by mail to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
All requests must include:
* Fund name and share class, account number and account registration;
* amount to be redeemed; and
* signatures of all shareholders exactly as registered.
Call your investment professional or the Fund if you need special instructions.
SIGNATURE GUARANTEES
Signatures must be guaranteed if:
* your redemption will be sent to an address other than the address of
record;
* your redemption will be sent to an address of record that was changed
within the last 30 days; or
* a redemption is payable to someone other than the shareholder(s) of
record.
A signature guarantee is designed to protect your account from fraud. Obtain a
signature guarantee from a bank or trust company, savings association, credit
union or broker, dealer, or securities exchange member. A NOTARY PUBLIC CANNOT
PROVIDE A SIGNATURE GUARANTEE.
PAYMENT METHODS FOR REDEMPTIONS
Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form or an Account Service Options Form. These payment
options require a signature guarantee if they were not established when the
account was opened:
* an electronic transfer to your account at a financial institution that is
an ACH member; or
* wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.
REDEMPTION IN KIND
Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.
LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:
* to allow your purchase to clear;
* during periods of market volatility; or
* when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.
You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.
REDEMPTIONS FROM RETIREMENT ACCOUNTS
In the absence of your specific instructions, 10% of the value of your
redemption from a retirement account in one Fund may be withheld for taxes. This
withholding only applies to certain types of retirement accounts.
ADDITIONAL CONDITIONS
TELEPHONE TRANSACTIONS
The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
SHARE CERTIFICATES
The Fund no longer issues share certificates. If you are redeeming Shares
represented by certificates previously issued by the Fund, you must return the
certificates with your written redemption request. For your protection, send
your certificates by registered or certified mail, but do not endorse them.
Account and Share Information
ACCOUNT ACTIVITY
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.
DIVIDENDS AND CAPITAL GAINS
The Fund declares any dividends daily and pays them monthly to shareholders. If
you purchase Shares by wire, you begin earning dividends on the day your wire is
received. If you purchase Shares by check, you begin earning dividends on the
business day after the Fund receives your check. In either case, you earn
dividends through the day your redemption request is received.
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund pays any capital gains at least annually. Your dividends and
capital gains distributions will be automatically reinvested in additional
Shares without a sales charge, unless you elect cash payments.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, non- retirement
accounts may be closed if redemptions cause the account balance to fall below
the minimum initial investment amount. Before an account is closed, you will be
notified and allowed 30 days to purchase additional Shares to meet the minimum.
TAX INFORMATION
The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets
Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state and
local tax liability.
Who Manages the Fund?
The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, Federated Investment Management Company. The Adviser manages the Fund's
assets, including buying and selling portfolio securities. The Adviser's address
is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.
The Adviser and other subsidiaries of Federated advise approximately 175 mutual
funds and separate accounts, which totaled approximately $111 billion in assets
as of December 31, 1998. Federated was established in 1955 and is one of the
largest mutual fund investment managers in the United States with approximately
1,900 employees. More than 4,000 investment professionals make Federated Funds
available to their customers.
ADVISORY FEES
The Adviser receives an annual investment advisory fee of 0.40% of the Fund's
average daily net assets Under the investment advisory contract, which is
subject to annual review by the Fund's Trustees, the Adviser will waive the
amount, limited to the amount of the advisory fee, by which the Fund's aggregate
annual operating expenses, including the investment advisory fee but excluding
interest, taxes, brokerage commissions, expenses of registering or qualifying
the fund and its Shares under federal and state laws and regulations, expenses
of withholding taxes, and extraordinary expenses, exceed 0.45% of its average
daily net assets.
YEAR 2000 READINESS
The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999 or may experience other date-related problems. The Year 2000 problem may
cause systems to process information incorrectly and could disrupt businesses,
such as the Fund, that rely on computers.
While it is impossible to determine in advance all of the risks to the Fund, the
Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.
The Fund's service providers are making changes to their computer systems to fix
any Year 2000 problems. In addition, they are working to gather information from
third-party providers to determine their Year 2000 readiness.
Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Fund
may purchase. The financial impact of these issues for the Fund is still being
determined. There can be no assurance that potential Year 2000 problems would
not have a material adverse effect on the Fund.
Last Meeting of Shareholders
A Special Meeting of the Fund's shareholders was held on March 22, 1999. On
January 21, 1999, the record date for the shareholders voting at the meeting,
there were 1,663,472,194 total outstanding shares. The following items were
considered by shareholders and the results were as follows:
AGENDA ITEM 1
Elected Trustees: 1
<TABLE>
<CAPTION>
WITHHELD
AUTHORITY
NAMES FOR TO VOTE
<S> <C> <C>
Thomas G Bigley 864,767,307 596,845
John T. Conroy, Jr. 864,767,307 596,845
John F. Cunningham 864,864,454 499,698
Peter E. Madden 864,864,454 499,698
Charles F. Mansfield, Jr. 864,864,454 499,698
John E. Murray, Jr., J.D., S.J.D. 864,864,454 499,698
John S. Walsh 864,864,454 499,698
</TABLE>
1 The following Trustees continued their terms: John F. Donahue, Nicholas
P. Constantakis, J. Christopher Donahue, Lawrence D. Ellis, M.D., and
Marjorie P. Smuts.
AGENDA ITEM 2
Ratified the selection of Arthur Andersen LLP as the Fund's independent
auditors:
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
864,728,478 59 635,614
</TABLE>
AGENDA ITEM 3
Made changes to the Fund's fundamental investment policies:
(a) Approved making non-fundamental, and amending, the Fund's fundamental
investment policy regarding maturity of money market instruments.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
838,837,129 24,460,753 2,066,269
</TABLE>
(b) Approved amending in the Fund's fundamental investment policy regarding
borrowing to permit the purchase of securities while borrowing are outstanding.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
809,295,084 52,498,092 3,570,975
</TABLE>
(c) Approved amending the Fund's fundamental investment policy regarding
pledging securities to permit the Fund to pledge assets to secure permitted
borrowings.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
824,498,376 37,288,226 3,577,549
</TABLE>
AGENDA ITEM 4
Approved eliminating the Fund's fundamental investment policy regarding the
average maturity of securities in the Fund's portfolio:
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
838,533,522 20,410,463 6,420,165
</TABLE>
AGENDA ITEM 5
Approved a clarifying amendment to the Fund's Investment Advisory Agreement to
exclude Rule 12b-1 fees and shareholder service fees from the expense cap:
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
836,603,452 26,553,196 2,207,503
</TABLE>
AGENDA ITEM 6
Approved an amendment and restatement to the Fund's Declaration of Trust to
require the approval by a "1940 Act" majority of shareholders in the event of
the sale or conveyance of the assets of the Fund to another trust or
corporation:
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
842,675,160 20,557,387 2,131,604
</TABLE>
AGENDA ITEM 7
Approved a proposed Agreement and Plan of Reorganization between Trust for U.S.
Treasury Obligations (the "Old Fund") and Money Market Obligations Trust, on
behalf of its series, Trust for U.S. Treasury Obligations (the "Fund"), whereby
the Fund would acquire all of the assets of the Old Fund in exchange for shares
of the Fund to be distributed pro rata by the Old Fund to its shareholders
complete liquidation and termination of the Old Fund:
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
841,961,878 20,925,207 2,477,066
</TABLE>
Financial Information
FINANCIAL HIGHLIGHTS
The following Financial Highlights will help you understand the Fund's financial
performance from October 1, 1998 to July 31, 1999, the new fiscal year end, and
the past five fiscal years. Some of the information is presented on a per share
basis. Total returns represent the rate an investor would have earned (or lost)
on an investment in the Fund, assuming reinvestment of any dividends and capital
gains.
This information has been audited by Ernst & Young LLP, whose report, along with
the Fund's audited financial statements, is included in this prospectus.
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
PERIOD
ENDED
JULY 31, YEAR ENDED SEPTEMBER 30,
1999 1 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.04 0.05 0.05 0.05 0.05 0.03
LESS DISTRIBUTIONS:
Distributions from net investment income (0.04) (0.05) (0.05) (0.05) (0.05) (0.03)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 2 3.76% 5.28% 5.16% 5.18% 5.45% 3.31%
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.45% 3 0.45% 0.45% 0.45% 0.45% 0.45%
Net investment income 4.45% 3 5.17% 5.04% 5.06% 5.28% 3.21%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $1,465,381 $2,358,709 $1,797,163 $2,660,939 $3,031,247 $4,651,657
</TABLE>
1 The Fund has changed its fiscal year-end from September 30 to July 31.
2 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
3 Computed on an annualized basis.
See Notes which are an integral part of the Financial Statements
Portfolio of Investments
JULY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM U.S. GOVERNMENT
OBLIGATIONS--23.3%
U.S. TREASURY BILL--0.3%
$ 4,500,000 1 United States Treasury
Bill, 4.470%, 3/30/2000 $ 4,364,783
U.S. TREASURY NOTES--23.0%
336,000,000 United States Treasury
Notes, 5.375% - 7.750%,
8/31/1999 - 7/31/2000 337,148,993
TOTAL SHORT-TERM
U.S. GOVERNMENT
OBLIGATIONS 341,513,776
REPURCHASE AGREEMENTS--
76.4% 2
70,000,000 ABN AMRO Chicago Corp.,
5.070%, dated 7/30/1999,
due 8/2/1999 70,000,000
50,000,000 Bank of New York, New York,
5.070%, dated 7/30/1999,
due 8/2/1999 50,000,000
120,000,000 Barclays de Zoete Wedd
Securities, Inc., 5.080%,
dated 7/30/1999, due
8/2/1999 120,000,000
50,000,000 Bear, Stearns and Co.,
5.090%, dated 7/30/1999,
due 8/2/1999 50,000,000
70,000,000 CIBC Wood Gundy Securities
Corp., 5.060%, dated
7/30/1999, due 8/2/1999 70,000,000
15,000,000 3 Credit Suisse First
Boston, Inc., 4.830%,
dated 6/1/1999, due
8/30/1999 15,000,000
5,100,000 Deutsche Bank Government
Securities, Inc., 5.080%,
dated 7/30/1999,
due 8/2/1999 5,100,000
70,000,000 Donaldson, Lufkin and
Jenrette Securities Corp.,
5.060%, dated 7/30/1999,
due 8/2/1999 70,000,000
70,000,000 First Union Capital
Markets, 5.070%, dated
7/30/1999, due 8/2/1999 70,000,000
70,000,000 Goldman Sachs Group, LP,
5.060%, dated 7/30/1999,
due 8/2/1999 70,000,000
35,000,000 3 Merrill Lynch, Pierce,
Fenner, and Smith, 4.760%,
dated 5/12/1999, due
8/10/1999 35,000,000
15,000,000 3 Merrill Lynch Pierce,
Fenner, and Smith, 4.900%,
dated 5/28/1999, due
8/30/1999 15,000,000
60,000,000 3 Morgan Stanley Group,
Inc., 4.960%, dated
7/26/1999, due 8/25/1999 60,000,000
70,000,000 Paribas Corp., 5.080%,
dated 7/30/1999, due
8/2/1999 70,000,000
70,000,000 Salomon Smith Barney
Holdings, Inc., 5.080%,
dated 7/30/1999, due
8/2/1999 70,000,000
70,000,000 Societe Generale, New
York, 5.070%, dated
7/30/1999, due 8/2/1999 70,000,000
70,000,000 Toronto Dominion
Securities (USA), Inc.,
5.070%, dated 7/30/1999,
due 8/2/1999 70,000,000
70,000,000 Warburg Dillon Reed LLC,
5.080%, dated 7/30/1999,
due 8/2/1999 70,000,000
70,000,000 Westdeutsche Landesbank
Girozentrale, 5.070%,
dated 7/30/1999, due
8/2/1999 70,000,000
TOTAL REPURCHASE
AGREEMENTS 1,120,100,000
TOTAL INVESTMENTS (AT
AMORTIZED COST) 4 $ 1,461,613,776
</TABLE>
1 The issue shows the rate of discount at time of purchase.
2 The repurchase agreements are collateralized fully by U.S. Treasury
obligations based on market prices at the date of the portfolio.
3 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.
4 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($1,465,381,021) at July 31, 1999.
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
JULY 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments in repurchase
agreements $ 1,120,100,000
Investments in securities 341,513,776
Total investments in
securities, at amortized
cost and value $ 1,461,613,776
Cash 526,099
Income receivable 8,289,145
Receivable for shares sold 515,790
TOTAL ASSETS 1,470,944,810
LIABILITIES:
Payable for shares
redeemed 11,600
Income distribution
payable 5,068,475
Payable for advisory fee 387,724
Accrued expenses 95,990
TOTAL LIABILITIES 5,563,789
Net assets for
1,465,381,021 shares
outstanding $ 1,465,381,021
NET ASSET VALUE, OFFERING
PRICE AND REDEMPTION
PROCEEDS PER SHARE:
$1,465,381,021 /
1,465,381,021 shares
outstanding $1.00
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Operations
PERIOD ENDED JULY 31, 1999 1
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 73,386,400
EXPENSES:
Investment advisory fee $ 6,001,262
Administrative personnel
and services fee 1,131,238
Custodian fees 122,059
Transfer and dividend
disbursing agent fees and
expenses 12,486
Trustees' fees 19,425
Auditing fees 13,135
Legal fees 15,354
Portfolio accounting fees 117,604
Shareholder services fee 3,750,789
Share registration costs 19,443
Printing and postage 63,279
Insurance premiums 5,851
Miscellaneous 22,600
TOTAL EXPENSES 11,294,525
WAIVERS:
Waiver of investment
advisory fee $ (1,523,031)
Waiver of shareholder
services fee (3,000,631)
TOTAL WAIVERS (4,523,662)
Net expenses 6,770,863
Net investment income $ 66,615,537
</TABLE>
1 The Fund has changed its fiscal year-end from September 30 to July 31.
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
PERIOD
ENDED
JULY 31, YEAR ENDED SEPTEMBER 30,
1999 1 1998 1997
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 66,615,537 $ 98,226,845 $ 122,829,265
DISTRIBUTIONS TO
SHAREHOLDERS:
Distributions from net
investment income (66,615,537) (98,226,845) (122,829,265)
SHARE TRANSACTIONS:
Proceeds from sale of
shares 6,150,124,739 8,814,750,379 10,154,245,628
Net asset value of shares
issued to shareholders in
payment of distributions
declared 7,041,055 11,702,911 13,230,871
Cost of shares redeemed (7,050,493,479) (8,264,907,672) (11,031,251,972)
CHANGE IN NET ASSETS
RESULTING FROM
SHARE TRANSACTIONS (893,327,685) 561,545,618 (863,775,473)
Change in net assets (893,327,685) 561,545,618 (863,775,473)
NET ASSETS:
Beginning of period 2,358,708,706 1,797,163,088 2,660,938,561
End of period $ 1,465,381,021 $ 2,358,708,706 $ 1,797,163,088
</TABLE>
1 The Fund has changed its fiscal year-end from September 30 to July 31.
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
JULY 31, 1999
ORGANIZATION
Money Market Obligations Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a open-end, management
investment company. The Trust consists of 14 portfolios. The financial
statements included herein are only those of the Trust for U.S. Treasury
Obligations (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.
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 provision for federal tax is
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.
CHANGE IN FISCAL YEAR
The Fund has changed its fiscal year-end from September 30 to July 31.
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). At July
31, 1999, capital paid-in aggregated $1,465,381,021. Transactions in shares were
as follows:
<TABLE>
<CAPTION>
PERIOD
ENDED
JULY 31, YEAR ENDED SEPTEMBER 30,
1999 1 1998 1997
<S> <C> <C> <C>
Shares sold 6,150,124,739 8,814,750,379 10,154,245,628
Shares issued to
shareholders in payment of
distributions declared 7,041,055 11,702,911 13,230,871
Shares redeemed (7,050,493,479 (8,264,907,672) (11,031,251,972)
NET CHANGE RESULTING FROM
SHARE TRANSACTIONS (893,327,685) 561,545,618 (863,775,473)
</TABLE>
1 The Fund has changed its fiscal year-end from September 30 to July 31.
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE
Federated Investment Management Company, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
0.40% of the Fund's average daily net assets. The Adviser will waive to the
extent of its advisory fee, the amount, if any, by which the Fund's aggregate
annual operating expenses, exceed 0.45% of its average daily net assets of the
Fund.
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, Inc. 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 Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily
net assets of the Fund for the period. The fee paid to FSSC is used to finance
certain services for shareholders and to maintain shareholder accounts. FSSC may
voluntarily choose to waive any portion of its fee. FSSC 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 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.
YEAR 2000 (UNAUDITED)
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
CHANGE OF INDEPENDENT AUDITORS
On May 19, 1999, the Fund's Board of Trustees, upon the recommendation of the
Audit Committee of the Board of Trustees, requested and subsequently accepted
the resignation of Arthur Anderson LLP ("AA") as the Fund's independent
auditors. AA's reports on the Fund's financial statements for the fiscal years
ended September 30, 1997 and September 30, 1998, contained no adverse opinion or
disclaimer of opinion nor were they qualified or modified as to uncertainty,
audit scope or accounting principles. During the Fund's fiscal years ended
September 30, 1997 and September 30, 1998, (i) there were no disagreements with
AA on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of AA, would have caused it to make reference to the subject
matter of the disagreements in connection with its reports on the financial
statements for such years; and (ii) there were no reportable events of the kind
described in Item 304(a)(1)(v) of Regulation S-K under the Securities Act of
1934, as amended.
The Fund, by action of its Trustees, upon the recommendation of the Audit
Committee of the Board, has engaged Ernst & Young LLP ("E&Y") as the independent
auditors to audit the Fund's financial statements for the fiscal year ending
July 31, 1999. During the Fund's fiscal years ended September 30, 1997 and
September 30, 1998, neither the Fund nor anyone on its behalf has consulted E&Y
on items which (i) concerned the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Fund's financial statements of (ii)
concerned the subject of a disagreement (as defined in paragraph (a)(1)(iv) of
Item 304 of Regulation S-K) of reportable events (as described in paragraph
(a)(1)(v) of said Item 304).
Report of Ernst & Young LLP, Independent Auditors
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
MONEY MARKET OBLIGATIONS TRUST:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments of the Trust for U.S. Treasury Obligations (one of
the portfolios constituting Money Market Obligations Trust) as of July 31, 1999,
and the related statement of operations, the statement of changes in net assets,
and the financial highlights for the period from October 1, 1998 to July 31,
1999. These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The statement
of operations for the year ended September 30, 1998, statement of changes in net
assets for each of the two years in the period ended September 30, 1998 and the
financial highlights for each of the five years in the period then ended were
audited by other auditors whose report dated November 20, 1998, expressed an
unqualified opinion on those statements and financial highlights.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements and
financial highlights. Our procedures included confirmation of securities owned
as of July 31, 1999, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Trust for U.S. Treasury Obligations of the Money Market Obligations Trust at
July 31, 1999, and the results of its operations, changes in its net assets and
financial highlights for the period from October 1, 1998 to July 31, 1999, in
conformity with generally accepted accounting principles.
[Graphic]
Boston, Massachusetts
September 17, 1999
[Graphic]
Federated
World-Class Investment Manager
PROSPECTUS
Trust for U.S. Treasury Obligations
A Portfolio of Money Market Obligations Trust
SEPTEMBER 30, 1999
A Statement of Additional Information (SAI), dated September 30, 1999, is
incorporated by reference into this prospectus. Additional information about the
Fund and its investments is contained in the Fund's SAI and SemiAnnual Report to
shareholders as they become available. To obtain the SAI, Semi-Annual Report and
other information without charge, and make inquiries, call your investment
professional or the Fund at 1-800-341- 7400.
You can obtain information about the Fund (including the SAI) by writing or
visiting the Public Reference Room in Washington, DC. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by mail at [email protected] or by writing to the SEC's Public Reference
Section, Washington, DC 2054-0102. Call 1-202-942-8090 for information on the
Public Reference Room's operations and copying fees.
[Graphic]
Federated
Trust for U.S. Treasury Obligations
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N799
8110114A (9/99)
[Graphic]
STATEMENT OF ADDITIONAL INFORMATION
Automated Cash Management Trust
A Portfolio of Money Market Obligations Trust
CASH II SHARES
INSTITUTIONAL SERVICE SHARES
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectuses for Cash II Shares and Institutional
Service Shares (Fund), dated September 30, 1999.
Obtain the prospectus without charge by calling 1-800-341-7400.
SEPTEMBER 30, 1999
[Graphic]
Federated
World-Class Investment Manager
Automated Cash Management Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
G00554-02 (9/99)
[Graphic]
CONTENTS
How is the Fund Organized? 1
Securities in Which the Fund Invests 1
How is the Fund Sold? 6
Subaccounting Services 7
Redemption in Kind 7
Massachusetts Partnership Law 7
Account and Share Information 7
Tax Information 7
Who Manages and Provides Services to the Fund? 8
How Does the Fund Measure Performance? 11
Who is Federated Investors, Inc.? 12
Addresses 14
How is the Fund Organized?
The Fund is a diversified portfolio of Money Market Obligations Trust (Trust).
The Trust is an open-end, management investment company that was established
under the laws of the Commonwealth of Massachusetts on October 3, 1988. The
Trust may offer separate series of shares representing interests in separate
portfolios of securities.
The Board of Trustees (the Board) has established two classes of shares of the
Fund, known as Cash II Shares and Institutional Service Shares (Shares). This
SAI relates to both classes of Shares. The Funds' investment adviser is
Federated Investment Management Company (Adviser). Effective March 31, 1999,
Federated Management, former Adviser to the Fund, became Federated Investment
Management Company (formerly, Federated Advisers).
Securities in Which the Fund Invests
The Fund's principal securities are described in its prospectus. Additional
securities, and further information regarding the principal securities, are
outlined below. In pursuing its investment strategy, the Fund may invest in such
securities for any purpose that is consistent with its investment objective.
SECURITIES DESCRIPTIONS AND TECHNIQUES
FIXED INCOME SECURITIES
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.
A security's yield measures the annual income earned on a security as a
percentage of its price. A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount. If the issuer may redeem the security before its scheduled maturity, the
price and yield on a discount or premium security may change based upon the
probability of an early redemption. Securities with higher risks generally have
higher yields.
The following describes the types of fixed income securities in which the Fund
invests.
U.S. TREASURY SECURITIES
U.S. Treasury securities are direct obligations of the federal government
of the United States. U.S. Treasury securities are generally regarded as
having the lowest credit risks.
AGENCY SECURITIES
Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a GSE). The United
States supports some GSEs with its full faith and credit. Other GSEs receive
support through federal subsidies, loans or other benefits. A few GSEs have no
explicit financial support, but are regarded as having implied support because
the federal government sponsors their activities. Agency securities are
generally regarded as having low credit risks, but not as low as treasury
securities.
CORPORATE DEBT SECURITIES
Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. The Fund may also purchase interests in bank loans to
companies. The credit risks of corporate debt securities vary widely among
issuers.
COMMERCIAL PAPER
Commercial paper is an issuer's obligation with a maturity of less than nine
months. Companies typically issue commercial paper to pay for current
expenditures. Most issuers constantly reissue their commercial paper and use the
proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue
to obtain liquidity in this fashion, its commercial paper may default.
Commercial paper investments will be limited to commercial paper rate A-1 by
Standard & Poor's Corporation, Prime-1 by Moody's investors Services, Inc., or
F-1 by Fitch Investors Service, and unrated but of comparable quality, including
Canadian Commercial Paper ("CCPs") and Europaper."
DEMAND INSTRUMENTS
Demand instruments are corporate debt securities that the issuer must repay upon
demand. Other demand instruments require a third party, such as a dealer or
bank, to repurchase the security for its face value upon demand. The Fund treats
demand instruments as short-term securities, even though their stated maturity
may extend beyond one year.
MUNICIPAL SECURITIES
Municipal securities are issued by states, counties, cities and other political
subdivisions and authorities. Although many municipal securities are exempt from
federal income tax, the Fund may invest in taxable municipal securities.
ASSET BACKED SECURITIES
Asset backed securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial debts
with maturities of less than ten years. However, almost any type of fixed income
assets (including other fixed income securities) may be used to create an asset
backed security. Asset backed securities may take the form of commercial paper,
notes, or pass through certificates. Asset backed securities may have prepayment
risks.
ZERO COUPON SECURITIES
Zero coupon securities do not pay interest or principal until final maturity
unlike debt securities that provide periodic payments of interest (referred to
as a coupon payment). Investors buy zero coupon securities at a price below the
amount payable at maturity. The difference between the purchase price and the
amount paid at maturity represents interest on the zero coupon security.
Investors must wait until maturity to receive interest and principal, which
increases the market and credit risks of a zero coupon security.
BANK INSTRUMENTS
Bank instruments are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit
and banker's acceptances. Yankee instruments are denominated in
U.S. dollars and issued by U.S. branches of foreign banks. Eurodollar
instruments are denominated in U.S. dollars and issued by non-
U.S. branches of U.S. or foreign banks.
The Fund will not invest in instruments of domestic and foreign banks and
savings and loans unless they have capital, surplus, and undivided profits of
over $100,000,000, or if the principal amount of the instrument is insured by
the Bank Insurance Fund which is administered by the Federal Deposit Insurance
Corporation or the Savings Association Insurance Fund which is administered by
the FDIC. These instruments may include Eurodollar Certificates of Deposit,
Yankee Certificates of Deposit, and Eurodollar Time Deposits.
INSURANCE CONTRACTS
Insurance contracts include guaranteed investment contracts, funding agreements
and annuities. The Fund treats these contracts as fixed income securities.
CREDIT ENHANCEMENT
Common types of credit enhancement include guarantees, letters of credit, bond
insurance and surety bonds. Credit enhancement also includes arrangements where
securities or other liquid assets secure payment of a fixed income security. If
a default occurs, these assets may be sold and the proceeds paid to security's
holders. Either form of credit enhancement reduces credit risks by providing
another source of payment for a fixed income security.
FOREIGN SECURITIES
Foreign securities are securities of issuers based outside the United States.
The Fund considers an issuer to be based outside the United States if:
* it is organized under the laws of, or has a principal office located in,
another country;
* the principal trading market for its securities is in another country; or
* it (or its subsidiaries) derived in its most current fiscal year at least 50%
of its total assets, capitalization, gross revenue or profit from goods
produced, services performed, or sales made in another country.
Along with the risks normally associated with domestic securities of the same
type, foreign securities are subject to risks of foreign investing.
SPECIAL TRANSACTIONS
SECURITIES LENDING
The Fund may lend portfolio securities to borrowers that the Adviser deems
creditworthy. In return, the Fund receives cash or liquid securities from the
borrower as collateral. The borrower must furnish additional collateral if the
market value of the loaned securities increases. Also, the borrower must pay the
Fund the equivalent of any dividends or interest received on the loaned
securities.
The Fund will reinvest cash collateral in securities that qualify as an
acceptable investment for the Fund. However, the Fund must pay interest to the
borrower for the use of cash collateral.
Loans are subject to termination at the option of the Fund or the borrower. The
Fund will not have the right to vote on securities while they are on loan, but
it will terminate a loan in anticipation of any important vote. The Fund may pay
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash collateral to a securities
lending agent or broker.
Securities lending activities are subject to interest rate risks and credit
risks.
DELAYED DELIVERY TRANSACTIONS
Delayed delivery transactions, including when issued transactions, are
arrangements in which the Fund buys securities for a set price, with payment and
delivery of the securities scheduled for a future time. During the period
between purchase and settlement, no payment is made by the Fund to the issuer
and no interest accrues to the Fund. The Fund records the transaction when it
agrees to buy the securities and reflects their value in determining the price
of its shares. Settlement dates may be a month or more after entering into these
transactions so that the market values of the securities bought may vary from
the purchase prices. Therefore, delayed delivery transactions create interest
rate risks for the Fund. Delayed delivery transactions also involve credit risks
in the event of a counterparty default.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.
The Fund's custodian or subcustodian will take possession of the securities
subject to repurchase agreements. The Adviser or subcustodian will monitor the
value of the underlying security each day to ensure that the value of the
security always equals or exceeds the repurchase price.
Repurchase agreements are subject to credit risks.
REVERSE REPURCHASE AGREEMENTS
Reverse repurchase agreements are repurchase agreements in which the Fund is the
seller (rather than the buyer) of the securities, and agrees to repurchase them
at an agreed upon time and price. A reverse repurchase agreement may be viewed
as a type of borrowing by the Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because the Fund must repurchase the underlying security at a higher price,
regardless of the market value of the security at the time of repurchase.
ASSET COVERAGE
In order to secure its obligations in connection with special transactions, the
Fund will either own the underlying assets, enter into an offsetting transaction
or set aside readily marketable securities with a value that equals or exceeds
the Fund's obligations. Unless the Fund has other readily marketable assets to
set aside, it cannot trade assets used to secure such obligations without
entering into an offsetting transaction or terminating the special transaction.
This may cause the Fund to miss favorable trading opportunities or to realize
losses on special transactions.
SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund may invest its assets in securities of other investment companies as an
efficient means of carrying out its investment policies. It should be noted that
investment companies incur certain expenses, such as management fees, and,
therefore, any investment by the Fund in shares of other investment companies
may be subject to such duplicate expenses. At the present time, the Fund expects
that its investments in other investment companies will be limited to shares of
money market funds affiliated with the Fund's investment adviser.
INVESTMENT RATINGS
A nationally recognized rating service's two highest rating categories are
determined without regard for sub-categories and gradations. For example,
securities rated SP-1+, SP-1, or SP-2 by Standard & Poor's Ratings Group
("S&P"), MIG-1 or MIG-2 by Moody's Investors Service, Inc. ("Moody's"), or F-1+,
F-1, or F-2 by Fitch Investors Service, Inc. ("Fitch") are all considered rated
in one of the two highest short-term rating categories. The Fund will follow
applicable regulations in determining whether a security rated by more than one
rating service can be treated as being in one of the two highest short-term
rating categories; currently, such securities must be rated by two rating
services in one of their two highest rating categories. See "Regulatory
Compliance."
INVESTMENT RISKS
There are many factors which may affect an investment in the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below.
CREDIT RISKS
Fixed income securities generally compensate for greater credit risk by paying
interest at a higher rate. The difference between the yield of a security and
the yield of a U.S. Treasury security with a comparable maturity (the spread)
measures the additional interest paid for risk. Spreads may increase generally
in response to adverse economic or market conditions. A security's spread may
also increase if the security's rating is lowered, or the security is perceived
to have an increased credit risk. An increase in the spread will cause the price
of the security to decline.
LEVERAGE RISKS
Leverage risk is created when an investment exposes the Fund to a level of risk
that exceeds the amount invested. Changes in the value of such an investment
magnify the Fund's risk of loss and potential for gain.
RISKS OF FOREIGN INVESTING
Foreign securities pose additional risks because foreign economic or political
conditions may be less favorable than those of the United States. Securities in
foreign markets may also be subject to taxation policies that reduce returns for
U.S. investors.
PREPAYMENT RISKS
Unlike traditional fixed income securities, which pay a fixed rate of interest
until maturity (which the entire principal amount is due), payments on asset
backed securities include both interest and a partial payment of principal.
Partial payments of principal may be comprised of scheduled principal payments
as well as unscheduled payments from the from the voluntary prepayment,
refinancing, or foreclosure of the underlying loans. If the Fund receives
unscheduled prepayments, it may have to reinvest the proceeds in other fixed
income securities with lower interest rates, higher credit risks, or other less
favorable characteristics.
FUNDAMENT INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is stability of principal and current income
consistent with stability of principal. The Fund invests in high quality money
market instruments which include, but are not limited to, instruments of
domestic and foreign banks and savings and loans, commercial paper, marketable
obligations and repurchase agreements. The Fund invests only in instruments
dominated and payable in U.S. dollars. The Fund may invest in commercial paper
issued in reliance on the exemption from registration afforded by Section 4(2)
of the Securities Act of 1933. Section 4(2) paper is restricted as to
disposition under federal securities law and is generally sold to institutional
investors, such as the Fund, who agree that they are purchasing the paper for
investment purposes and not with a view to public distribution. Any resale by
the purchaser must be in an exempt transaction. Section 4(2) paper is normally
resold through or with the assistance of an issuer or investment dealers who
make a market in Section 4(2) paper, thus providing liquidity. Therefore, the
Fund's investment adviser considers the legally restricted but quite saleable
Section 4(2) paper to be liquid. The investment objective may not be changed by
the Fund's Trustees without shareholder approval.
INVESTMENT LIMITATIONS
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund may borrow money, directly or indirectly, and issue senior securities
to the maximum extent permitted under the 1940 Act.
LENDING CASH OR SECURITIES
The Fund may not make loans, provided that this restriction does not prevent the
Fund from purchasing debt obligations, entering into repurchase agreements,
lending its assets to broker/dealers or institutional investors and investing in
loans, including assignments and participation interests.
INVESTING REAL ESTATE
The Fund may not purchase or sell real estate, provided that this restriction
does not prevent the Fund from investing in issuers which invest, deal, or
otherwise engage in transactions in real estate or interests therein, or
investing in securities that are secured by real estate or interest therein. The
Fund may exercise its rights under agreements relating to such securities,
including the right to enforce security interests and to hold real estate
acquired by reason of such enforcement until that real estate can be liquidated
in an orderly manner.
INVESTING IN COMMODITIES
The Fund may not purchase or sell physical commodities, provided that the Fund
may purchase securities of companies that deal in commodities.
UNDERWRITING
The Fund may not underwrite the securities of other issuers, except that the
Fund may engage in transactions involving the acquisition, disposition or resale
of its portfolio securities, under circumstances where it may be considered to
be an underwriter under the Securities Act of 1933.
CONCENTRATION OF INVESTMENTS
The Fund will not make investments that will result in the concentration of its
investments in the securities of issuers primarily engaged in the same industry.
Government securities, municipal securities and bank instruments will not be
deemed to constitute an industry.
THE ABOVE LIMITATIONS CANNOT BE CHANGED UNLESS AUTHORIZED BY THE BOARD OF
TRUSTEES (BOARD) AND BY THE "VOTE OF A MAJORITY OF ITS OUTSTANDING VOTING
SECURITIES," AS DEFINED BY THE INVESTMENT COMPANY ACT OF 1940. THE FOLLOWING
LIMITATIONS, HOWEVER, MAY BE CHANGED BY THE BOARD WITHOUT SHAREHOLDER APPROVAL.
SHAREHOLDERS WILL BE NOTIFIED BEFORE ANY MATERIAL CHANGE IN THESE LIMITATIONS
BECOMES EFFECTIVE.
BUYING ON MARGIN
The Fund will not purchase securities on margin, provided that the Fund may
obtain short-term credits necessary for the clearance of purchases and sales of
securities.
INVESTING IN RESTRICTED AND ILLIQUID SECURITIES
The Fund may invest in restricted securities. Restricted securities are any
securities in which the Fund may invest pursuant to its investment objective and
policies but which are subject to restrictions on resale under federal
securities law. Under criteria established by the Trustees certain restricted
securities are determined to be liquid. To the extent that restricted securities
are not determined to be liquid the Fund will limit their purchase, together
with other illiquid securities, to 10% of its net assets.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any of its assets, provided
that this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.
In applying the concentration limitation, (1) utility companies will be divided
according to their services, for example, gas, gas, transmissions, electric and
telephone will each be considered a separate industry; (2) financial service
companies will be classified according to the end users of their services, for
example, automobile finance, bank finance and diversified finance will each be
considered a separate industry; and (3) asset-backed securities will be
classified according to the underlying assets securing such securities. To
conform to the current view of the Securities and Exchange Commission (SEC) that
only domestic bank instruments may be excluded from industry concentration
limitations, as a matter of nun-fundamental policy, the Fund will not exclude
foreign bank instruments from industry concentration limits as long as the
policy of the SEC remains in effect. As a non-fundamental operating policy, the
Fund will consider concentration to be the investment of more than 25% of the
value of its total assets in any one industry.
For purposes of the above limitations, the Fund considers certificates of
deposit and demand and time deposits issued by a U.S. branch of a domestic bank
or savings association having capital, surplus, and undivided profits in excess
of $100,000,000 at the time of investment to be "cash items." Except with
respect to borrowing money, if a percentage limitation is adhered to at the time
of investment, a later increase or decrease in percentage resulting from any
change in value or net assets will not result in a violation of such limitation.
The Fund did not borrow money or pledge securities in excess of 5% of the value
of its net assets during the last fiscal year and has no present intent to do so
during the coming fiscal year.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940. In particular, the Fund will comply
with the various requirements of Rule 2a-7 (the "Rule") which regulates money
market funds. The Fund will determine the effective maturity of its investments
according to the Rule. The Fund may change these operational policies to reflect
changes in the laws and regulations without the approval of its shareholders.
DETERMINING MARKET VALUE OF SECURITIES
The Board have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of the
Fund computed by dividing the annualized daily income on the Fund's portfolio by
the net asset value computed as above may tend to be higher than a similar
computation made by using a method of valuation based upon market prices and
estimates. In periods of rising interest rates, the opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in the Rule. Under the Rule,
the Board must establish procedures reasonably designed to stabilize the net
asset value per share, as computed for purposes of distribution and redemption,
at $1.00 per share, taking into account current market conditions and the Fund's
investment objective. The procedures include monitoring the relationship between
the amortized cost value per share and the net asset value per share based upon
available indications of market value. The Board will decide what, if any, steps
should be taken if there is a difference of more than 0.5 of 1% between the two
values. The Board will take any steps they consider appropriate (such as
redemption in kind or shortening the average portfolio maturity) to minimize any
material dilution or other unfair results arising from differences between the
two methods of determining net asset value.
How is the Fund Sold?
Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best-efforts basis.
RULE 12B-1 PLAN (CASH II SHARES)
As a compensation-type plan, the Rule 12b-1 Plan is designed to pay the
Distributor (who may then pay investment professionals such as banks,
broker/dealers, trust departments of banks, and registered investment advisers)
for marketing activities (such as advertising, printing and distributing
prospectuses, and providing incentives to investment professionals) to promote
sales of Shares so that overall Fund assets are maintained or increased. This
helps the Fund achieve economies of scale, reduce per share expenses, and
provide cash for orderly portfolio management and Share redemptions. In
addition, the Fund's service providers that receive asset-based fees also
benefit from stable or increasing Fund assets.
The Fund may compensate the Distributor more or less than its actual marketing
expenses. In no event will the Fund pay for any expenses of the Distributor that
exceed the maximum Rule 12b-1 Plan fee.
The maximum Rule 12b-1 Plan fee that can be paid in any one year may not be
sufficient to cover the marketing-related expenses the Distributor has incurred.
Therefore, it may take the Distributor a number of years to recoup these
expenses.
SHAREHOLDER SERVICES
The Fund may pay Federated Shareholder Services Company, a subsidiary of
Federated Investors, Inc. (Federated), for providing shareholder services and
maintaining shareholder accounts. Federated Shareholder Services Company may
select others to perform these services for their customers and may pay them
fees.
SUPPLEMENTAL PAYMENTS
Investment professionals may be paid fees out of the assets of the Distributor
and/or Federated Shareholder Services Company (but not out of Fund assets). The
Distributor and/or Federated Shareholder Services Company may be reimbursed by
the Adviser or its affiliates.
Investment professionals receive such fees for providing distribution-related or
shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Fund or other special
events at recreational-type facilities, or items of material value. These
payments will be based upon the amount of Shares the investment professional
sells or may sell and/or upon the type and nature of sales or marketing support
furnished by the investment professional.
Subaccounting Services
Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding Shares in a fiduciary, agency,
custodial or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services that may be related to the ownership of Shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.
Redemption in Kind
Although the Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Fund is obligated to pay Share redemptions to any one
shareholder in cash only up to the lesser of $250,000 or 1% of the net assets
represented by such Share class during any 90-day period.
Any Share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.
Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.
Massachusetts Partnership Law
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.
Account and Share Information
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote.
All Shares of the Trust have equal voting rights, except that in matters
affecting only a particular Fund or class, only Shares of that Fund or class are
entitled to vote.
Trustees may be removed by the Board or by shareholders at a special meeting. A
special meeting of shareholders will be called by the Board upon the written
request of shareholders who own at least 10% of the Trust's outstanding shares
of all series entitled to vote.
As of September 10, 1999, the following shareholders owned of record,
beneficially, or both, 5% or more of the Fund's outstanding Institutional
Service Shares: FBS Investment Services Inc., Minneapolis, MN owned
approximately 364,294,025 (19.32%) shares, Stephens, Inc., Little Rock, AR owned
approximately 133,036,193 (7.05%) shares, and Fiduciary Trust Company
International, New York, NY owned approximately 123,472,796 (6.54%) shares.
Shareholders owning 25% or more of outstanding Shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.
Tax Information
FEDERAL INCOME TAX
The Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by the
Trust's other portfolios will be separate from those realized by the Fund.
Who Manages and Provides Services to the Fund?
BOARD OF TRUSTEES
The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Trust,
principal occupations for the past five years and positions held prior to the
past five years, total compensation received as a Trustee from the Trust for its
most recent fiscal year, and the total compensation received from the Federated
Fund Complex for the most recent calendar year. The Trust is comprised of 14
funds and the Federated Fund Complex is comprised of 54 investment companies,
whose investment advisers are affiliated with the Fund's Adviser.
As of September 10, 1999, the Fund's Board and Officers as a group owned less
than 1% of the Fund's outstanding Shares.
<TABLE>
NAME TOTAL
BIRTH DATE AGGREGATE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST AND FUND COMPLEX
<S> <C> <C> <C>
JOHN F. DONAHUE*#+ Chief Executive Officer $0 $0 for the Trust and
Birth Date: July 28, 1924 and Director or Trustee of 54 other investment
Federated Investors Tower the Federated Fund companies in the
1001 Liberty Avenue Complex; Chairman and Fund Complex
Pittsburgh, PA Director, Federated
CHAIRMAN AND TRUSTEE Investors, Inc.; Chairman
and Trustee, Federated Investment
Management Company; Chairman and Director,
Federated Investment Counseling, and
Federated Global Investment Management
Corp.; Chairman, Passport Research, Ltd.
THOMAS G. BIGLEY Director or Trustee of $31,152.11 $113,860.22 for the
Birth Date: February 3, 1934 the Federated Fund Trust and 54 other
15 Old Timber Trail Complex; Director, Member investment companies
Pittsburgh, PA of Executive Committee, in the Fund Complex
TRUSTEE Children's Hospital of
Pittsburgh; Director,
Robroy Industries, Inc.
(coated steel conduits/
computer storage
equipment); formerly:
Senior Partner, Ernst &
Young LLP; Director, MED
3000 Group, Inc.
(physician practice
management); Director,
Member of Executive
Committee, University of
Pittsburgh.
JOHN T. CONROY, JR. Director or Trustee of the $35,704.20 $125,264.48 for the
Birth Date: June 23, 1937 Federated Fund Complex; Trust and 54 other
Wood/Commercial Dept. President, Investment investment companies
John R. Wood Associates, Inc Properties Corporation; in the Fund Complex
3255 Tamiami Trail North Senior Vice President,
Naples, FL John R. Wood and
TRUSTEE Associates, Inc.,
Realtors; Partner or
Trustee in private real
estate ventures in
Southwest Florida;
formerly: President,
Naples Property
Management, Inc. and
Northgate Village
Development Corporation.
JOHN F. CUNNINGHAM++ Director or Trustee of some $11,917.34 $0 for the Trust and
Birth Date: March 5, 1943 of the Federated Fund 46 other investment
353 El Brillo Way Complex; Chairman, companies in the
Palm Beach, FL President and Chief Fund Complex
TRUSTEE Executive Officer,
Cunningham & Co., Inc.
(strategic business
consulting); Trustee
Associate, Boston College;
Director, Iperia Corp.
(communications/
software); formerly:
Director, Redgate
Communications; Director,
EMC Corporation (computer
storage systems).
Previous Positions:
Chairman of the Board and
Chief Executive Officer,
Computer Consoles, Inc.;
President and Chief
Operating Officer, Wang
Laboratories; Director,
First National Bank of
Boston; Director, Apollo
Computer, Inc.
LAWRENCE D. ELLIS, M.D.* Director or Trustee of the $32,453.74 $113,860.22 for the
Birth Date: October 11, 1932 Federated Fund Complex; Trust and 54 other
3471 Fifth Avenue Professor of Medicine, investment companies
Suite 1111 University of Pittsburgh; in the Fund Complex
Pittsburgh, PA Medical Director,
TRUSTEE University of Pittsburgh
Medical Center - Downtown; Hematologist,
Oncologist, and Internist, University of
Pittsburgh Medical Center; Member, National
Board of Trustees, Leukemia Society of
America.
PETER E. MADDEN Director or Trustee of the $29,513.42 $113,860.22 for the
Birth Date: March 16, 1942 Federated Fund Complex; Trust and 54 other
One Royal Palm Way formerly: Representative, investment companies
100 Royal Palm Way Commonwealth of in the Fund Complex
Palm Beach, FL Massachusetts General
TRUSTEE Court; President, State
Street Bank and Trust
Company and State Street
Corporation.
Previous Positions:
Director, VISA USA and VISA
International; Chairman
and Director,
Massachusetts Bankers
Association; Director,
Depository Trust
Corporation; Director, The
Boston Stock Exchange.
CHARLES F. MANSFIELD, JR.++ Director or Trustee of some $11,917.34 $0 for the Trust and
Birth Date: April 10, 1945 of the Federated Fund 50 other investment
80 South Road Complex; companies in the
Westhampton Beach, NY Management Consultant. Fund Complex
TRUSTEE Previous Positions: Chief
Executive Officer, PBTC International Bank;
Partner, Arthur Young & Company (now Ernst
& Young LLP); Chief Financial Officer of
Retail Banking Sector, Chase Manhattan
Bank; Senior Vice President, Marine Midland
Bank; Vice President, Citibank; Assistant
Professor of Banking and Finance, Frank G.
Zarb School of Business, Hofstra
University.
<CAPTION>
NAME TOTAL
BIRTH DATE AGGREGATE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST AND FUND COMPLEX
<S> <C> <C> <C>
JOHN E. MURRAY, JR., J.D., S.J.D.# Director or Trustee of $29,822.54 $113,860.22 for the
Birth Date: December 20, 1932 the Federated Fund Trust and 54 other
President, Duquesne University Complex; President, Law investment companies
Pittsburgh, PA Professor, Duquesne in the Fund Complex
TRUSTEE University; Consulting
Partner, Mollica & Murray;
Director, Michael Baker
Corp. (engineering,
construction, operations,
and technical services).
Previous Positions: Dean
and Professor of Law,
University of Pittsburgh
School of Law; Dean and
Professor of Law,
Villanova University
School of Law.
MARJORIE P. SMUTS Director or Trustee of the $28,684.13 $113,860.22 for the
Birth Date: June 21, 1935 Federated Fund Complex; Trust and 54 other
4905 Bayard Street Public Relations/ investment companies
Pittsburgh, PA Marketing/Conference in the Fund Complex
TRUSTEE Planning.
Previous Positions:
National Spokesperson,
Aluminum Company of
America; television
producer; business owner.
JOHN S. WALSH++ Director or Trustee of some $9,836.75 $0 for the Trust and
Birth Date: November 28, 1957 of the Federated Fund 48 other investment
2007 Sherwood Drive Complex; President and companies in the
Valparaiso, IN Director, Heat Wagon, Inc. Fund Complex
TRUSTEE (manufacturer of
construction temporary
heaters); President and
Director, Manufacturers
Products, Inc.
(distributor of portable
construction heaters);
President, Portable Heater
Parts, a division of
Manufacturers Products,
Inc.; Director, Walsh &
Kelly, Inc. (heavy highway
contractor); formerly:
Vice President, Walsh &
Kelly, Inc.
J. CHRISTOPHER DONAHUE+ President or Executive $0 $0 for the Trust and
Birth Date: April 11, 1949 Vice President of the 16 other investment
Federated Investors Tower Federated Fund Complex; companies in the
1001 Liberty Avenue Director or Trustee of some Fund Complex
Pittsburgh, PA of the Funds in the
PRESIDENT Federated Fund Complex;
President, CEO and Director, Federated
Investors, Inc.; President and Trustee,
Federated Investment Management Company;
President and Trustee, Federated Investment
Counseling; President and Director
Federated Global Investment Management
Corp.; President, Passport Research, Ltd.;
Trustee, Federated Shareholder Services
Company; Director, Federated Services
Company.
EDWARD C. GONZALES Trustee or Director of some $0 $0 for the Trust and
Birth Date: October 22, 1930 of the Funds in the 1 other investment
Federated Investors Tower Federated Fund Complex; company in the
1001 Liberty Avenue President, Executive Vice Fund Complex
Pittsburgh, PA President and Treasurer of
EXECUTIVE VICE PRESIDENT some of the Funds in the
Federated Fund Complex; Vice Chairman,
Federated Investors, Inc.; Vice President,
Federated Investment Management Company and
Federated Investment Counseling, Federated
Global Investment Management Corp. and
Passport Research, Ltd.; Executive Vice
President and Director, Federated
Securities Corp.; Trustee, Federated
Shareholder Services Company.
JOHN W. MCGONIGLE Executive Vice President $0 $0 for the Trust and
Birth Date: October 26, 1938 and Secretary of the 54 other investment
Federated Investors Tower Federated Fund Complex; companies in the
1001 Liberty Avenue Executive Vice President, Fund Complex
Pittsburgh, PA Secretary, and Director,
EXECUTIVE VICE PRESIDENT Federated Investors, Inc.;
AND SECRETARY Trustee, Federated
Investment Management Company; Trustee,
Federated Investment Counseling and
Director, Federated Global Investment
Management Corp.; Director, Federated
Services Company; Director, Federated
Securities Corp.
RICHARD J. THOMAS Treasurer of the Federated $0 $0 for the Trust and
Birth Date: June 17, 1954 Fund Complex; Vice 54 other investment
Federated Investors Tower President - Funds companies in the
1001 Liberty Avenue Financial Services Fund Complex
Pittsburgh, PA Division, Federated
TREASURER Investors, Inc.; formerly:
various management
positions within Funds
Financial Services
Division of Federated
Investors, Inc.
RICHARD B. FISHER President or Vice $0 $0 for the Trust and
Birth Date: May 17, 1923 President of some of the 6 other investment
Federated Investors Tower Funds in the Federated Fund companies in the
1001 Liberty Avenue Complex; Director or Fund Complex
Pittsburgh, PA Trustee of some of the
VICE PRESIDENT Funds in the Federated Fund
Complex; Executive Vice
President, Federated
Investors, Inc.; Chairman
and Director, Federated
Securities Corp.
WILLIAM D. DAWSON, III Chief Investment Officer $0 $0 for the Trust and
Birth Date: March 3, 1949 of this Fund and various 41 other investment
Federated Investors Tower other Funds in the companies in the
1001 Liberty Avenue Federated Fund Complex; Fund Complex
Pittsburgh, PA Executive Vice President,
CHIEF INVESTMENT OFFICER Federated Investment
Counseling, Federated Global Investment
Management Corp., Federated Investment
Management Company and Passport Research,
Ltd.; Registered Representative, Federated
Securities Corp.; Portfolio Manager,
Federated Administrative Services; Vice
President, Federated Investors, Inc.;
formerly: Executive Vice President and
Senior Vice President, Federated Investment
Counseling Institutional Portfolio
Management Services Division; Senior Vice
President, Federated Investment Management
Company and Passport Research, Ltd.
<CAPTION>
NAME TOTAL
BIRTH DATE AGGREGATE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST AND FUND COMPLEX
<S> <C> <C> <C>
DEBORAH A. CUNNINGHAM Deborah A. Cunningham is $0 $0 for the Trust and
Birth Date: September 15, 1959 Vice President of the 6 other investment
Federated Investors Tower Trust. Ms. Cunningham companies in the
1001 Liberty Avenue joined Federated in 1981 Fund Complex
Pittsburgh, PA and has been a Senior
VICE PRESIDENT Portfolio Manager and a
Senior Vice President of
the Fund's Adviser since
1997. Ms. Cunningham
served as a Portfolio
Manager and a Vice
President of the Adviser
from 1993 until 1996.
Ms. Cunningham is a
Chartered Financial
Analyst and received her
M.S.B.A. in Finance from
Robert Morris College.
MARY JO OCHSON Mary Jo Ochson is Vice $0 $0 for the Trust and
Birth Date: September 12, 1953 President of the Trust. 7 other investment
Federated Investors Tower Ms. Ochson joined companies in the
1001 Liberty Avenue Federated Investors in Fund Complex
Pittsburgh, PA 1982 and has been a Senior
VICE PRESIDENT Portfolio Manager and a
Senior Vice President of the Fund's
investment adviser since 1996. From 1988
through 1995, Ms. Ochson served as a
Portfolio Manager and a Vice President of
the Fund's investment adviser. Ms.Ochson is
a Chartered Financial Analyst and received
her M.B.A. in Finance from the University
of Pittsburgh.
</TABLE>
* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940.
# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.
+ Mr. Donahue is the father of J. Christopher Donahue, President of the
Trust.
++ Messrs. Cunningham, Mansfield and Walsh became members of the Board of
Trustees/Directors on January 1, 1999. They did not earn any fees for
serving the Fund Complex since these fees are reported as of the end of
the last calendar year. They did not receive any fees as of the fiscal
year end of the Trust.
INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund.
The Adviser is a wholly owned subsidiary of Federated.
The Adviser shall not be liable to the Trust or any Fund shareholder for any
losses that may be sustained in the purchase, holding, or sale of any security
or for anything done or omitted by it, except acts or omissions involving
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties imposed upon it by its contract with the Trust.
OTHER RELATED SERVICES
Affiliates of the Adviser may, from time to time, provide certain electronic
equipment and software to institutional customers in order to facilitate the
purchase of Fund Shares offered by the Distributor.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. The Adviser will generally use those who are recognized dealers in
specific portfolio instruments, except when a better price and execution of the
order can be obtained elsewhere. In selecting among firms believed to meet these
criteria, the Adviser may give consideration to those firms which have sold or
are selling Shares of the Fund and other funds distributed by the Distributor
and its affiliates. The Adviser makes decisions on portfolio transactions and
selects brokers and dealers subject to review by the Fund's Board.
Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser. When the Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Fund and the account(s) in a
manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the Fund.
ADMINISTRATOR
Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Fund. Federated Services Company provides
these at the following annual rate of the average aggregate daily net assets of
all Federated Funds as specified below:
MAXIMUM AVERAGE AGGREGATE DAILY ADMINISTRATIVE FEE NET ASSETS OF THE FEDERATED
FUNDS 0.150 of 1% on the first $250 million 0.125 of 1% on the next $250 million
0.100 of 1% on the next $250 million 0.075 of 1% on assets in excess of $750
million
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of Shares.
Federated Services Company may voluntarily waive a portion of its fee and may
reimburse the Fund for expenses.
Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.
CUSTODIAN
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund. Foreign instruments purchased by the Fund are
held by foreign banks participating in a network coordinated by State Street
Bank.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Services Company, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Fund pays the transfer agent a fee based on the size, type and
number of accounts and transactions made by
shareholders.
INDEPENDENT AUDITORS
The independent auditor for the Fund, Arthur Andersen LLP, plans and performs
its audit so that it may provide an opinion as to whether the Fund's financial
statements and financial highlights are free of material misstatement.
FEES PAID BY THE FUND FOR SERVICES
<TABLE>
<CAPTION>
FOR THE YEAR ENDED SEPTEMBER 30, 1999 1998 1997
<S> <C> <C> <C>
Advisory Fee Earned $12,157,013 $11,464,630 $9,287,875
Advisory Fee Reduction 7,485,466 7,485,466 6,807,192
Administrative Fee 1,833,278 1,729,582 1,402,868
12B-1 FEE
Cash II Shares 1,170,753 - -
SHAREHOLDER SERVICES FEE
Cash II Shares 1,795,634 - -
Institutional Service Shares 4,162,951 - -
</TABLE>
Fees are allocated among classes based on their pro rata share of Fund assets,
except for marketing (Rule 12b-1) fees and shareholder services fees, which are
borne only by the applicable class of Shares.
How Does the Fund Measure Performance?
The Fund may advertise Share performance by using the SEC's standard method for
calculating performance applicable to all mutual funds. The SEC also permits
this standard performance information to be accompanied by non-standard
performance information.
The performance of Shares depends upon such variables as: portfolio quality;
average portfolio maturity; type and value of portfolio securities; changes in
interest rates; changes or differences in the Fund's or any class of Shares'
expenses; and various other factors.
Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.
AVERAGE ANNUAL TOTAL RETURNS AND YIELD
Total returns given for the one-year, five-year and ten-year periods ended July
31, 1999.
Yield and Effective Yield given for the 7-day period ended July 31, 1999.
<TABLE>
<CAPTION>
SHARE CLASS 7-DAY PERIOD 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
INSTITUTIONAL SERVICE SHARES
Total Return - 4.76% 5.12% 5.12%
Yield 4.62% - - -
Effective Yield 4.72% - - -
</TABLE>
<TABLE>
<CAPTION>
START OF PERFORMANCE
SHARE CLASS 7-DAY PERIOD 1 YEAR ON SEPTEMBER 27, 1996
<S> <C> <C> <C>
CASH II SHARES
Total Return N/A 4.58% 4.85%
Yield 4.45% N/A -
Effective Yield 4.54% N/A -
</TABLE>
TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.
The average annual total return for Shares is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of Shares owned at the end of the period by
the NAV per Share at the end of the period. The number of Shares owned at the
end of the period is based on the number of Shares purchased at the beginning of
the period with $1,000, less any applicable sales charge, adjusted over the
period by any additional Shares, assuming the annual reinvestment of all
dividends and distributions.
YIELD AND EFFECTIVE YIELD
The yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated by: determining
the net change in the value of a hypothetical account with a balance of one
Share at the beginning of the base period, with the net change excluding capital
changes but including the value of any additional Shares purchased with
dividends earned from the original one Share and all dividends declared on the
original and any purchased Shares; dividing the net change in the account's
value by the value of the account at the beginning of the base period to
determine the base period return; and multiplying the base period return by
365/7. The effective yield is calculated by compounding the unannualized
base-period return by: adding one to the base-period return, raising the sum to
the 365/7th power; and subtracting one from the result.
To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in Shares,
the Share performance is lower for shareholders paying those fees.
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
* references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;
* charts, graphs and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment;
* discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Fund; and
* information about the mutual fund industry from sources such as the Investment
Company Institute.
The Fund may compare its performance, or performance for the types of securities
in which it invests, to a variety of other investments, including federally
insured bank products such as bank savings accounts, certificates of deposit,
and Treasury bills.
The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.
You may use financial publications and/or indices to obtain a more complete view
of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Fund uses in advertising may include:
* LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories
based on total return, which assumes the reinvestment of all income
dividends and capital gains distributions, if any.
* IBC/DONOGHUE'S MONEY FUND REPORT publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publications reports monthly and
12-month-to-date investment results for the same money funds.
* MONEY, a monthly magazine, regularly ranks money market funds in vaious
categories based on the latest available seven-day effective yield.
* SALOMON 30-DAY CD INDEX compares rate levels of 30-day certificates of deposit
from the top ten prime representative banks.
Who is Federated Investors, Inc.?
Federated is dedicated to meeting investor needs by making structured,
straightforward and consistent investment decisions. Federated investment
products have a history of competitive performance and have gained the
confidence of thousands of financial institutions and individual investors.
Federated's disciplined investment selection process is rooted in sound
methodologies backed by fundamental and technical research. At Federated,
success in investment management does not depend solely on the skill of a single
portfolio manager. It is a fusion of individual talents and state- of-the-art
industry tools and resources. Federated's investment process involves teams of
portfolio managers and analysts, and investment decisions are executed by
traders who are dedicated to specific market sectors and who handle trillions of
dollars in annual trading volume.
FEDERATED FUNDS OVERVIEW
MUNICIPAL FUNDS
In the municipal sector, as of December 31, 1998, Federated managed 10 bond
funds with approximately $2.2 billion in assets and 23 money market funds with
approximately $12.5 billion in total assets. In 1976, Federated introduced one
of the first municipal bond mutual funds in the industry and is now one of the
largest institutional buyers of municipal securities. The Funds may quote
statistics from organizations including The Tax Foundation and the National
Taxpayers Union regarding the tax obligations of Americans.
EQUITY FUNDS
In the equity sector, Federated has more than 28 years' experience. As of
December 31, 1998, Federated managed 27 equity funds totaling approximately
$14.9 billion in assets across growth, value, equity income, international,
index and sector (i.e. utility) styles. Federated's value- oriented management
style combines quantitative and qualitative analysis and features a structured,
computer-assisted composite modeling system that was developed in the 1970s.
CORPORATE BOND FUNDS
In the corporate bond sector, as of December 31, 1998, Federated managed 9 money
market funds and 15 bond funds with assets approximating $22.8 billion and $7.1
billion, respectively. Federated's corporate bond decision making-based on
intensive, diligent credit analysis-is backed by over 26 years of experience in
the corporate bond sector. In 1972, Federated introduced one of the first
high-yield bond funds in the industry. In 1983, Federated was one of the first
fund managers to participate in the asset backed securities market, a market
totaling more than $209 billion.
GOVERNMENT FUNDS
In the government sector, as of December 31, 1998, Federated manages 9 mortgage
backed, 5 government/agency and 19 government money market mutual funds, with
assets approximating $5.3 billion, $1.8 billion and $41.6 billion, respectively.
Federated trades approximately $425 million in U.S. government and mortgage
backed securities daily and places approximately $25 billion in repurchase
agreements each day. Federated introduced the first U.S. government fund to
invest in U.S. government bond securities in 1969. Federated has been a major
force in the short- and intermediate-term government markets since 1982 and
currently manages approximately $43.2 billion in government funds within these
maturity ranges.
MONEY MARKET FUNDS
In the money market sector, Federated gained prominence in the mutual fund
industry in 1974 with the creation of the first institutional money market fund.
Simultaneously, the company pioneered the use of the amortized cost method of
accounting for valuing shares of money market funds, a principal means used by
money managers today to value money market fund shares. Other innovations
include the first institutional tax-free money market fund. As of December 31,
1998, Federated managed more than $76.7 billion in assets across 52 money market
funds, including 19 government, 9 prime and 23 municipal with assets
approximating $41.6 billion, $22.8 billion and $12.5 billion, respectively.
The Chief Investment Officers responsible for oversight of the various
investment sectors within Federated are: U.S. equity and high yield-
J. Thomas Madden; U.S. fixed income-William D. Dawson, III; and global
equities and fixed income-Henry A. Frantzen. The Chief Investment Officers
are Executive Vice Presidents of the Federated advisory companies.
MUTUAL FUND MARKET
Thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $5 trillion to the more than 7,300 funds available,
according to the Investment Company Institute.
FEDERATED CLIENTS OVERVIEW
Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:
INSTITUTIONAL CLIENTS
Federated meets the needs of approximately 900 institutional clients nationwide
by managing and servicing separate accounts and mutual funds for a variety of
purposes, including defined benefit and defined contribution programs, cash
management, and asset/liability management. Institutional clients include
corporations, pension funds, tax exempt entities, foundations/endowments,
insurance companies, and investment and financial advisers. The marketing effort
to these institutional clients is headed by John B. Fisher, President,
Institutional Sales Division, Federated Securities Corp.
BANK MARKETING
Other institutional clients include more than 1,600 banks and trust
organizations. Virtually all of the trust divisions of the top 100 bank holding
companies use Federated Funds in their clients' portfolios. The marketing effort
to trust clients is headed by Timothy C. Pillion, Senior Vice President, Bank
Marketing & Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated Funds are available to consumers through major brokerage firms
nationwide-we have over 2,200 broker/dealer and bank broker/dealer relationships
across the country-supported by more wholesalers than any other mutual fund
distributor. Federated's service to financial professionals and institutions has
earned it high ratings in several surveys performed by DALBAR, Inc. DALBAR is
recognized as the industry benchmark for service quality measurement. The
marketing effort to these firms is headed by James F. Getz, President,
Broker/Dealer Sales Division, Federated Securities Corp.
Addresses
AUTOMATED CASH MANAGEMENT TRUST
Institutional Service Shares
Cash II Shares
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
INVESTMENT ADVISER
Federated Investment Management Company
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
INDEPENDENT AUDITORS
Arthur Andersen LLP
225 Franklin Street
Boston, MA 02110-2812
AUTOMATED GOVERNMENT MONEY TRUST
A Portfolio of Money Market Obligations Trust
A money market mutual fund seeking stability of principal and current income
consistent with stability of principal by investing primarily in a portfolio of
U.S. Treasury securities maturing in 397 days or less.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
<PAGE>
September 30, 1999
<PAGE>
Contents
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the
Fund Invests? 4
What are the Specific Risks of Investing in the Fund? 5
What Do Shares Cost? 5
How is the Fund Sold? 5
How to Purchase Shares 5
How to Redeem Shares 6
Account and Share Information 8
Who Manages the Fund? 9
Last Meeting of Shareholders 10
Financial Information 11
Independent Auditors' Report 21
<PAGE>
RISK/RETURN SUMMARY
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund is a money market fund that seeks to maintain a stable net asset value
of $1.00 per share. The Fund's investment objective is stability of principal
and current income consistent with stability of principal. While there is no
assurance that the Fund will achieve its investment objective, it endeavors to
do so by following the strategies and policies described in this prospectus.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The Fund invests primarily in a portfolio of U.S. Treasury securities maturing
in 397 days or less. These investments include repurchase agreements
collateralized fully by U.S. Treasury securities. The dollar-weighted average
maturity of the Fund's portfolio will be 90 days or less.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
All mutual funds take investment risks. Therefore, even though the Fund is a
money market fund that seeks to maintain a stable net asset value, it is
possible to lose money by investing in the Fund. The Shares offered by this
prospectus are not deposits or obligations of any bank, are not endorsed or
guaranteed by any bank and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other government agency.
<PAGE>
Risk/Return Bar Chart and Table
Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's total returns on a
calendar year-end basis. The Fund's shares are not sold subject to a sales
charge (load). The total returns displayed above are based upon net asset value.
The Fund's total return for the six month period from January 1, 1999 to June
30, 1999 was 2.12%. Within the period shown in the Chart, the Fund's highest
quarterly return was 2.26% (quarter ended June 30, 1989). Its lowest quarterly
return was 0.66% (quarter ended June 30, 1993). Average Annual Total Return
Table The following table represents the Fund's Average Annual Total Returns,
for the calendar periods ending December 31, 1998. Calendar Period Fund 1 Year
4.96% 5 Years 4.83% 10 Years 5.25%
The Fund's 7-Day Net Yield as of December 31, 1998 was 4.36%. Investors may call
the Fund at 1-800-341-7400 to acquire the current 7-Day Net Yield. Past
performance does not necessarily predict future performance. This information
provides you with historical performance information so that you can analyze
whether the Fund's investment risks are balanced by its potential
returns.
<PAGE>
WHAT ARE THE FUND'S FEES AND EXPENSES?
AUTOMATED GOVERNMENT MONEY TRUST
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Fund. Shareholder Fees Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price) None Maximum Deferred Sales Charge (Load) (as a percentage of original
purchase price or redemption None proceeds, as applicable) Maximum Sales Charge
(Load) Imposed on Reinvested Dividends (and other Distributions) (as a None
percentage of offering price). Redemption Fee (as a percentage of amount
redeemed, if applicable) None Exchange Fee None
Annual Fund Operating Expenses (Before Waivers)1 Expenses That are Deducted From
Fund Assets (as a percentage of average net assets) Management Fee2 0.50%
Distribution (12b-1) Fee None Shareholder Services Fee3 0.25% Other Expenses
0.10% Total Annual Fund Operating Expenses 0.85% 1Although not contractually
obligated to do so, the Adviser and Shareholder Services Provider waived
certain amounts. These are shown below along with the net expenses the Fund
actually paid for the fiscal year ended July31, 1999.
Total Waivers of Fund Expenses 0.26% Total Actual Annual Operating Expenses
(after waivers) 0.59% 2The Adviser voluntarily waived a portion of the
management fee. The Adviser can terminate this
voluntary waiver at any time. The management fee paid by the Fund (after the
voluntary waiver) was 0.25% for the fiscal year ended July31, 1999.
3The Shareholder Services Provider voluntarily waived a portion of the
shareholder services fee. The Shareholder Services Provider can terminate
this voluntary waiver at any time. The shareholder services fee paid by the
Fund (after the voluntary waiver) was 0.24% for the fiscal year ended July31,
1999.
<PAGE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund's
Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Shares for the time
periods indicated and then redeem all of your Shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and that the Fund's Share's operating expenses are before waivers as shown in
the Table and remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
1 Year $ 87
3 Years $ 271
5 Years $ 471
10 Years $1,049
WHAT ARE THE FUND'S INVESTMENT STRATEGIES?
The Fund invests at least 65% of its assets in a portfolio of U.S. Treasury
securities maturing in 397 days or less. These investments include repurchase
agreements collateralized fully by U.S. Treasury securities. The dollar-weighted
average maturity of the Fund's portfolio will be 90 days or less.
The Adviser targets a dollar-weighted average portfolio maturity range based
upon its interest rate outlook. The Adviser formulates its interest rate outlook
by analyzing a variety of factors, such as:
n current U.S. economic activity and the economic outlook;
n current short-term interest rates;
n the Federal Reserve Board's policies regarding short-term interest rates; and
n the potential effects of foreign economic activity on U.S. short-term interest
rates. The Adviser generally shortens the portfolio's dollar-weighted average
maturity when it expects interest rates to rise and extends the maturity when it
expects interest rates to fall. The Adviser selects securities used to shorten
or extend the portfolio's dollar-weighted average maturity by comparing the
returns currently offered by different investments to their historical and
expected returns.
WHAT ARE THE PRINCIPAL SECURITIES IN WHICH THE FUND INVESTS?
U.S. TREASURY SECURITIES
U.S. Treasury securities are direct obligations of the federal government of the
United States. U.S. Treasury securities pay interest, dividends or distributions
at a specified rate. The rate may be fixed or adjusted periodically. In
addition, the U.S. Treasury must repay the principal amount of the security,
normally within a specified time.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.
Repurchase agreements are subject to credit risks.
WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?
Interest Rate Risks
Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain unchanged.
Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.
CREDIT RISKs
Credit risk includes the possibility that a party to a transaction involving the
Fund will fail to meet its obligations. This could cause the Fund to lose the
benefit of the transaction or prevent the Fund from selling or buying other
securities to implement its investment strategy.
WHAT DO SHARES COST?
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is
open. The Fund attempts to stabilize the net asset value (NAV) of its shares at
$1.00 by valuing the portfolio securities using the amortized cost method. The
Fund cannot guarantee that its NAV will always remain at $1.00 per share. The
Fund does not charge a front- end sales charge. NAV is determined at 5:00 p.m.
(Eastern time) each day the NYSE is open.
The required minimum initial investment for Fund Shares is $25,000. There is
no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $25,000 minimum
is reached within 90 days. An institutional investor's minimum investment is
calculated by combining all accounts it maintains with the Fund. Accounts
established through investment professionals may be subject to a smaller minimum
investment amount. Keep in mind that investment professionals may charge you
fees for their services in connection with your Share transactions.
HOW IS THE FUND SOLD?
The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to individuals, directly or through investment professionals.
The Distributor and its affiliates may pay out of their assets other amounts
(including items of material value) to investment professionals for marketing
and servicing Shares. The Distributor is a subsidiary of Federated Investors,
Inc. (Federated).
HOW TO PURCHASE SHARES
You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.
THROUGH AN INVESTMENT PROFESSIONAL
n Establish an account with the investment professional; and
n
<PAGE>
Submit your purchase order to the investment professional before 5:00 p.m.
(Eastern time). You will receive that day's dividend if the investment
professional forwards the order to the Fund and the Fund receives payment by
5:00 p.m. (Eastern time). You will become the owner of Shares and receive
dividends when the Fund receives your payment. Investment professionals should
send payments according to the instructions in the sections "By Wire" or "By
Check."
DIRECTLY FROM THE FUND
n Establish your account with the Fund by submitting a completed New Account
Form; and n Send your payment to the Fund by Federal Reserve wire or check. You
will become the owner of Shares after the Fund receives your wire or your check.
If your check does not clear, your purchase will be canceled and you could be
liable for any losses or fees the Fund or its transfer agent incurs.
An institution may establish an account and place an order by calling the Fund
and you will become a shareholder after the Fund receives the order.
By Wire Send your wire to:
State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
You cannot purchase Shares by wire on holidays when wire transfers are
restricted.
By Check
Make your check payable to The Federated Funds, note your account number on the
check, and mail it to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
If you send your check by a private courier or overnight delivery service that
requires a street address, mail it to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third- party checks (checks originally payable to someone other than
you or The Federated Funds).
Orders by mail are considered received when payment by check is converted into
federal funds (normally the business day after the check is received) and Shares
begin earning dividends the next day.
BY AUTOMATIC INVESTMENTS
You may establish an account with your financial institution to automatically
purchase Shares on pre- determined dates or when your bank account reaches a
certain level. Under this program, participating financial institutions are
responsible for prompt transmission of orders and may charge you for this
service. You should read this prospectus along with your financial institution's
agreement or materials describing this service.
HOW TO REDEEM SHARES
You should redeem Shares:
n through an investment professional if you purchased Shares through an
investment professional; or n directly from the Fund if you purchased Shares
directly from the Fund.
THROUGH AN INVESTMENT PROFESSIONAL
Submit your redemption request to your investment professional by the end of
regular trading on the NYSE (normally 4:00 p.m. Eastern time). Investment
professionals are responsible for promptly submitting redemption requests and
providing proper written redemption instructions as outlined below.
DIRECTLY FROM THE FUND
By Telephone
You may redeem Shares by calling the Fund at 1-800-341-7400 once you have
completed the appropriate authorization form for telephone transactions.
If you call before 5:00 p.m. (Eastern time), your redemption will be wired to
you the same day. You will not receive that day's dividend.
If you call after 5:00 p.m. (Eastern time), your redemption will be wired to
you the following business day. You will receive that day's dividend.
By Mail
You may redeem Shares by mailing a written request to the Fund.
Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.
Send requests by mail to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
Send requests by private courier or overnight delivery service to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317 All requests must include:
n Fund Name and Share class, account number and account registration; n amount
to be redeemed; and n signatures of all shareholders exactly as registered. Call
your investment professional or the Fund if you need special instructions.
Signature Guarantees Signatures must be guaranteed if:
n your redemption will be sent to an address other than the address of
record;
n your redemption will be sent to an address of record that was changed within
the last 30 days; or n a redemption is payable to someone other than the
shareholder(s) of record. A signature guarantee is designed to protect your
account from fraud. Obtain a signature guarantee from a bank or trust company,
savings association, credit union or broker, dealer, or securities exchange
member. A notary public cannot provide a signature guarantee.
PAYMENT METHODS FOR REDEMPTIONS
Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form or an Account Service Options Form. These payment
options require a signature guarantee if they were not established when the
account was opened: n an electronic transfer to your account at a financial
institution that is an ACH member; or n wire payment to your account at a
domestic commercial bank that is a Federal Reserve System member.
<PAGE>
Redemption in Kind
Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.
LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:
n to allow your purchase to clear;
n during periods of market volatility; or
n when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets. You will not accrue interest or dividends on
uncashed checks from the Fund if those checks are undeliverable and returned to
the Fund.
Redemptions from retirement accounts
In the absence of your specific instructions, 10% of the value of your
redemption from a retirement account in the Fund may be withheld for taxes. This
withholding only applies to certain types of retirement accounts.
CHECKWRITING
You may request checks to redeem your Fund Shares. Your account will continue to
receive the daily dividend declared on the Shares being redeemed until the check
is presented for payment.
DEBIT CARD
You may request a debit card account that allows you to redeem Shares. There is
an annual fee for this service that the Fund will automatically deduct from your
account.
ADDITIONAL CONDITIONS
Telephone Transactions
The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
Share Certificates
The Fund no longer issues share certificates. If you are redeeming Shares
represented by certificates previously issued by the Fund, you must return the
certificates with your written redemption request. For your protection, send
your certificates by registered or certified mail, but do not endorse them.
ACCOUNT AND SHARE INFORMATION
account activity
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.
DIVIDENDS AND CAPITAL GAINS
The Fund declares any dividends daily and pays them monthly to shareholders. If
you purchase Shares by wire, you begin earning dividends on the day your wire is
received. If you purchase Shares by check, you begin earning dividends on the
business day after the Fund receives your check. In either case, you earn
dividends through the day your redemption request is received.
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund pays any capital gains at least annually. Your dividends and
capital gains distributions will be automatically reinvested in additional
Shares, unless you elect cash payments.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, non-retirement
accounts may be closed if redemptions cause the account balance to fall below
the minimum initial investment amount. Before an account is closed, you will be
notified and allowed 30 days to purchase additional Shares to meet the minimum.
TAX INFORMATION
The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets
Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state and
local tax liability.
WHO MANAGES THE FUND?
The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, Federated Investment Management Company. The Adviser manages the Fund's
assets, including buying and selling portfolio securities. The Adviser's address
is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.
The Adviser and other subsidiaries of Federated advise approximately 175
mutual funds and separate accounts, which totaled approximately $111 billion in
assets as of December 31, 1998. Federated was established in 1955 and is one of
the largest mutual fund investment managers in the United States with
approximately 1,900 employees. More than 4,000 investment professionals make
Federated Funds available to their customers.
Advisory Fees
The Adviser receives an annual investment advisory fee of 0.50% of the Fund's
average daily net assets. The Adviser may voluntarily waive a portion of its fee
or reimburse the Fund for certain operating expenses.
Year 2000 Readiness
The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999 or may experience other date- related problems. The Year 2000 problem may
cause systems to process information incorrectly and could disrupt businesses,
such as the Fund, that rely on computers.
While it is impossible to determine in advance all of the risks to the Fund,
the Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.
The Fund's service providers are making changes to their computer systems to
fix any Year 2000 problems. In addition, they are working to gather information
from third-party providers to determine their Year 2000 readiness.
Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Fund
may purchase.
The financial impact of these issues for the Fund is still being determined.
There can be no assurance that potential Year 2000 problems would not have a
material adverse effect on the Fund.
LAST MEETING OF SHAREHOLDERS
A Special Meeting of the Fund's shareholders was held on March 22, 1999. On
January 21, 1999, the record date for the shareholders voting at the meeting,
there were 2,295,420,900 total outstanding shares. The following items were
considered by shareholders and the results were as follows:
Agenda Item 1
Elected Trustees:1
Names For Withheld
Authority
to Vote
Thomas G. Bigley 1,232,810,2136,849,766
John T. Conroy, Jr. 1,232,810,2136,849,766
Nicholas P. Constantakis 1,232,810,2136,849,766
John F. Cunningham 1,232,810,2136,849,766
J. Christopher Donahue 1,232,810,2136,849,766
Peter E. Madden 1,232,810,2136,849,766
Charles F. Mansfield, Jr. 1,232,810,2136,849,766
John. E. Murray, Jr., 1,232,810,2136,849,766
J.D., S.J.D.
John S. Walsh 1,232,810,2136,849,766
1 The following Trustees continued their terms: John F. Donahue, Lawrence D.
Ellis, M.D., and Marjorie P. Smuts.
Agenda Item 2
Ratified the selection of Deloitte & Touche LLP as the Fund's independent
auditors.
For Against Abstentions
and Broker
Non-Votes
1,227,141,512 8,826,869 3,691,598
Agenda Item 3
Made changes to the Fund's fundamental investment policies:
(a) Approved making non-fundamental, and amending, the Fund's fundamental
investment policy regarding maturity
of money market instruments.
For Against Abstentions
and Broker
Non-Votes
1,081,370,461 12,684,420145,605,098
(b) Amended the Fund's fundamental investment policy regarding acceptable
investments to permit investments in the securities of other investment
companies.
For Against Abstentions
and Broker
Non-Votes
1,076,005,937 18,113,721145,540,321
<PAGE>
(c) Amended the Fund's fundamental investment policy regarding borrowing to
permit the purchase of securities while borrowings are outstanding.
For Against Abstentions
and Broker
Non-Votes
1,003,280,008 12,026,974208,436,392
Agenda Item 4
Approved an amendment and restatement to the Fund's Declaration of Trust to
require the approval by a "1940 Act" majority of the outstanding voting shares
in the event of the sale or conveyance of the assets of the Fund to
another trust or corporation.
For Against Abstentions
and Broker
Non-Votes
1,124,592,634 12,026,974103,040,371
Agenda Item 5
Approved a proposed Agreement and Plan of Reorganization between the Fund and
Money Market Obligations Trust, on behalf of its series, Automated Government
Money Trust (the "New Fund"), whereby the New Fund would acquire all of the
assets of the Fund in exchange for shares of the New Fund to be distributed pro
rata by the Fund to its shareholders in complete liquidation and termination of
the Fund.
For Against Abstentions
and Broker
Non-Votes
1,123,156,835 10,385,85114,927,576
FINANCIAL INFORMATION
The following Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years. Some of the information is presented
on a per share basis. Total returns represent the rate an investor would have
earned (or lost) on an investment in the Fund, assuming reinvestment of any
dividends and capital gains.
This information has been audited by Deloitte & Touche LLP whose report, along
with the Fund's audited financial statements, is included in this prospectus.
The semi-annual report, dated January 31, 1999, which contains unaudited
financial statements, is incorporated by reference into this prospectus.
<PAGE>
AUTOMATED GOVERNMENT MONEY TRUST
A Portfolio of Money Market Obligations Trust
sEPTEMBER 30, 1999
A Statement of Additional Information (SAI) dated September 30, 1999 is
incorporated by reference into this prospectus. Additional information about the
Fund and its investments is contained in the Fund's SAI and SemiAnnual Report to
shareholders as it becomes available. To obtain the SAI, the Semi-Annual Report
and other information without charge, and make inquiries call your investment
professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or
visiting the Public Reference Room in Washington, D.C. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected] or by writing to the SEC's Public
Reference Section, Washington, D.C. 20549-0102. Call 1- 202-942-8090 for
information on the Public Reference Room's operations and copying fees.
Investment Company Act File No. 811-5950
Cusip 60934N815
8082201A (9/99)
PROSPECTUS
Trust for U.S. Treasury Obligations
A Portfolio of Money Market Obligations Trust
A money market mutual fund seeking stability of principal and current income
consistent with stability of principal by investing only in a portfolio U.S.
Treasury securities maturing in 397 days or less.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
SEPTEMBER 30, 1999
CONTENTS
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the
Fund Invests? 4
What are the Specific Risks of Investing in the Fund? 5
What Do Shares Cost? 5
How is the Fund Sold? 5
How to Purchase Shares 5
How to Redeem Shares 7
Account and Share Information 8
Who Manages the Fund? 9
Last Meeting of Shareholders 10
Financial Information 12
Report of Ernst & Young LLP, Independent Auditors 22
Risk/Return Summary
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund is a money market fund that seeks to maintain a stable net asset value
of $1.00 per share. The Fund's investment objective is stability of principal
and current income consistent with stability of principal. While there is no
assurance that the Fund will achieve its investment objective, it endeavors to
do so by following the strategies and policies described in this prospectus.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The Fund invests only in a portfolio of U.S. Treasury securities maturing in 397
days or less. These investments include repurchase agreements collateralized
fully by U.S. Treasury securities. The dollar-weighted average maturity of the
Fund's portfolio will be 90 days or less.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
All mutual funds take investment risks. Therefore, even though the Fund is a
money market fund that seeks to maintain a stable net asset value, it is
possible to lose money by investing in the Fund. The Shares offered by this
prospectus are not deposits or obligations of any bank, are not endorsed or
guaranteed by any bank and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other government agency.
RISK/RETURN BAR CHART AND TABLE
[Graphic]
Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's total returns on a
calendar year-end basis.
The Fund's shares are not sold subject to a sales charge (load). The total
returns displayed above are based upon net asset value.
The Fund's total return for the six-month period from January 1, 1999 to June
30, 1999 was 2.19%.
Within the period shown in the Chart, the Fund's highest quarterly return was
2.29% (quarter ended June 30, 1989). Its lowest quarterly return was 0.68%
(quarter ended June 30, 1993).
AVERAGE ANNUAL TOTAL RETURN TABLE
The following table represents the Fund's Average Annual Total Returns for the
calendar periods ended December 31, 1998.
<TABLE>
<CAPTION>
CALENDAR PERIOD FUND
<S> <C>
1 Year 5.11%
5 Years 4.97%
10 Years 5.37%
</TABLE>
The Fund's 7-Day Net Yield as of December 31, 1998 was 4.49%. Investors may call
the Fund at 1-800-341-7400 to acquire the current 7-Day Net Yield.
Past performance does not necessarily predict future performance. This
information provides you with historical performance information so that you can
analyze whether the Fund's investment risks are balanced by its potential
returns.
What are the Fund's Fees and Expenses?
TRUST FOR U.S. TREASURY OBLIGATIONS
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
Shares of the Fund.
<TABLE>
<CAPTION>
SHAREHOLDER FEES
<S> <C>
Fees Paid Directly From
Your Investment
Maximum Sales Charge
(Load) Imposed on
Purchases (as a percentage
of offering price) None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption proceeds,
as applicable) None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends (and
other Distributions) (as a
percentage of
offering price) None
Redemption Fee (as a
percentage of amount
redeemed, if applicable) None
Exchange Fee None
ANNUAL FUND OPERATING EXPENSES Expenses That are Deducted From Fund Assets (as a
percentage of average net assets)
Management Fee 1 0.40%
Distribution (12b-1) Fee None
Shareholder Services Fee 1 0.25%
Other Expenses 0.10%
Total Annual Fund
Operating Expenses 0.75%
Total Waiver of Fund
Expenses 0.30%
Total Actual Annual
Operating Expenses (after
waivers) 0.45%
1 Pursuant to the investment advisory contract, portions of the Management Fee and
the Shareholder Services Fee were waived. After these waivers, for the fiscal
year ended July 31, 1999, the Management Fee paid by the Fund was 0.30% and the
Shareholder Services Fee was 0.05%. Shareholders must approve any change to the
advisory contract's waiver provision.
</TABLE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's maximum allowable operating expenses as shown in the table remain the
same. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
<TABLE>
<S> <C>
1 Year $ 46
3 Years $ 144
5 Years $ 252
10 Years $ 567
</TABLE>
What are the Fund's Investment Strategies?
The Fund invests only in a portfolio of U.S. Treasury securities maturing in 397
days or less. These investments include repurchase agreements collateralized
fully by U.S. Treasury securities. The dollar-weighted average maturity of the
Fund's portfolio will be 90 days or less.
The Adviser targets a dollar-weighted average portfolio maturity range based
upon its interest rate outlook. The Adviser formulates its interest rate outlook
by analyzing a variety of factors, such as:
* current U.S. economic activity and the economic outlook;
* current short-term interest rates;
* The Federal Reserve Board's policies regarding short-term interest
rates; and
* the potential effects of foreign economic activity on U.S. short-term
interest rates.
The Adviser generally shortens the portfolio's average maturity when it expects
interest rates to rise and extends the maturity when it expects interest rates
to fall. The Adviser selects securities used to shorten or extend the
portfolio's dollar-weighted average maturity by comparing the returns currently
offered by different investments to their historical and expected returns.
What are the Principal Securities in Which the Fund Invests?
U.S. TREASURY SECURITIES
U.S. Treasury securities are direct obligations of the federal government
of the United States. U.S. Treasury securities pay interest, dividends or
distributions at a specified rate. The rate may be a fixed percentage of
the principal or adjusted periodically. The U.S. Treasury must repay the
principal amount of the security, normally within a specified time.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser. Repurchase agreements are subject
to credit risks.
What are the Specific Risks of Investing in the Fund?
INTEREST RATE RISKS
Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain the same.
Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.
CREDIT RISKS
Credit risk includes the possibility that a party to a transaction involving the
Fund will fail to meet its obligations. This could cause the Fund to lose the
benefit of the transaction or prevent the Fund from selling or buying other
securities to implement its investment strategy.
What Do Shares Cost?
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is
open. The Fund attempts to stabilize the net asset value (NAV) of its Shares at
$1.00 by valuing the portfolio securities using the amortized cost method. The
Fund cannot guarantee that its NAV will always remain at $1.00 per Share. The
Fund does not charge a front-end sales charge. NAV is determined at 12:00 noon
and 3:00 p.m. (Eastern time), and as of the close of trading (normally 4:00
p.m., Eastern time) each day the NYSE is open.
The required minimum initial investment for Fund Shares is $25,000. There is no
required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $25,000 minimum is
reached within 90 days. An institutional investor's minimum investment is
calculated by combining all accounts it maintains with the Fund. Accounts
established through investment professionals may be subject to a smaller minimum
investment amount. Keep in mind that investment professionals may charge you
fees for their services in connection with your Share transactions.
How is the Fund Sold?
The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to banks, fiduciaries, custodians of public funds, or similar
institutional investors, and individuals, directly or through investment
professionals.
The Distributor and its affiliates may pay out of their assets other
amounts (including items of material value) to investment professionals
for marketing and servicing Shares. The Distributor is a subsidiary of
Federated Investors, Inc. (Federated).
How to Purchase Shares
You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.
THROUGH AN INVESTMENT PROFESSIONAL
* Establish an account with the investment professional; and
* Submit your purchase order to the investment professional before 3:00 p.m.
(Eastern time). You will receive that day's dividend if the investment
professional forwards the order to the Fund and the Fund receives payment by
3:00 p.m. (Eastern time). You will become the owner of Shares and receive
dividends when the Fund receives your payment.
Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."
DIRECTLY FROM THE FUND
* Establish your account with the Fund by submitting a completed New
Account Form; and
* Send your payment to the Fund by Federal Reserve wire or check.
You will become the owner of Shares after the Fund receives your wire or your
check. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees the Fund or its transfer agent incurs.
An institution may establish an account and place an order by calling the Fund
and you will become a shareholder after the Fund receives the order.
BY WIRE
Send your wire to:
State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
You cannot purchase Shares by wire on holidays when wire transfers are
restricted.
BY CHECK
Make your check payable to THE FEDERATED FUNDS, note your account number on the
check, and mail it to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE that
requires a street address, mail it to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third-party checks (checks originally payable to someone other than
you or The Federated Funds). Orders by mail are considered received when payment
by check is converted into federal funds (normally the business day after the
check is received) and Shares begin earning dividends the next day.
BY AUTOMATIC INVESTMENTS
You may establish an account with your financial institution to automatically
purchase Shares on pre-determined dates or when your bank account reaches a
certain level. Under this program, participating financial institutions are
responsible for prompt transmission of orders and may charge you for this
service. You should read this prospectus along with your financial institution's
agreement or materials describing this service.
BY AUTOMATED CLEARING HOUSE (ACH)
Once you have opened an account, you may purchase additional Shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the approriate sections of the New Account Form.
How to Redeem Shares
You should redeem Shares:
* through an investment professional if you purchased Shares through an
investment professional; or
* directly from the Fund if you purchased Shares directly from the Fund.
THROUGH AN INVESTMENT PROFESSIONAL
Submit your redemption request to your investment professional by the end of
regular trading on the NYSE (normally 4:00 p.m. Eastern time). Investment
professionals are responsible for promptly submitting redemption requests and
providing proper written redemption instructions as outlined below.
DIRECTLY FROM THE FUND
BY TELEPHONE
You may redeem Shares by calling the Fund at 1-800-341-7400 once you have
completed the appropriate authorization form for telephone transactions.
If you call before 3:00 p.m. (Eastern time), your redemption will be wired to
you the same day. You will not receive that day's dividend.
If you call after 3:00 p.m. (Eastern time), your redemption will be wired to you
the following business day. You will receive that day's dividend.
BY MAIL
You may redeem Shares by mailing a written request to the Fund.
Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.
Send requests by mail to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
All requests must include:
* Fund name and share class, account number and account registration;
* amount to be redeemed; and
* signatures of all shareholders exactly as registered.
Call your investment professional or the Fund if you need special instructions.
SIGNATURE GUARANTEES
Signatures must be guaranteed if:
* your redemption will be sent to an address other than the address of
record;
* your redemption will be sent to an address of record that was changed
within the last 30 days; or
* a redemption is payable to someone other than the shareholder(s) of
record.
A signature guarantee is designed to protect your account from fraud. Obtain a
signature guarantee from a bank or trust company, savings association, credit
union or broker, dealer, or securities exchange member. A NOTARY PUBLIC CANNOT
PROVIDE A SIGNATURE GUARANTEE.
PAYMENT METHODS FOR REDEMPTIONS
Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form or an Account Service Options Form. These payment
options require a signature guarantee if they were not established when the
account was opened:
* an electronic transfer to your account at a financial institution that is
an ACH member; or
* wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.
REDEMPTION IN KIND
Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.
LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:
* to allow your purchase to clear;
* during periods of market volatility; or
* when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.
You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.
REDEMPTIONS FROM RETIREMENT ACCOUNTS
In the absence of your specific instructions, 10% of the value of your
redemption from a retirement account in one Fund may be withheld for taxes. This
withholding only applies to certain types of retirement accounts.
ADDITIONAL CONDITIONS
TELEPHONE TRANSACTIONS
The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
SHARE CERTIFICATES
The Fund no longer issues share certificates. If you are redeeming Shares
represented by certificates previously issued by the Fund, you must return the
certificates with your written redemption request. For your protection, send
your certificates by registered or certified mail, but do not endorse them.
Account and Share Information
ACCOUNT ACTIVITY
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.
DIVIDENDS AND CAPITAL GAINS
The Fund declares any dividends daily and pays them monthly to shareholders. If
you purchase Shares by wire, you begin earning dividends on the day your wire is
received. If you purchase Shares by check, you begin earning dividends on the
business day after the Fund receives your check. In either case, you earn
dividends through the day your redemption request is received.
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund pays any capital gains at least annually. Your dividends and
capital gains distributions will be automatically reinvested in additional
Shares without a sales charge, unless you elect cash payments.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, non- retirement
accounts may be closed if redemptions cause the account balance to fall below
the minimum initial investment amount. Before an account is closed, you will be
notified and allowed 30 days to purchase additional Shares to meet the minimum.
TAX INFORMATION
The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets
Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state and
local tax liability.
Who Manages the Fund?
The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, Federated Investment Management Company. The Adviser manages the Fund's
assets, including buying and selling portfolio securities. The Adviser's address
is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.
The Adviser and other subsidiaries of Federated advise approximately 175 mutual
funds and separate accounts, which totaled approximately $111 billion in assets
as of December 31, 1998. Federated was established in 1955 and is one of the
largest mutual fund investment managers in the United States with approximately
1,900 employees. More than 4,000 investment professionals make Federated Funds
available to their customers.
ADVISORY FEES
The Adviser receives an annual investment advisory fee of 0.40% of the Fund's
average daily net assets Under the investment advisory contract, which is
subject to annual review by the Fund's Trustees, the Adviser will waive the
amount, limited to the amount of the advisory fee, by which the Fund's aggregate
annual operating expenses, including the investment advisory fee but excluding
interest, taxes, brokerage commissions, expenses of registering or qualifying
the fund and its Shares under federal and state laws and regulations, expenses
of withholding taxes, and extraordinary expenses, exceed 0.45% of its average
daily net assets.
YEAR 2000 READINESS
The "Year 2000" problem is the potential for computer errors or failures because
certain computer systems may be unable to interpret dates after December 31,
1999 or may experience other date-related problems. The Year 2000 problem may
cause systems to process information incorrectly and could disrupt businesses,
such as the Fund, that rely on computers.
While it is impossible to determine in advance all of the risks to the Fund, the
Fund could experience interruptions in basic financial and operational
functions. Fund shareholders could experience errors or disruptions in Fund
share transactions or Fund communications.
The Fund's service providers are making changes to their computer systems to fix
any Year 2000 problems. In addition, they are working to gather information from
third-party providers to determine their Year 2000 readiness.
Year 2000 problems would also increase the risks of the Fund's investments. To
assess the potential effect of the Year 2000 problem, the Adviser is reviewing
information regarding the Year 2000 readiness of issuers of securities the Fund
may purchase. The financial impact of these issues for the Fund is still being
determined. There can be no assurance that potential Year 2000 problems would
not have a material adverse effect on the Fund.
Last Meeting of Shareholders
A Special Meeting of the Fund's shareholders was held on March 22, 1999. On
January 21, 1999, the record date for the shareholders voting at the meeting,
there were 1,663,472,194 total outstanding shares. The following items were
considered by shareholders and the results were as follows:
AGENDA ITEM 1
Elected Trustees: 1
<TABLE>
<CAPTION>
WITHHELD
AUTHORITY
NAMES FOR TO VOTE
<S> <C> <C>
Thomas G Bigley 864,767,307 596,845
John T. Conroy, Jr. 864,767,307 596,845
John F. Cunningham 864,864,454 499,698
Peter E. Madden 864,864,454 499,698
Charles F. Mansfield, Jr. 864,864,454 499,698
John E. Murray, Jr., J.D., S.J.D. 864,864,454 499,698
John S. Walsh 864,864,454 499,698
</TABLE>
1 The following Trustees continued their terms: John F. Donahue, Nicholas
P. Constantakis, J. Christopher Donahue, Lawrence D. Ellis, M.D., and
Marjorie P. Smuts.
AGENDA ITEM 2
Ratified the selection of Arthur Andersen LLP as the Fund's independent
auditors:
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
864,728,478 59 635,614
</TABLE>
AGENDA ITEM 3
Made changes to the Fund's fundamental investment policies:
(a) Approved making non-fundamental, and amending, the Fund's fundamental
investment policy regarding maturity of money market instruments.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
838,837,129 24,460,753 2,066,269
</TABLE>
(b) Approved amending in the Fund's fundamental investment policy regarding
borrowing to permit the purchase of securities while borrowing are outstanding.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
809,295,084 52,498,092 3,570,975
</TABLE>
(c) Approved amending the Fund's fundamental investment policy regarding
pledging securities to permit the Fund to pledge assets to secure permitted
borrowings.
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
824,498,376 37,288,226 3,577,549
</TABLE>
AGENDA ITEM 4
Approved eliminating the Fund's fundamental investment policy regarding the
average maturity of securities in the Fund's portfolio:
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
838,533,522 20,410,463 6,420,165
</TABLE>
AGENDA ITEM 5
Approved a clarifying amendment to the Fund's Investment Advisory Agreement to
exclude Rule 12b-1 fees and shareholder service fees from the expense cap:
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
836,603,452 26,553,196 2,207,503
</TABLE>
AGENDA ITEM 6
Approved an amendment and restatement to the Fund's Declaration of Trust to
require the approval by a "1940 Act" majority of shareholders in the event of
the sale or conveyance of the assets of the Fund to another trust or
corporation:
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
842,675,160 20,557,387 2,131,604
</TABLE>
AGENDA ITEM 7
Approved a proposed Agreement and Plan of Reorganization between Trust for U.S.
Treasury Obligations (the "Old Fund") and Money Market Obligations Trust, on
behalf of its series, Trust for U.S. Treasury Obligations (the "Fund"), whereby
the Fund would acquire all of the assets of the Old Fund in exchange for shares
of the Fund to be distributed pro rata by the Old Fund to its shareholders
complete liquidation and termination of the Old Fund:
<TABLE>
<CAPTION>
ABSTENTIONS
AND BROKER
FOR AGAINST NON-VOTES
<S> <C> <C>
841,961,878 20,925,207 2,477,066
</TABLE>
Financial Information
FINANCIAL HIGHLIGHTS
The following Financial Highlights will help you understand the Fund's financial
performance from October 1, 1998 to July 31, 1999, the new fiscal year end, and
the past five fiscal years. Some of the information is presented on a per share
basis. Total returns represent the rate an investor would have earned (or lost)
on an investment in the Fund, assuming reinvestment of any dividends and capital
gains.
This information has been audited by Ernst & Young LLP, whose report, along with
the Fund's audited financial statements, is included in this prospectus.
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
PERIOD
ENDED
JULY 31, YEAR ENDED SEPTEMBER 30,
1999 1 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.04 0.05 0.05 0.05 0.05 0.03
LESS DISTRIBUTIONS:
Distributions from net investment income (0.04) (0.05) (0.05) (0.05) (0.05) (0.03)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 2 3.76% 5.28% 5.16% 5.18% 5.45% 3.31%
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.45% 3 0.45% 0.45% 0.45% 0.45% 0.45%
Net investment income 4.45% 3 5.17% 5.04% 5.06% 5.28% 3.21%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $1,465,381 $2,358,709 $1,797,163 $2,660,939 $3,031,247 $4,651,657
</TABLE>
1 The Fund has changed its fiscal year-end from September 30 to July 31.
2 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
3 Computed on an annualized basis.
See Notes which are an integral part of the Financial Statements
Portfolio of Investments
JULY 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM U.S. GOVERNMENT
OBLIGATIONS--23.3%
U.S. TREASURY BILL--0.3%
$ 4,500,000 1 United States Treasury
Bill, 4.470%, 3/30/2000 $ 4,364,783
U.S. TREASURY NOTES--23.0%
336,000,000 United States Treasury
Notes, 5.375% - 7.750%,
8/31/1999 - 7/31/2000 337,148,993
TOTAL SHORT-TERM
U.S. GOVERNMENT
OBLIGATIONS 341,513,776
REPURCHASE AGREEMENTS--
76.4% 2
70,000,000 ABN AMRO Chicago Corp.,
5.070%, dated 7/30/1999,
due 8/2/1999 70,000,000
50,000,000 Bank of New York, New York,
5.070%, dated 7/30/1999,
due 8/2/1999 50,000,000
120,000,000 Barclays de Zoete Wedd
Securities, Inc., 5.080%,
dated 7/30/1999, due
8/2/1999 120,000,000
50,000,000 Bear, Stearns and Co.,
5.090%, dated 7/30/1999,
due 8/2/1999 50,000,000
70,000,000 CIBC Wood Gundy Securities
Corp., 5.060%, dated
7/30/1999, due 8/2/1999 70,000,000
15,000,000 3 Credit Suisse First
Boston, Inc., 4.830%,
dated 6/1/1999, due
8/30/1999 15,000,000
5,100,000 Deutsche Bank Government
Securities, Inc., 5.080%,
dated 7/30/1999,
due 8/2/1999 5,100,000
70,000,000 Donaldson, Lufkin and
Jenrette Securities Corp.,
5.060%, dated 7/30/1999,
due 8/2/1999 70,000,000
70,000,000 First Union Capital
Markets, 5.070%, dated
7/30/1999, due 8/2/1999 70,000,000
70,000,000 Goldman Sachs Group, LP,
5.060%, dated 7/30/1999,
due 8/2/1999 70,000,000
35,000,000 3 Merrill Lynch, Pierce,
Fenner, and Smith, 4.760%,
dated 5/12/1999, due
8/10/1999 35,000,000
15,000,000 3 Merrill Lynch Pierce,
Fenner, and Smith, 4.900%,
dated 5/28/1999, due
8/30/1999 15,000,000
60,000,000 3 Morgan Stanley Group,
Inc., 4.960%, dated
7/26/1999, due 8/25/1999 60,000,000
70,000,000 Paribas Corp., 5.080%,
dated 7/30/1999, due
8/2/1999 70,000,000
70,000,000 Salomon Smith Barney
Holdings, Inc., 5.080%,
dated 7/30/1999, due
8/2/1999 70,000,000
70,000,000 Societe Generale, New
York, 5.070%, dated
7/30/1999, due 8/2/1999 70,000,000
70,000,000 Toronto Dominion
Securities (USA), Inc.,
5.070%, dated 7/30/1999,
due 8/2/1999 70,000,000
70,000,000 Warburg Dillon Reed LLC,
5.080%, dated 7/30/1999,
due 8/2/1999 70,000,000
70,000,000 Westdeutsche Landesbank
Girozentrale, 5.070%,
dated 7/30/1999, due
8/2/1999 70,000,000
TOTAL REPURCHASE
AGREEMENTS 1,120,100,000
TOTAL INVESTMENTS (AT
AMORTIZED COST) 4 $ 1,461,613,776
</TABLE>
1 The issue shows the rate of discount at time of purchase.
2 The repurchase agreements are collateralized fully by U.S. Treasury
obligations based on market prices at the date of the portfolio.
3 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.
4 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($1,465,381,021) at July 31, 1999.
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
JULY 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments in repurchase
agreements $ 1,120,100,000
Investments in securities 341,513,776
Total investments in
securities, at amortized
cost and value $ 1,461,613,776
Cash 526,099
Income receivable 8,289,145
Receivable for shares sold 515,790
TOTAL ASSETS 1,470,944,810
LIABILITIES:
Payable for shares
redeemed 11,600
Income distribution
payable 5,068,475
Payable for advisory fee 387,724
Accrued expenses 95,990
TOTAL LIABILITIES 5,563,789
Net assets for
1,465,381,021 shares
outstanding $ 1,465,381,021
NET ASSET VALUE, OFFERING
PRICE AND REDEMPTION
PROCEEDS PER SHARE:
$1,465,381,021 /
1,465,381,021 shares
outstanding $1.00
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Operations
PERIOD ENDED JULY 31, 1999 1
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 73,386,400
EXPENSES:
Investment advisory fee $ 6,001,262
Administrative personnel
and services fee 1,131,238
Custodian fees 122,059
Transfer and dividend
disbursing agent fees and
expenses 12,486
Trustees' fees 19,425
Auditing fees 13,135
Legal fees 15,354
Portfolio accounting fees 117,604
Shareholder services fee 3,750,789
Share registration costs 19,443
Printing and postage 63,279
Insurance premiums 5,851
Miscellaneous 22,600
TOTAL EXPENSES 11,294,525
WAIVERS:
Waiver of investment
advisory fee $ (1,523,031)
Waiver of shareholder
services fee (3,000,631)
TOTAL WAIVERS (4,523,662)
Net expenses 6,770,863
Net investment income $ 66,615,537
</TABLE>
1 The Fund has changed its fiscal year-end from September 30 to July 31.
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
PERIOD
ENDED
JULY 31, YEAR ENDED SEPTEMBER 30,
1999 1 1998 1997
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 66,615,537 $ 98,226,845 $ 122,829,265
DISTRIBUTIONS TO
SHAREHOLDERS:
Distributions from net
investment income (66,615,537) (98,226,845) (122,829,265)
SHARE TRANSACTIONS:
Proceeds from sale of
shares 6,150,124,739 8,814,750,379 10,154,245,628
Net asset value of shares
issued to shareholders in
payment of distributions
declared 7,041,055 11,702,911 13,230,871
Cost of shares redeemed (7,050,493,479) (8,264,907,672) (11,031,251,972)
CHANGE IN NET ASSETS
RESULTING FROM
SHARE TRANSACTIONS (893,327,685) 561,545,618 (863,775,473)
Change in net assets (893,327,685) 561,545,618 (863,775,473)
NET ASSETS:
Beginning of period 2,358,708,706 1,797,163,088 2,660,938,561
End of period $ 1,465,381,021 $ 2,358,708,706 $ 1,797,163,088
</TABLE>
1 The Fund has changed its fiscal year-end from September 30 to July 31.
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
JULY 31, 1999
ORGANIZATION
Money Market Obligations Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a open-end, management
investment company. The Trust consists of 14 portfolios. The financial
statements included herein are only those of the Trust for U.S. Treasury
Obligations (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.
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 provision for federal tax is
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.
CHANGE IN FISCAL YEAR
The Fund has changed its fiscal year-end from September 30 to July 31.
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). At July
31, 1999, capital paid-in aggregated $1,465,381,021. Transactions in shares were
as follows:
<TABLE>
<CAPTION>
PERIOD
ENDED
JULY 31, YEAR ENDED SEPTEMBER 30,
1999 1 1998 1997
<S> <C> <C> <C>
Shares sold 6,150,124,739 8,814,750,379 10,154,245,628
Shares issued to
shareholders in payment of
distributions declared 7,041,055 11,702,911 13,230,871
Shares redeemed (7,050,493,479 (8,264,907,672) (11,031,251,972)
NET CHANGE RESULTING FROM
SHARE TRANSACTIONS (893,327,685) 561,545,618 (863,775,473)
</TABLE>
1 The Fund has changed its fiscal year-end from September 30 to July 31.
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE
Federated Investment Management Company, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
0.40% of the Fund's average daily net assets. The Adviser will waive to the
extent of its advisory fee, the amount, if any, by which the Fund's aggregate
annual operating expenses, exceed 0.45% of its average daily net assets of the
Fund.
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, Inc. 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 Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily
net assets of the Fund for the period. The fee paid to FSSC is used to finance
certain services for shareholders and to maintain shareholder accounts. FSSC may
voluntarily choose to waive any portion of its fee. FSSC 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 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.
YEAR 2000 (UNAUDITED)
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
CHANGE OF INDEPENDENT AUDITORS
On May 19, 1999, the Fund's Board of Trustees, upon the recommendation of the
Audit Committee of the Board of Trustees, requested and subsequently accepted
the resignation of Arthur Anderson LLP ("AA") as the Fund's independent
auditors. AA's reports on the Fund's financial statements for the fiscal years
ended September 30, 1997 and September 30, 1998, contained no adverse opinion or
disclaimer of opinion nor were they qualified or modified as to uncertainty,
audit scope or accounting principles. During the Fund's fiscal years ended
September 30, 1997 and September 30, 1998, (i) there were no disagreements with
AA on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of AA, would have caused it to make reference to the subject
matter of the disagreements in connection with its reports on the financial
statements for such years; and (ii) there were no reportable events of the kind
described in Item 304(a)(1)(v) of Regulation S-K under the Securities Act of
1934, as amended.
The Fund, by action of its Trustees, upon the recommendation of the Audit
Committee of the Board, has engaged Ernst & Young LLP ("E&Y") as the independent
auditors to audit the Fund's financial statements for the fiscal year ending
July 31, 1999. During the Fund's fiscal years ended September 30, 1997 and
September 30, 1998, neither the Fund nor anyone on its behalf has consulted E&Y
on items which (i) concerned the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Fund's financial statements of (ii)
concerned the subject of a disagreement (as defined in paragraph (a)(1)(iv) of
Item 304 of Regulation S-K) of reportable events (as described in paragraph
(a)(1)(v) of said Item 304).
Report of Ernst & Young LLP, Independent Auditors
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
MONEY MARKET OBLIGATIONS TRUST:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments of the Trust for U.S. Treasury Obligations (one of
the portfolios constituting Money Market Obligations Trust) as of July 31, 1999,
and the related statement of operations, the statement of changes in net assets,
and the financial highlights for the period from October 1, 1998 to July 31,
1999. These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The statement
of operations for the year ended September 30, 1998, statement of changes in net
assets for each of the two years in the period ended September 30, 1998 and the
financial highlights for each of the five years in the period then ended were
audited by other auditors whose report dated November 20, 1998, expressed an
unqualified opinion on those statements and financial highlights.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements and
financial highlights. Our procedures included confirmation of securities owned
as of July 31, 1999, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Trust for U.S. Treasury Obligations of the Money Market Obligations Trust at
July 31, 1999, and the results of its operations, changes in its net assets and
financial highlights for the period from October 1, 1998 to July 31, 1999, in
conformity with generally accepted accounting principles.
[Graphic]
Boston, Massachusetts
September 17, 1999
[Graphic]
Federated
World-Class Investment Manager
PROSPECTUS
Trust for U.S. Treasury Obligations
A Portfolio of Money Market Obligations Trust
SEPTEMBER 30, 1999
A Statement of Additional Information (SAI), dated September 30, 1999, is
incorporated by reference into this prospectus. Additional information about the
Fund and its investments is contained in the Fund's SAI and SemiAnnual Report to
shareholders as they become available. To obtain the SAI, Semi-Annual Report and
other information without charge, and make inquiries, call your investment
professional or the Fund at 1-800-341- 7400.
You can obtain information about the Fund (including the SAI) by writing or
visiting the Public Reference Room in Washington, DC. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by mail at [email protected] or by writing to the SEC's Public Reference
Section, Washington, DC 2054-0102. Call 1-202-942-8090 for information on the
Public Reference Room's operations and copying fees.
[Graphic]
Federated
Trust for U.S. Treasury Obligations
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N799
8110114A (9/99)
[Graphic]
STATEMENT OF ADDITIONAL INFORMATION
Automated Cash Management Trust
A Portfolio of Money Market Obligations Trust
CASH II SHARES
INSTITUTIONAL SERVICE SHARES
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectuses for Cash II Shares and Institutional
Service Shares (Fund), dated September 30, 1999.
Obtain the prospectus without charge by calling 1-800-341-7400.
SEPTEMBER 30, 1999
[Graphic]
Federated
World-Class Investment Manager
Automated Cash Management Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
G00554-02 (9/99)
[Graphic]
CONTENTS
How is the Fund Organized? 1
Securities in Which the Fund Invests 1
How is the Fund Sold? 6
Subaccounting Services 7
Redemption in Kind 7
Massachusetts Partnership Law 7
Account and Share Information 7
Tax Information 7
Who Manages and Provides Services to the Fund? 8
How Does the Fund Measure Performance? 11
Who is Federated Investors, Inc.? 12
Addresses 14
How is the Fund Organized?
The Fund is a diversified portfolio of Money Market Obligations Trust (Trust).
The Trust is an open-end, management investment company that was established
under the laws of the Commonwealth of Massachusetts on October 3, 1988. The
Trust may offer separate series of shares representing interests in separate
portfolios of securities.
The Board of Trustees (the Board) has established two classes of shares of the
Fund, known as Cash II Shares and Institutional Service Shares (Shares). This
SAI relates to both classes of Shares. The Funds' investment adviser is
Federated Investment Management Company (Adviser). Effective March 31, 1999,
Federated Management, former Adviser to the Fund, became Federated Investment
Management Company (formerly, Federated Advisers).
Securities in Which the Fund Invests
The Fund's principal securities are described in its prospectus. Additional
securities, and further information regarding the principal securities, are
outlined below. In pursuing its investment strategy, the Fund may invest in such
securities for any purpose that is consistent with its investment objective.
SECURITIES DESCRIPTIONS AND TECHNIQUES
FIXED INCOME SECURITIES
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.
A security's yield measures the annual income earned on a security as a
percentage of its price. A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount. If the issuer may redeem the security before its scheduled maturity, the
price and yield on a discount or premium security may change based upon the
probability of an early redemption. Securities with higher risks generally have
higher yields.
The following describes the types of fixed income securities in which the Fund
invests.
U.S. TREASURY SECURITIES
U.S. Treasury securities are direct obligations of the federal government
of the United States. U.S. Treasury securities are generally regarded as
having the lowest credit risks.
AGENCY SECURITIES
Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a GSE). The United
States supports some GSEs with its full faith and credit. Other GSEs receive
support through federal subsidies, loans or other benefits. A few GSEs have no
explicit financial support, but are regarded as having implied support because
the federal government sponsors their activities. Agency securities are
generally regarded as having low credit risks, but not as low as treasury
securities.
CORPORATE DEBT SECURITIES
Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. The Fund may also purchase interests in bank loans to
companies. The credit risks of corporate debt securities vary widely among
issuers.
COMMERCIAL PAPER
Commercial paper is an issuer's obligation with a maturity of less than nine
months. Companies typically issue commercial paper to pay for current
expenditures. Most issuers constantly reissue their commercial paper and use the
proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue
to obtain liquidity in this fashion, its commercial paper may default.
Commercial paper investments will be limited to commercial paper rate A-1 by
Standard & Poor's Corporation, Prime-1 by Moody's investors Services, Inc., or
F-1 by Fitch Investors Service, and unrated but of comparable quality, including
Canadian Commercial Paper ("CCPs") and Europaper."
DEMAND INSTRUMENTS
Demand instruments are corporate debt securities that the issuer must repay upon
demand. Other demand instruments require a third party, such as a dealer or
bank, to repurchase the security for its face value upon demand. The Fund treats
demand instruments as short-term securities, even though their stated maturity
may extend beyond one year.
MUNICIPAL SECURITIES
Municipal securities are issued by states, counties, cities and other political
subdivisions and authorities. Although many municipal securities are exempt from
federal income tax, the Fund may invest in taxable municipal securities.
ASSET BACKED SECURITIES
Asset backed securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial debts
with maturities of less than ten years. However, almost any type of fixed income
assets (including other fixed income securities) may be used to create an asset
backed security. Asset backed securities may take the form of commercial paper,
notes, or pass through certificates. Asset backed securities may have prepayment
risks.
ZERO COUPON SECURITIES
Zero coupon securities do not pay interest or principal until final maturity
unlike debt securities that provide periodic payments of interest (referred to
as a coupon payment). Investors buy zero coupon securities at a price below the
amount payable at maturity. The difference between the purchase price and the
amount paid at maturity represents interest on the zero coupon security.
Investors must wait until maturity to receive interest and principal, which
increases the market and credit risks of a zero coupon security.
BANK INSTRUMENTS
Bank instruments are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit
and banker's acceptances. Yankee instruments are denominated in
U.S. dollars and issued by U.S. branches of foreign banks. Eurodollar
instruments are denominated in U.S. dollars and issued by non-
U.S. branches of U.S. or foreign banks.
The Fund will not invest in instruments of domestic and foreign banks and
savings and loans unless they have capital, surplus, and undivided profits of
over $100,000,000, or if the principal amount of the instrument is insured by
the Bank Insurance Fund which is administered by the Federal Deposit Insurance
Corporation or the Savings Association Insurance Fund which is administered by
the FDIC. These instruments may include Eurodollar Certificates of Deposit,
Yankee Certificates of Deposit, and Eurodollar Time Deposits.
INSURANCE CONTRACTS
Insurance contracts include guaranteed investment contracts, funding agreements
and annuities. The Fund treats these contracts as fixed income securities.
CREDIT ENHANCEMENT
Common types of credit enhancement include guarantees, letters of credit, bond
insurance and surety bonds. Credit enhancement also includes arrangements where
securities or other liquid assets secure payment of a fixed income security. If
a default occurs, these assets may be sold and the proceeds paid to security's
holders. Either form of credit enhancement reduces credit risks by providing
another source of payment for a fixed income security.
FOREIGN SECURITIES
Foreign securities are securities of issuers based outside the United States.
The Fund considers an issuer to be based outside the United States if:
* it is organized under the laws of, or has a principal office located in,
another country;
* the principal trading market for its securities is in another country; or
* it (or its subsidiaries) derived in its most current fiscal year at least 50%
of its total assets, capitalization, gross revenue or profit from goods
produced, services performed, or sales made in another country.
Along with the risks normally associated with domestic securities of the same
type, foreign securities are subject to risks of foreign investing.
SPECIAL TRANSACTIONS
SECURITIES LENDING
The Fund may lend portfolio securities to borrowers that the Adviser deems
creditworthy. In return, the Fund receives cash or liquid securities from the
borrower as collateral. The borrower must furnish additional collateral if the
market value of the loaned securities increases. Also, the borrower must pay the
Fund the equivalent of any dividends or interest received on the loaned
securities.
The Fund will reinvest cash collateral in securities that qualify as an
acceptable investment for the Fund. However, the Fund must pay interest to the
borrower for the use of cash collateral.
Loans are subject to termination at the option of the Fund or the borrower. The
Fund will not have the right to vote on securities while they are on loan, but
it will terminate a loan in anticipation of any important vote. The Fund may pay
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash collateral to a securities
lending agent or broker.
Securities lending activities are subject to interest rate risks and credit
risks.
DELAYED DELIVERY TRANSACTIONS
Delayed delivery transactions, including when issued transactions, are
arrangements in which the Fund buys securities for a set price, with payment and
delivery of the securities scheduled for a future time. During the period
between purchase and settlement, no payment is made by the Fund to the issuer
and no interest accrues to the Fund. The Fund records the transaction when it
agrees to buy the securities and reflects their value in determining the price
of its shares. Settlement dates may be a month or more after entering into these
transactions so that the market values of the securities bought may vary from
the purchase prices. Therefore, delayed delivery transactions create interest
rate risks for the Fund. Delayed delivery transactions also involve credit risks
in the event of a counterparty default.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.
The Fund's custodian or subcustodian will take possession of the securities
subject to repurchase agreements. The Adviser or subcustodian will monitor the
value of the underlying security each day to ensure that the value of the
security always equals or exceeds the repurchase price.
Repurchase agreements are subject to credit risks.
REVERSE REPURCHASE AGREEMENTS
Reverse repurchase agreements are repurchase agreements in which the Fund is the
seller (rather than the buyer) of the securities, and agrees to repurchase them
at an agreed upon time and price. A reverse repurchase agreement may be viewed
as a type of borrowing by the Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because the Fund must repurchase the underlying security at a higher price,
regardless of the market value of the security at the time of repurchase.
ASSET COVERAGE
In order to secure its obligations in connection with special transactions, the
Fund will either own the underlying assets, enter into an offsetting transaction
or set aside readily marketable securities with a value that equals or exceeds
the Fund's obligations. Unless the Fund has other readily marketable assets to
set aside, it cannot trade assets used to secure such obligations without
entering into an offsetting transaction or terminating the special transaction.
This may cause the Fund to miss favorable trading opportunities or to realize
losses on special transactions.
SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund may invest its assets in securities of other investment companies as an
efficient means of carrying out its investment policies. It should be noted that
investment companies incur certain expenses, such as management fees, and,
therefore, any investment by the Fund in shares of other investment companies
may be subject to such duplicate expenses. At the present time, the Fund expects
that its investments in other investment companies will be limited to shares of
money market funds affiliated with the Fund's investment adviser.
INVESTMENT RATINGS
A nationally recognized rating service's two highest rating categories are
determined without regard for sub-categories and gradations. For example,
securities rated SP-1+, SP-1, or SP-2 by Standard & Poor's Ratings Group
("S&P"), MIG-1 or MIG-2 by Moody's Investors Service, Inc. ("Moody's"), or F-1+,
F-1, or F-2 by Fitch Investors Service, Inc. ("Fitch") are all considered rated
in one of the two highest short-term rating categories. The Fund will follow
applicable regulations in determining whether a security rated by more than one
rating service can be treated as being in one of the two highest short-term
rating categories; currently, such securities must be rated by two rating
services in one of their two highest rating categories. See "Regulatory
Compliance."
INVESTMENT RISKS
There are many factors which may affect an investment in the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below.
CREDIT RISKS
Fixed income securities generally compensate for greater credit risk by paying
interest at a higher rate. The difference between the yield of a security and
the yield of a U.S. Treasury security with a comparable maturity (the spread)
measures the additional interest paid for risk. Spreads may increase generally
in response to adverse economic or market conditions. A security's spread may
also increase if the security's rating is lowered, or the security is perceived
to have an increased credit risk. An increase in the spread will cause the price
of the security to decline.
LEVERAGE RISKS
Leverage risk is created when an investment exposes the Fund to a level of risk
that exceeds the amount invested. Changes in the value of such an investment
magnify the Fund's risk of loss and potential for gain.
RISKS OF FOREIGN INVESTING
Foreign securities pose additional risks because foreign economic or political
conditions may be less favorable than those of the United States. Securities in
foreign markets may also be subject to taxation policies that reduce returns for
U.S. investors.
PREPAYMENT RISKS
Unlike traditional fixed income securities, which pay a fixed rate of interest
until maturity (which the entire principal amount is due), payments on asset
backed securities include both interest and a partial payment of principal.
Partial payments of principal may be comprised of scheduled principal payments
as well as unscheduled payments from the from the voluntary prepayment,
refinancing, or foreclosure of the underlying loans. If the Fund receives
unscheduled prepayments, it may have to reinvest the proceeds in other fixed
income securities with lower interest rates, higher credit risks, or other less
favorable characteristics.
FUNDAMENT INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is stability of principal and current income
consistent with stability of principal. The Fund invests in high quality money
market instruments which include, but are not limited to, instruments of
domestic and foreign banks and savings and loans, commercial paper, marketable
obligations and repurchase agreements. The Fund invests only in instruments
dominated and payable in U.S. dollars. The Fund may invest in commercial paper
issued in reliance on the exemption from registration afforded by Section 4(2)
of the Securities Act of 1933. Section 4(2) paper is restricted as to
disposition under federal securities law and is generally sold to institutional
investors, such as the Fund, who agree that they are purchasing the paper for
investment purposes and not with a view to public distribution. Any resale by
the purchaser must be in an exempt transaction. Section 4(2) paper is normally
resold through or with the assistance of an issuer or investment dealers who
make a market in Section 4(2) paper, thus providing liquidity. Therefore, the
Fund's investment adviser considers the legally restricted but quite saleable
Section 4(2) paper to be liquid. The investment objective may not be changed by
the Fund's Trustees without shareholder approval.
INVESTMENT LIMITATIONS
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund may borrow money, directly or indirectly, and issue senior securities
to the maximum extent permitted under the 1940 Act.
LENDING CASH OR SECURITIES
The Fund may not make loans, provided that this restriction does not prevent the
Fund from purchasing debt obligations, entering into repurchase agreements,
lending its assets to broker/dealers or institutional investors and investing in
loans, including assignments and participation interests.
INVESTING REAL ESTATE
The Fund may not purchase or sell real estate, provided that this restriction
does not prevent the Fund from investing in issuers which invest, deal, or
otherwise engage in transactions in real estate or interests therein, or
investing in securities that are secured by real estate or interest therein. The
Fund may exercise its rights under agreements relating to such securities,
including the right to enforce security interests and to hold real estate
acquired by reason of such enforcement until that real estate can be liquidated
in an orderly manner.
INVESTING IN COMMODITIES
The Fund may not purchase or sell physical commodities, provided that the Fund
may purchase securities of companies that deal in commodities.
UNDERWRITING
The Fund may not underwrite the securities of other issuers, except that the
Fund may engage in transactions involving the acquisition, disposition or resale
of its portfolio securities, under circumstances where it may be considered to
be an underwriter under the Securities Act of 1933.
CONCENTRATION OF INVESTMENTS
The Fund will not make investments that will result in the concentration of its
investments in the securities of issuers primarily engaged in the same industry.
Government securities, municipal securities and bank instruments will not be
deemed to constitute an industry.
THE ABOVE LIMITATIONS CANNOT BE CHANGED UNLESS AUTHORIZED BY THE BOARD OF
TRUSTEES (BOARD) AND BY THE "VOTE OF A MAJORITY OF ITS OUTSTANDING VOTING
SECURITIES," AS DEFINED BY THE INVESTMENT COMPANY ACT OF 1940. THE FOLLOWING
LIMITATIONS, HOWEVER, MAY BE CHANGED BY THE BOARD WITHOUT SHAREHOLDER APPROVAL.
SHAREHOLDERS WILL BE NOTIFIED BEFORE ANY MATERIAL CHANGE IN THESE LIMITATIONS
BECOMES EFFECTIVE.
BUYING ON MARGIN
The Fund will not purchase securities on margin, provided that the Fund may
obtain short-term credits necessary for the clearance of purchases and sales of
securities.
INVESTING IN RESTRICTED AND ILLIQUID SECURITIES
The Fund may invest in restricted securities. Restricted securities are any
securities in which the Fund may invest pursuant to its investment objective and
policies but which are subject to restrictions on resale under federal
securities law. Under criteria established by the Trustees certain restricted
securities are determined to be liquid. To the extent that restricted securities
are not determined to be liquid the Fund will limit their purchase, together
with other illiquid securities, to 10% of its net assets.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any of its assets, provided
that this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.
In applying the concentration limitation, (1) utility companies will be divided
according to their services, for example, gas, gas, transmissions, electric and
telephone will each be considered a separate industry; (2) financial service
companies will be classified according to the end users of their services, for
example, automobile finance, bank finance and diversified finance will each be
considered a separate industry; and (3) asset-backed securities will be
classified according to the underlying assets securing such securities. To
conform to the current view of the Securities and Exchange Commission (SEC) that
only domestic bank instruments may be excluded from industry concentration
limitations, as a matter of nun-fundamental policy, the Fund will not exclude
foreign bank instruments from industry concentration limits as long as the
policy of the SEC remains in effect. As a non-fundamental operating policy, the
Fund will consider concentration to be the investment of more than 25% of the
value of its total assets in any one industry.
For purposes of the above limitations, the Fund considers certificates of
deposit and demand and time deposits issued by a U.S. branch of a domestic bank
or savings association having capital, surplus, and undivided profits in excess
of $100,000,000 at the time of investment to be "cash items." Except with
respect to borrowing money, if a percentage limitation is adhered to at the time
of investment, a later increase or decrease in percentage resulting from any
change in value or net assets will not result in a violation of such limitation.
The Fund did not borrow money or pledge securities in excess of 5% of the value
of its net assets during the last fiscal year and has no present intent to do so
during the coming fiscal year.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940. In particular, the Fund will comply
with the various requirements of Rule 2a-7 (the "Rule") which regulates money
market funds. The Fund will determine the effective maturity of its investments
according to the Rule. The Fund may change these operational policies to reflect
changes in the laws and regulations without the approval of its shareholders.
DETERMINING MARKET VALUE OF SECURITIES
The Board have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of the
Fund computed by dividing the annualized daily income on the Fund's portfolio by
the net asset value computed as above may tend to be higher than a similar
computation made by using a method of valuation based upon market prices and
estimates. In periods of rising interest rates, the opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in the Rule. Under the Rule,
the Board must establish procedures reasonably designed to stabilize the net
asset value per share, as computed for purposes of distribution and redemption,
at $1.00 per share, taking into account current market conditions and the Fund's
investment objective. The procedures include monitoring the relationship between
the amortized cost value per share and the net asset value per share based upon
available indications of market value. The Board will decide what, if any, steps
should be taken if there is a difference of more than 0.5 of 1% between the two
values. The Board will take any steps they consider appropriate (such as
redemption in kind or shortening the average portfolio maturity) to minimize any
material dilution or other unfair results arising from differences between the
two methods of determining net asset value.
How is the Fund Sold?
Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best-efforts basis.
RULE 12B-1 PLAN (CASH II SHARES)
As a compensation-type plan, the Rule 12b-1 Plan is designed to pay the
Distributor (who may then pay investment professionals such as banks,
broker/dealers, trust departments of banks, and registered investment advisers)
for marketing activities (such as advertising, printing and distributing
prospectuses, and providing incentives to investment professionals) to promote
sales of Shares so that overall Fund assets are maintained or increased. This
helps the Fund achieve economies of scale, reduce per share expenses, and
provide cash for orderly portfolio management and Share redemptions. In
addition, the Fund's service providers that receive asset-based fees also
benefit from stable or increasing Fund assets.
The Fund may compensate the Distributor more or less than its actual marketing
expenses. In no event will the Fund pay for any expenses of the Distributor that
exceed the maximum Rule 12b-1 Plan fee.
The maximum Rule 12b-1 Plan fee that can be paid in any one year may not be
sufficient to cover the marketing-related expenses the Distributor has incurred.
Therefore, it may take the Distributor a number of years to recoup these
expenses.
SHAREHOLDER SERVICES
The Fund may pay Federated Shareholder Services Company, a subsidiary of
Federated Investors, Inc. (Federated), for providing shareholder services and
maintaining shareholder accounts. Federated Shareholder Services Company may
select others to perform these services for their customers and may pay them
fees.
SUPPLEMENTAL PAYMENTS
Investment professionals may be paid fees out of the assets of the Distributor
and/or Federated Shareholder Services Company (but not out of Fund assets). The
Distributor and/or Federated Shareholder Services Company may be reimbursed by
the Adviser or its affiliates.
Investment professionals receive such fees for providing distribution-related or
shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Fund or other special
events at recreational-type facilities, or items of material value. These
payments will be based upon the amount of Shares the investment professional
sells or may sell and/or upon the type and nature of sales or marketing support
furnished by the investment professional.
Subaccounting Services
Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding Shares in a fiduciary, agency,
custodial or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services that may be related to the ownership of Shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.
Redemption in Kind
Although the Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Fund is obligated to pay Share redemptions to any one
shareholder in cash only up to the lesser of $250,000 or 1% of the net assets
represented by such Share class during any 90-day period.
Any Share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.
Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.
Massachusetts Partnership Law
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.
Account and Share Information
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote.
All Shares of the Trust have equal voting rights, except that in matters
affecting only a particular Fund or class, only Shares of that Fund or class are
entitled to vote.
Trustees may be removed by the Board or by shareholders at a special meeting. A
special meeting of shareholders will be called by the Board upon the written
request of shareholders who own at least 10% of the Trust's outstanding shares
of all series entitled to vote.
As of September 10, 1999, the following shareholders owned of record,
beneficially, or both, 5% or more of the Fund's outstanding Institutional
Service Shares: FBS Investment Services Inc., Minneapolis, MN owned
approximately 364,294,025 (19.32%) shares, Stephens, Inc., Little Rock, AR owned
approximately 133,036,193 (7.05%) shares, and Fiduciary Trust Company
International, New York, NY owned approximately 123,472,796 (6.54%) shares.
Shareholders owning 25% or more of outstanding Shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.
Tax Information
FEDERAL INCOME TAX
The Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by the
Trust's other portfolios will be separate from those realized by the Fund.
Who Manages and Provides Services to the Fund?
BOARD OF TRUSTEES
The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Trust,
principal occupations for the past five years and positions held prior to the
past five years, total compensation received as a Trustee from the Trust for its
most recent fiscal year, and the total compensation received from the Federated
Fund Complex for the most recent calendar year. The Trust is comprised of 14
funds and the Federated Fund Complex is comprised of 54 investment companies,
whose investment advisers are affiliated with the Fund's Adviser.
As of September 10, 1999, the Fund's Board and Officers as a group owned less
than 1% of the Fund's outstanding Shares.
<TABLE>
NAME TOTAL
BIRTH DATE AGGREGATE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST AND FUND COMPLEX
<S> <C> <C> <C>
JOHN F. DONAHUE*#+ Chief Executive Officer $0 $0 for the Trust and
Birth Date: July 28, 1924 and Director or Trustee of 54 other investment
Federated Investors Tower the Federated Fund companies in the
1001 Liberty Avenue Complex; Chairman and Fund Complex
Pittsburgh, PA Director, Federated
CHAIRMAN AND TRUSTEE Investors, Inc.; Chairman
and Trustee, Federated Investment
Management Company; Chairman and Director,
Federated Investment Counseling, and
Federated Global Investment Management
Corp.; Chairman, Passport Research, Ltd.
THOMAS G. BIGLEY Director or Trustee of $31,152.11 $113,860.22 for the
Birth Date: February 3, 1934 the Federated Fund Trust and 54 other
15 Old Timber Trail Complex; Director, Member investment companies
Pittsburgh, PA of Executive Committee, in the Fund Complex
TRUSTEE Children's Hospital of
Pittsburgh; Director,
Robroy Industries, Inc.
(coated steel conduits/
computer storage
equipment); formerly:
Senior Partner, Ernst &
Young LLP; Director, MED
3000 Group, Inc.
(physician practice
management); Director,
Member of Executive
Committee, University of
Pittsburgh.
JOHN T. CONROY, JR. Director or Trustee of the $35,704.20 $125,264.48 for the
Birth Date: June 23, 1937 Federated Fund Complex; Trust and 54 other
Wood/Commercial Dept. President, Investment investment companies
John R. Wood Associates, Inc Properties Corporation; in the Fund Complex
3255 Tamiami Trail North Senior Vice President,
Naples, FL John R. Wood and
TRUSTEE Associates, Inc.,
Realtors; Partner or
Trustee in private real
estate ventures in
Southwest Florida;
formerly: President,
Naples Property
Management, Inc. and
Northgate Village
Development Corporation.
JOHN F. CUNNINGHAM++ Director or Trustee of some $11,917.34 $0 for the Trust and
Birth Date: March 5, 1943 of the Federated Fund 46 other investment
353 El Brillo Way Complex; Chairman, companies in the
Palm Beach, FL President and Chief Fund Complex
TRUSTEE Executive Officer,
Cunningham & Co., Inc.
(strategic business
consulting); Trustee
Associate, Boston College;
Director, Iperia Corp.
(communications/
software); formerly:
Director, Redgate
Communications; Director,
EMC Corporation (computer
storage systems).
Previous Positions:
Chairman of the Board and
Chief Executive Officer,
Computer Consoles, Inc.;
President and Chief
Operating Officer, Wang
Laboratories; Director,
First National Bank of
Boston; Director, Apollo
Computer, Inc.
LAWRENCE D. ELLIS, M.D.* Director or Trustee of the $32,453.74 $113,860.22 for the
Birth Date: October 11, 1932 Federated Fund Complex; Trust and 54 other
3471 Fifth Avenue Professor of Medicine, investment companies
Suite 1111 University of Pittsburgh; in the Fund Complex
Pittsburgh, PA Medical Director,
TRUSTEE University of Pittsburgh
Medical Center - Downtown; Hematologist,
Oncologist, and Internist, University of
Pittsburgh Medical Center; Member, National
Board of Trustees, Leukemia Society of
America.
PETER E. MADDEN Director or Trustee of the $29,513.42 $113,860.22 for the
Birth Date: March 16, 1942 Federated Fund Complex; Trust and 54 other
One Royal Palm Way formerly: Representative, investment companies
100 Royal Palm Way Commonwealth of in the Fund Complex
Palm Beach, FL Massachusetts General
TRUSTEE Court; President, State
Street Bank and Trust
Company and State Street
Corporation.
Previous Positions:
Director, VISA USA and VISA
International; Chairman
and Director,
Massachusetts Bankers
Association; Director,
Depository Trust
Corporation; Director, The
Boston Stock Exchange.
CHARLES F. MANSFIELD, JR.++ Director or Trustee of some $11,917.34 $0 for the Trust and
Birth Date: April 10, 1945 of the Federated Fund 50 other investment
80 South Road Complex; companies in the
Westhampton Beach, NY Management Consultant. Fund Complex
TRUSTEE Previous Positions: Chief
Executive Officer, PBTC International Bank;
Partner, Arthur Young & Company (now Ernst
& Young LLP); Chief Financial Officer of
Retail Banking Sector, Chase Manhattan
Bank; Senior Vice President, Marine Midland
Bank; Vice President, Citibank; Assistant
Professor of Banking and Finance, Frank G.
Zarb School of Business, Hofstra
University.
<CAPTION>
NAME TOTAL
BIRTH DATE AGGREGATE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST AND FUND COMPLEX
<S> <C> <C> <C>
JOHN E. MURRAY, JR., J.D., S.J.D.# Director or Trustee of $29,822.54 $113,860.22 for the
Birth Date: December 20, 1932 the Federated Fund Trust and 54 other
President, Duquesne University Complex; President, Law investment companies
Pittsburgh, PA Professor, Duquesne in the Fund Complex
TRUSTEE University; Consulting
Partner, Mollica & Murray;
Director, Michael Baker
Corp. (engineering,
construction, operations,
and technical services).
Previous Positions: Dean
and Professor of Law,
University of Pittsburgh
School of Law; Dean and
Professor of Law,
Villanova University
School of Law.
MARJORIE P. SMUTS Director or Trustee of the $28,684.13 $113,860.22 for the
Birth Date: June 21, 1935 Federated Fund Complex; Trust and 54 other
4905 Bayard Street Public Relations/ investment companies
Pittsburgh, PA Marketing/Conference in the Fund Complex
TRUSTEE Planning.
Previous Positions:
National Spokesperson,
Aluminum Company of
America; television
producer; business owner.
JOHN S. WALSH++ Director or Trustee of some $9,836.75 $0 for the Trust and
Birth Date: November 28, 1957 of the Federated Fund 48 other investment
2007 Sherwood Drive Complex; President and companies in the
Valparaiso, IN Director, Heat Wagon, Inc. Fund Complex
TRUSTEE (manufacturer of
construction temporary
heaters); President and
Director, Manufacturers
Products, Inc.
(distributor of portable
construction heaters);
President, Portable Heater
Parts, a division of
Manufacturers Products,
Inc.; Director, Walsh &
Kelly, Inc. (heavy highway
contractor); formerly:
Vice President, Walsh &
Kelly, Inc.
J. CHRISTOPHER DONAHUE+ President or Executive $0 $0 for the Trust and
Birth Date: April 11, 1949 Vice President of the 16 other investment
Federated Investors Tower Federated Fund Complex; companies in the
1001 Liberty Avenue Director or Trustee of some Fund Complex
Pittsburgh, PA of the Funds in the
PRESIDENT Federated Fund Complex;
President, CEO and Director, Federated
Investors, Inc.; President and Trustee,
Federated Investment Management Company;
President and Trustee, Federated Investment
Counseling; President and Director
Federated Global Investment Management
Corp.; President, Passport Research, Ltd.;
Trustee, Federated Shareholder Services
Company; Director, Federated Services
Company.
EDWARD C. GONZALES Trustee or Director of some $0 $0 for the Trust and
Birth Date: October 22, 1930 of the Funds in the 1 other investment
Federated Investors Tower Federated Fund Complex; company in the
1001 Liberty Avenue President, Executive Vice Fund Complex
Pittsburgh, PA President and Treasurer of
EXECUTIVE VICE PRESIDENT some of the Funds in the
Federated Fund Complex; Vice Chairman,
Federated Investors, Inc.; Vice President,
Federated Investment Management Company and
Federated Investment Counseling, Federated
Global Investment Management Corp. and
Passport Research, Ltd.; Executive Vice
President and Director, Federated
Securities Corp.; Trustee, Federated
Shareholder Services Company.
JOHN W. MCGONIGLE Executive Vice President $0 $0 for the Trust and
Birth Date: October 26, 1938 and Secretary of the 54 other investment
Federated Investors Tower Federated Fund Complex; companies in the
1001 Liberty Avenue Executive Vice President, Fund Complex
Pittsburgh, PA Secretary, and Director,
EXECUTIVE VICE PRESIDENT Federated Investors, Inc.;
AND SECRETARY Trustee, Federated
Investment Management Company; Trustee,
Federated Investment Counseling and
Director, Federated Global Investment
Management Corp.; Director, Federated
Services Company; Director, Federated
Securities Corp.
RICHARD J. THOMAS Treasurer of the Federated $0 $0 for the Trust and
Birth Date: June 17, 1954 Fund Complex; Vice 54 other investment
Federated Investors Tower President - Funds companies in the
1001 Liberty Avenue Financial Services Fund Complex
Pittsburgh, PA Division, Federated
TREASURER Investors, Inc.; formerly:
various management
positions within Funds
Financial Services
Division of Federated
Investors, Inc.
RICHARD B. FISHER President or Vice $0 $0 for the Trust and
Birth Date: May 17, 1923 President of some of the 6 other investment
Federated Investors Tower Funds in the Federated Fund companies in the
1001 Liberty Avenue Complex; Director or Fund Complex
Pittsburgh, PA Trustee of some of the
VICE PRESIDENT Funds in the Federated Fund
Complex; Executive Vice
President, Federated
Investors, Inc.; Chairman
and Director, Federated
Securities Corp.
WILLIAM D. DAWSON, III Chief Investment Officer $0 $0 for the Trust and
Birth Date: March 3, 1949 of this Fund and various 41 other investment
Federated Investors Tower other Funds in the companies in the
1001 Liberty Avenue Federated Fund Complex; Fund Complex
Pittsburgh, PA Executive Vice President,
CHIEF INVESTMENT OFFICER Federated Investment
Counseling, Federated Global Investment
Management Corp., Federated Investment
Management Company and Passport Research,
Ltd.; Registered Representative, Federated
Securities Corp.; Portfolio Manager,
Federated Administrative Services; Vice
President, Federated Investors, Inc.;
formerly: Executive Vice President and
Senior Vice President, Federated Investment
Counseling Institutional Portfolio
Management Services Division; Senior Vice
President, Federated Investment Management
Company and Passport Research, Ltd.
<CAPTION>
NAME TOTAL
BIRTH DATE AGGREGATE COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM TRUST
POSITION WITH TRUST FOR PAST FIVE YEARS FROM TRUST AND FUND COMPLEX
<S> <C> <C> <C>
DEBORAH A. CUNNINGHAM Deborah A. Cunningham is $0 $0 for the Trust and
Birth Date: September 15, 1959 Vice President of the 6 other investment
Federated Investors Tower Trust. Ms. Cunningham companies in the
1001 Liberty Avenue joined Federated in 1981 Fund Complex
Pittsburgh, PA and has been a Senior
VICE PRESIDENT Portfolio Manager and a
Senior Vice President of
the Fund's Adviser since
1997. Ms. Cunningham
served as a Portfolio
Manager and a Vice
President of the Adviser
from 1993 until 1996.
Ms. Cunningham is a
Chartered Financial
Analyst and received her
M.S.B.A. in Finance from
Robert Morris College.
MARY JO OCHSON Mary Jo Ochson is Vice $0 $0 for the Trust and
Birth Date: September 12, 1953 President of the Trust. 7 other investment
Federated Investors Tower Ms. Ochson joined companies in the
1001 Liberty Avenue Federated Investors in Fund Complex
Pittsburgh, PA 1982 and has been a Senior
VICE PRESIDENT Portfolio Manager and a
Senior Vice President of the Fund's
investment adviser since 1996. From 1988
through 1995, Ms. Ochson served as a
Portfolio Manager and a Vice President of
the Fund's investment adviser. Ms.Ochson is
a Chartered Financial Analyst and received
her M.B.A. in Finance from the University
of Pittsburgh.
</TABLE>
* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940.
# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.
+ Mr. Donahue is the father of J. Christopher Donahue, President of the
Trust.
++ Messrs. Cunningham, Mansfield and Walsh became members of the Board of
Trustees/Directors on January 1, 1999. They did not earn any fees for
serving the Fund Complex since these fees are reported as of the end of
the last calendar year. They did not receive any fees as of the fiscal
year end of the Trust.
INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund.
The Adviser is a wholly owned subsidiary of Federated.
The Adviser shall not be liable to the Trust or any Fund shareholder for any
losses that may be sustained in the purchase, holding, or sale of any security
or for anything done or omitted by it, except acts or omissions involving
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties imposed upon it by its contract with the Trust.
OTHER RELATED SERVICES
Affiliates of the Adviser may, from time to time, provide certain electronic
equipment and software to institutional customers in order to facilitate the
purchase of Fund Shares offered by the Distributor.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. The Adviser will generally use those who are recognized dealers in
specific portfolio instruments, except when a better price and execution of the
order can be obtained elsewhere. In selecting among firms believed to meet these
criteria, the Adviser may give consideration to those firms which have sold or
are selling Shares of the Fund and other funds distributed by the Distributor
and its affiliates. The Adviser makes decisions on portfolio transactions and
selects brokers and dealers subject to review by the Fund's Board.
Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser. When the Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Fund and the account(s) in a
manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the Fund.
ADMINISTRATOR
Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Fund. Federated Services Company provides
these at the following annual rate of the average aggregate daily net assets of
all Federated Funds as specified below:
MAXIMUM AVERAGE AGGREGATE DAILY ADMINISTRATIVE FEE NET ASSETS OF THE FEDERATED
FUNDS 0.150 of 1% on the first $250 million 0.125 of 1% on the next $250 million
0.100 of 1% on the next $250 million 0.075 of 1% on assets in excess of $750
million
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of Shares.
Federated Services Company may voluntarily waive a portion of its fee and may
reimburse the Fund for expenses.
Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.
CUSTODIAN
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund. Foreign instruments purchased by the Fund are
held by foreign banks participating in a network coordinated by State Street
Bank.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Services Company, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Fund pays the transfer agent a fee based on the size, type and
number of accounts and transactions made by
shareholders.
INDEPENDENT AUDITORS
The independent auditor for the Fund, Arthur Andersen LLP, plans and performs
its audit so that it may provide an opinion as to whether the Fund's financial
statements and financial highlights are free of material misstatement.
FEES PAID BY THE FUND FOR SERVICES
<TABLE>
<CAPTION>
FOR THE YEAR ENDED SEPTEMBER 30, 1999 1998 1997
<S> <C> <C> <C>
Advisory Fee Earned $12,157,013 $11,464,630 $9,287,875
Advisory Fee Reduction 7,485,466 7,485,466 6,807,192
Administrative Fee 1,833,278 1,729,582 1,402,868
12B-1 FEE
Cash II Shares 1,170,753 - -
SHAREHOLDER SERVICES FEE
Cash II Shares 1,795,634 - -
Institutional Service Shares 4,162,951 - -
</TABLE>
Fees are allocated among classes based on their pro rata share of Fund assets,
except for marketing (Rule 12b-1) fees and shareholder services fees, which are
borne only by the applicable class of Shares.
How Does the Fund Measure Performance?
The Fund may advertise Share performance by using the SEC's standard method for
calculating performance applicable to all mutual funds. The SEC also permits
this standard performance information to be accompanied by non-standard
performance information.
The performance of Shares depends upon such variables as: portfolio quality;
average portfolio maturity; type and value of portfolio securities; changes in
interest rates; changes or differences in the Fund's or any class of Shares'
expenses; and various other factors.
Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.
AVERAGE ANNUAL TOTAL RETURNS AND YIELD
Total returns given for the one-year, five-year and ten-year periods ended July
31, 1999.
Yield and Effective Yield given for the 7-day period ended July 31, 1999.
<TABLE>
<CAPTION>
SHARE CLASS 7-DAY PERIOD 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
INSTITUTIONAL SERVICE SHARES
Total Return - 4.76% 5.12% 5.12%
Yield 4.62% - - -
Effective Yield 4.72% - - -
</TABLE>
<TABLE>
<CAPTION>
START OF PERFORMANCE
SHARE CLASS 7-DAY PERIOD 1 YEAR ON SEPTEMBER 27, 1996
<S> <C> <C> <C>
CASH II SHARES
Total Return N/A 4.58% 4.85%
Yield 4.45% N/A -
Effective Yield 4.54% N/A -
</TABLE>
TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.
The average annual total return for Shares is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of Shares owned at the end of the period by
the NAV per Share at the end of the period. The number of Shares owned at the
end of the period is based on the number of Shares purchased at the beginning of
the period with $1,000, less any applicable sales charge, adjusted over the
period by any additional Shares, assuming the annual reinvestment of all
dividends and distributions.
YIELD AND EFFECTIVE YIELD
The yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated by: determining
the net change in the value of a hypothetical account with a balance of one
Share at the beginning of the base period, with the net change excluding capital
changes but including the value of any additional Shares purchased with
dividends earned from the original one Share and all dividends declared on the
original and any purchased Shares; dividing the net change in the account's
value by the value of the account at the beginning of the base period to
determine the base period return; and multiplying the base period return by
365/7. The effective yield is calculated by compounding the unannualized
base-period return by: adding one to the base-period return, raising the sum to
the 365/7th power; and subtracting one from the result.
To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in Shares,
the Share performance is lower for shareholders paying those fees.
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
* references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;
* charts, graphs and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment;
* discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Fund; and
* information about the mutual fund industry from sources such as the Investment
Company Institute.
The Fund may compare its performance, or performance for the types of securities
in which it invests, to a variety of other investments, including federally
insured bank products such as bank savings accounts, certificates of deposit,
and Treasury bills.
The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.
You may use financial publications and/or indices to obtain a more complete view
of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Fund uses in advertising may include:
* LIPPER ANALYTICAL SERVICES, INC. ranks funds in various fund categories
based on total return, which assumes the reinvestment of all income
dividends and capital gains distributions, if any.
* IBC/DONOGHUE'S MONEY FUND REPORT publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publications reports monthly and
12-month-to-date investment results for the same money funds.
* MONEY, a monthly magazine, regularly ranks money market funds in vaious
categories based on the latest available seven-day effective yield.
* SALOMON 30-DAY CD INDEX compares rate levels of 30-day certificates of deposit
from the top ten prime representative banks.
Who is Federated Investors, Inc.?
Federated is dedicated to meeting investor needs by making structured,
straightforward and consistent investment decisions. Federated investment
products have a history of competitive performance and have gained the
confidence of thousands of financial institutions and individual investors.
Federated's disciplined investment selection process is rooted in sound
methodologies backed by fundamental and technical research. At Federated,
success in investment management does not depend solely on the skill of a single
portfolio manager. It is a fusion of individual talents and state- of-the-art
industry tools and resources. Federated's investment process involves teams of
portfolio managers and analysts, and investment decisions are executed by
traders who are dedicated to specific market sectors and who handle trillions of
dollars in annual trading volume.
FEDERATED FUNDS OVERVIEW
MUNICIPAL FUNDS
In the municipal sector, as of December 31, 1998, Federated managed 10 bond
funds with approximately $2.2 billion in assets and 23 money market funds with
approximately $12.5 billion in total assets. In 1976, Federated introduced one
of the first municipal bond mutual funds in the industry and is now one of the
largest institutional buyers of municipal securities. The Funds may quote
statistics from organizations including The Tax Foundation and the National
Taxpayers Union regarding the tax obligations of Americans.
EQUITY FUNDS
In the equity sector, Federated has more than 28 years' experience. As of
December 31, 1998, Federated managed 27 equity funds totaling approximately
$14.9 billion in assets across growth, value, equity income, international,
index and sector (i.e. utility) styles. Federated's value- oriented management
style combines quantitative and qualitative analysis and features a structured,
computer-assisted composite modeling system that was developed in the 1970s.
CORPORATE BOND FUNDS
In the corporate bond sector, as of December 31, 1998, Federated managed 9 money
market funds and 15 bond funds with assets approximating $22.8 billion and $7.1
billion, respectively. Federated's corporate bond decision making-based on
intensive, diligent credit analysis-is backed by over 26 years of experience in
the corporate bond sector. In 1972, Federated introduced one of the first
high-yield bond funds in the industry. In 1983, Federated was one of the first
fund managers to participate in the asset backed securities market, a market
totaling more than $209 billion.
GOVERNMENT FUNDS
In the government sector, as of December 31, 1998, Federated manages 9 mortgage
backed, 5 government/agency and 19 government money market mutual funds, with
assets approximating $5.3 billion, $1.8 billion and $41.6 billion, respectively.
Federated trades approximately $425 million in U.S. government and mortgage
backed securities daily and places approximately $25 billion in repurchase
agreements each day. Federated introduced the first U.S. government fund to
invest in U.S. government bond securities in 1969. Federated has been a major
force in the short- and intermediate-term government markets since 1982 and
currently manages approximately $43.2 billion in government funds within these
maturity ranges.
MONEY MARKET FUNDS
In the money market sector, Federated gained prominence in the mutual fund
industry in 1974 with the creation of the first institutional money market fund.
Simultaneously, the company pioneered the use of the amortized cost method of
accounting for valuing shares of money market funds, a principal means used by
money managers today to value money market fund shares. Other innovations
include the first institutional tax-free money market fund. As of December 31,
1998, Federated managed more than $76.7 billion in assets across 52 money market
funds, including 19 government, 9 prime and 23 municipal with assets
approximating $41.6 billion, $22.8 billion and $12.5 billion, respectively.
The Chief Investment Officers responsible for oversight of the various
investment sectors within Federated are: U.S. equity and high yield-
J. Thomas Madden; U.S. fixed income-William D. Dawson, III; and global
equities and fixed income-Henry A. Frantzen. The Chief Investment Officers
are Executive Vice Presidents of the Federated advisory companies.
MUTUAL FUND MARKET
Thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $5 trillion to the more than 7,300 funds available,
according to the Investment Company Institute.
FEDERATED CLIENTS OVERVIEW
Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:
INSTITUTIONAL CLIENTS
Federated meets the needs of approximately 900 institutional clients nationwide
by managing and servicing separate accounts and mutual funds for a variety of
purposes, including defined benefit and defined contribution programs, cash
management, and asset/liability management. Institutional clients include
corporations, pension funds, tax exempt entities, foundations/endowments,
insurance companies, and investment and financial advisers. The marketing effort
to these institutional clients is headed by John B. Fisher, President,
Institutional Sales Division, Federated Securities Corp.
BANK MARKETING
Other institutional clients include more than 1,600 banks and trust
organizations. Virtually all of the trust divisions of the top 100 bank holding
companies use Federated Funds in their clients' portfolios. The marketing effort
to trust clients is headed by Timothy C. Pillion, Senior Vice President, Bank
Marketing & Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated Funds are available to consumers through major brokerage firms
nationwide-we have over 2,200 broker/dealer and bank broker/dealer relationships
across the country-supported by more wholesalers than any other mutual fund
distributor. Federated's service to financial professionals and institutions has
earned it high ratings in several surveys performed by DALBAR, Inc. DALBAR is
recognized as the industry benchmark for service quality measurement. The
marketing effort to these firms is headed by James F. Getz, President,
Broker/Dealer Sales Division, Federated Securities Corp.
Addresses
AUTOMATED CASH MANAGEMENT TRUST
Institutional Service Shares
Cash II Shares
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
INVESTMENT ADVISER
Federated Investment Management Company
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
INDEPENDENT AUDITORS
Arthur Andersen LLP
225 Franklin Street
Boston, MA 02110-2812
AUTOMATED GOVERNMENT MONEY TRUST
A Portfolio of Money Market Obligations Trust
<PAGE>
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Automated Government Money Trust
(Fund), dated September 30, 1999. Obtain the prospectus without charge by
calling 1-800-341-7400.
<PAGE>
September 30, 1999
<PAGE>
60934N815 (9/99)
<PAGE>
Contents
How is the Fund Organized? 1
Securities in Which the Fund Invests 1
How is the Fund Sold? 3
Subaccounting Services 3
Redemption in Kind 4
Massachusetts Partnership Law 4
Account and Share Information 4
Tax Information 4
Who Manages and Provides Services to the Fund? 5
How Does the Fund Measure Performance? 8
Who is Federated Investors, Inc.? 9
Addresses 11
<PAGE>
HOW IS THE FUND ORGANIZED?
The Fund is a diversified portfolio of Money Market Obligations Trust (Trust).
The Trust is an open-end management investment company that was established
under the laws of the Commonwealth of Massachusetts on October 3, 1988. The
Fund, which was established on June 1, 1982, was reorganized as a portfolio of
the Trust on April 30, 1999. Effective March 31, 1999, Federated Management,
former Adviser to the Fund, became Federated Investment Management Company
(formerly, Federated Advisers).
SECURITIES IN WHICH THE FUND INVESTS
The Fund's principal securities are described in its prospectus. Additional
securities, and further information regarding the principal securities, are
outlined below. In pursuing its investment strategy, the Fund may invest in such
for any purpose that is consistent with its investment objective.
SECURITIES DESCRIPTIONS AND TECHNIQUES
Fixed Income Securities
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer must repay the principal amount of the
security, normally within a specified time. Fixed income securities provide more
regular income than equity securities. However, the returns on fixed income
securities are limited and normally do not increase with the issuer's earnings.
This limits the potential appreciation of fixed income securities as compared to
equity securities.
A security's yield measures the annual income earned on a security as a
percentage of its price. A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount. If the issuer may redeem the security before its scheduled maturity, the
price and yield on a discount or premium security may change based upon the
probability of an early redemption. Securities with higher risks generally have
higher yields.
The following describes the types of fixed income securities in which the Fund
invests. U.S. Treasury securities U.S. Treasury securities are direct
obligations of the federal government of the United States. U.S. Treasury
securities are generally regarded as having the lowest credit risks. Zero Coupon
Securities Zero coupon securities do not pay interest or principal until final
maturity unlike debt securities that provide periodic payments of interest
(referred to as a coupon payment). Investors buy zero coupon securities at a
price below the amount payable at maturity. The difference between the purchase
price and the amount paid at maturity represents interest on the zero coupon
security. Investors must wait until maturity to receive interest and principal,
which increases the interest rate risks and credit risks of a zero coupon
security.
There are many forms of zero coupon securities. Some are issued at a discount
and are referred to as zero coupon or capital appreciation bonds. Others are
created by separating the right to receive coupon payments from the right to
receive the bond's principal due at maturity, a process known as coupon
stripping. Treasury STRIPs are the most common form of "stripped" U.S. Treasury
zero coupon securities. In addition, some securities give the issuer the option
to deliver additional securities in place of cash interest payments, thereby
increasing the amount payable at maturity. These are referred to as pay-in-kind
or PIK securities.
Special Transactions
Repurchase Agreements
Repurchase agreements are transactions in which a Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements with
banks and other recognized financial institutions, such as securities dealers,
deemed creditworthy by the Adviser.
The Fund's custodian or subcustodian will take possession of the securities
subject to repurchase agreements. The Adviser or subcustodian will monitor the
value of the underlying security each day to ensure that the value of the
security always equals or exceeds the repurchase price.
Repurchase agreements are subject to credit risks.
Reverse Repurchase Agreements
Reverse repurchase agreements are repurchase agreements in which a Fund is the
seller (rather than the buyer) of the securities, and agrees to repurchase them
at an agreed upon time and price. A reverse repurchase agreement may be viewed
as a type of borrowing by the Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risk
because the Fund must repurchase the underlying security at a higher price,
regardless of the market value of the security at the time of repurchase.
<PAGE>
When Issued Transactions
Delayed delivery transactions, including when issued transactions are
arrangements in which a Fund purchases securities for a set price, with payment
and delivery of the securities scheduled for a future time. During the period
between purchase and settlement, no payment is made by the Fund to the issuer
and no interest accrues to the Fund. The Fund records the transaction when it
agrees to purchase the securities and reflects their value in determining the
price of its shares. Settlement dates may be a month or more after entering into
these transactions, so that the market values of the securities bought may vary
from the purchase prices. Therefore, delayed delivery transactions create
interest rate risks for the Fund. Delayed delivery transactions also involve
credit risks in the event of a counterparty default.
Asset Coverage
In order to secure its obligations in connection with special transactions, the
Fund will either own the underlying assets, enter into an offsetting transaction
or set aside readily marketable securities with a value that equals or exceeds
the Fund's obligations. Unless the Fund has other readily marketable assets to
set aside, it cannot trade assets used to secure such obligations without
entering into an offsetting or terminating special transaction. This may cause
the Fund to miss favorable trading opportunities or to realize losses on special
transactions.
INVESTMENT RISKS
There are many factors which may affect an investment in the Fund. The Fund's
principal risks are described in its prospectus. Additional factors are outlined
below.
Credit Risks
Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the Fund
will lose money.
Leverage Risks
Leverage risk is created when an investment exposes the Fund to a level of risk
that exceeds the amount invested. Changes in the value of such an investment
magnify the Fund's risk of loss and potential for gain.
fundamental investment objective and policies
The Fund's investment objective is stability of principal and current income
consistent with stability of principal. The Fund may invest in U.S. Treasury
obligations and securities of other investment companies. "U.S. Treasury
obligations" refers to instruments which are issued or guaranteed as to
principal and interest by the U.S. Treasury and therefore constitute obligations
of the United States of America. U.S. Treasury obligations include such
instruments as (i) U.S. Treasury bills, notes and bonds and (ii) instruments of
the Export-Import Bank of the U.S., the General Services Administration, the
Small Business Administration and the Washington Metropolitan Area Transit
Authority, maturing in 13 months or less from the date of acquisition or
purchased pursuant to repurchase agreements which provide for repurchase by the
seller within 13 months from the date of acquisition. The Fund may also purchase
U.S. Treasury obligations on a when- issued or delayed delivery basis.
The Fund may attempt to increase yield by trading portfolio instruments to
take advantage of short-term market variations.
INVESTMENT LIMITATIONS
Selling Short and Buying on Margin
The Fund will not purchase any portfolio instruments on margin or sell any
portfolio instruments short but it may obtain such short-term credits as may be
necessary for clearance of purchases and sales of portfolio instruments.
Borrowing Money
The Fund will not borrow money except as a temporary measure for extraordinary
or emergency purposes and then only in amounts not in excess of 5% of the value
of its total assets. In addition, the Fund may enter into reverse repurchase
agreements and otherwise borrow up to one-third of the value of its total
assets, including the amount borrowed, in order to meet redemption requests
without immediately selling portfolio instruments. This latter practice is not
for investment leverage but solely to facilitate management of the portfolio by
enabling the Fund to meet redemption requests when the liquidation of portfolio
instruments would be inconvenient or disadvantageous.
Interest paid on borrowed funds will not be available for investment. The Fund
will liquidate any such borrowings as soon as possible.
Pledging Assets
The Fund will not mortgage, pledge or hypothecate any of its assets except as
necessary to secure permitted borrowings. In those cases, it may mortgage,
pledge or hypothecate assets having a market value not exceeding the lesser of
the dollar amounts borrowed or 10% of the value of Fund assets at the time of
the borrowing.
Lending Cash or Securities
The Fund will not lend any of its assets, except that it may purchase or hold
U.S. government obligations, including repurchase agreements, permitted by its
investment objective and policies.
Issuing Senior Securities
The Fund will not issue senior securities, except as permitted by the investment
objective and policies. The above limitations cannot be changed unless
authorized by the Board of Trustees (Board) and by the "vote of
a majority of its outstanding voting securities," as defined by the Investment
Company Act of 1940. The following limitations, however, may be changed by the
Board without shareholder approval. Shareholders will be notified before any
material change in these limitations becomes effective.
Investing in Illiquid Securities
The Fund will not invest more than 10% of the value of its net assets in
illiquid securities.
<PAGE>
Investing for Control
The Fund will not invest in securities of a company for the purpose of
exercising control or management. For purposes of the above limitations, the
Fund considers certificates of deposit and demand and time deposits
issued by a U.S. branch of a domestic bank or savings association having
capital, surplus, and undivided profits in excess of $100,000,000 at the time of
investment to be "cash items." Except with respect to borrowing money, if a
percentage limitation is adhered to at the time of investment, a later increase
or decrease in percentage resulting from any change in value or net assets will
not result in a violation of such limitation.
Regulatory Compliance
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940. In particular, the Fund will comply
with the various requirements of Rule 2a-7 (the Rule), which regulates money
market mutual funds. The Fund will determine the effective maturity of its
investments according to the Rule. The Fund may change these operational
policies to reflect changes in the laws and regulations without the approval of
its shareholders.
DETERMINING MARKET VALUE OF SECURITIES
The Board has decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value (NAV) is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on Shares of the
Fund computed by dividing the annualized daily income on the Fund's portfolio by
the NAV computed as above may tend to be higher than a similar computation made
by using a method of valuation based upon market prices and estimates. In
periods of rising interest rates, the opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in the Rule. Under the Rule,
the Board must establish procedures reasonably designed to stabilize the NAV per
Share, as computed for purposes of distribution and redemption, at $1.00 per
Share, taking into account current market conditions and the Fund's investment
objective. The procedures include monitoring the relationship between the
amortized cost value per Share and the NAV per Share based upon available
indications of market value. The Board will decide what, if any, steps should be
taken if there is a difference of more than 0.5 of 1% between the two values.
The Board will take any steps they consider appropriate (such as redemption in
kind or shortening the average portfolio maturity) to minimize any material
dilution or other unfair results arising from differences between the two
methods of determining NAV.
HOW IS THE FUND SOLD?
Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best- efforts basis.
SHAREHOLDER SERVICES
The Fund may pay Federated Shareholder Services Company, a subsidiary of
Federated Investors, Inc. (Federated), for providing shareholder services and
maintaining shareholder accounts. Federated Shareholder Services Company may
select others to perform these services for their customers and may pay them
fees.
SUPPLEMENTAL PAYMENTS
Investment professionals may be paid fees out of the assets of the Distributor
and/or Federated Shareholder Services Company (but not out of Fund assets). The
Distributor and/or Federated Shareholder Services Company may be reimbursed by
the Adviser or its affiliates.
Investment professionals receive such fees for providing distribution-related
or shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Fund or other special
events at recreational-type facilities, or items of material value. These
payments will be based upon the amount of Shares the investment professional
sells or may sell and/or upon the type and nature of sales or marketing support
furnished by the investment professional.
SUBACCOUNTING SERVICES
Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding Shares in a fiduciary, agency,
custodial or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services that may be related to the ownership of Shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.
<PAGE>
REDEMPTION IN KIND
Although the Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Fund is obligated to pay Share redemptions to any one
shareholder in cash only up to the lesser of $250,000 or 1% of the net assets
represented by such Share class during any 90-day period.
Any Share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.
Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving the portfolio securities and selling them
before their maturity could receive less than the redemption value of the
securities and could incur certain transaction costs.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.
ACCOUNT AND SHARE INFORMATION
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All Shares of the Trust have
equal voting rights, except that in matters affecting only a particular Fund or
class, only Shares of that Fund or class are entitled to vote.
Trustees may be removed by the Board or by shareholders at a special meeting.
A special meeting of shareholders will be called by the Board upon the written
request of shareholders who own at least 10% of the Trust's outstanding shares
of all series entitled to vote.
As of September 10, 1999, the following shareholders owned of record,
beneficially, or both, 5% or more of outstanding Shares: VAR & Co., St Paul, MN,
owned approximately 154,261,019 (7.57%) Shares; EGAP & Co., Burlington, VT,
owned approximately 152,617,021 (7.49%) Shares; and Hare & Co., New York, NY,
owned approximately 125,917,007 (6.18%) Shares.
TAX INFORMATION
FEDERAL INCOME TAX
The Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by the
Trust's other portfolios will be separate from those realized by the Fund.
<PAGE>
WHO MANAGES AND PROVIDES SERVICES TO THE FUND?
BOARD OF TRUSTEES
The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Trust,
principal occupations for the past five years and positions held prior to the
past five years, total compensation received as a Trustee from the Trust for its
most recent fiscal year, and the total compensation received from the Federated
Fund Complex for the most recent calendar year. The Trust is comprised of 14
funds and the Federated Fund Complex is comprised of 54 investment companies,
whose investment advisers are affiliated with the Fund's Adviser.
As of September 10, 1999, the Fund's Board and Officers as a group owned less
than 1% of the Fund's outstanding shares.
An asterisk (*) denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940. A pound sign (#) denotes a Member
of the Board's Executive Committee, which handles the Board's responsibilities
between its meetings.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name Birth Date Address Position Principal Occupations for Past Five Years Aggregate Total Compensation
With Trust Compensation From Trust and
From Trust Fund Complex
John F. Donahue*# Birth Date: Chief Executive Officer and Director or Trustee of the $0 $0 for the Trust
July28, 1924 Federated Investors Federated Fund Complex; Chairman and Director, and 54 other
Tower 1001 Liberty Avenue Federated Investors, Inc.; Chairman and Trustee, investment
Pittsburgh, PA CHAIRMAN and TRUSTEE Federated Investment Management Company; Chairman and companies in the
Director, Federated Investment Counseling and Fund Complex
Federated Global Investment Management Corp.;
Chairman, Passport Research, Ltd.
Thomas G. Bigley Birth Date: Director or Trustee of the Federated Fund Complex; $31,152.11 $113,860.22 for
February3, 1934 15 Old Timber Director, Member of Executive Committee, Children's the Trust and 54
Trail Pittsburgh, PA TRUSTEE Hospital of Pittsburgh; Director, Robroy Industries, other investment
Inc. (coated steel conduit/ computer storage companies in the
equipment); formerly: Senior Partner, Ernst & Young Fund Complex
LLP; Director, MED 3000 Group, Inc.;
Director, Member of Executive Committee,
University of Pittsburgh.
John T. Conroy, Jr. Birth Date: Director or Trustee of the Federated Fund Complex; $35,704.20 $125,264.48 for
June23, 1937 Wood Commercial Dept. President, Investment Properties Corporation; Senior the Trust and 54
John R. Wood Associates, Inc. Vice President, JohnR.Wood and Associates, Inc., other investment
Realtors 3255 Tamiami Trail North Realtors; Partner or Trustee in private real estate companies in the
Naples, FL TRUSTEE ventures in Southwest Florida; formerly: President, Fund Complex
Naples Property Management, Inc. and Northgate Village
Development Corporation.
John F. Cunningham Birth Date: Director or Trustee of some of the Federated Fund $11,917.34 $0 for the Trust
March5, 1943 353 El Brillo Way Complex; Chairman, President and Chief Executive and 43 other
Palm Beach, FL TRUSTEE Officer, Cunningham & Co., Inc. (strategic business investment
consulting) ; Trustee Associate, Boston College; companies in the
Director, Iperia Corp. (communications/software); Fund Complex
formerly: Director, Redgate Communications and EMC
Corporation (computer storage systems). Previous
Positions: Chairman of the Board and Chief Executive
Officer, Computer Consoles, Inc.; President and Chief
Operating Officer, Wang Laboratories; Director, First
National Bank of Boston; Director, Apollo Computer,
Inc.
Lawrence D. Ellis, M.D.* Birth Director or Trustee of the Federated Fund Complex; $32,453.74 $113,860.22 for
Date: October11, 1932 3471 Fifth Professor of Medicine, University of Pittsburgh; the Trust and 54
Avenue Suite 1111 Pittsburgh, PA Medical Director, University of Pittsburgh Medical other investment
TRUSTEE Center Downtown; Hematologist, Oncologist and companies in the
Internist, University of Pittsburgh Medical Center; Fund Complex
Member, National Board of Trustees, Leukemia Society
of America.
Peter E. Madden Birth Date: Director or Trustee of the Federated Fund Complex; $29,513.42 $113,860.22 for
March16, 1942 One Royal Palm Way formerly: Representative, Commonwealth of the Trust and 54
100 Royal Palm Way Palm Beach, FL Massachusetts General Court; President, State Street other investment
TRUSTEE Bank and Trust Company and State Street Corporation. companies in the
Previous Positions: Director, VISA USA and VISA Fund Complex
International; Chairman and Director, Massachusetts
Bankers Association; Director, Depository Trust
Corporation; Director, The Boston Stock Exchange.
Name Birth Date Address Position Principal Occupations for Past Five Years Aggregate Total Compensation
With Trust Compensation From Trust and
From Trust Fund Complex
Charles F. Mansfield, Jr. Birth Director or Trustee of some of the Federated Fund $11,917.34 $0 for the Trust
Date: April10, 1945 80 South Road Complex; Management Consultant. Previous Positions; and 43 other
Westhampton Beach, NY TRUSTEE Chief Executive Officer, PBTC International Bank; investment
Partner, Arthur Young & Company (now Ernst & Young companies in the
LLP); Chief Financial Officer of Retail Banking Fund Complex
Sector, Chase Manhattan Bank; Senior Vice President,
Marine Midland Bank; Vice President, Citibank;
Assistant Professor of Banking and Finance, Frank G.
Zarb School of Business, Hofstra University.
John E. Murray, Jr., J.D., S.J.D.# Director or Trustee of the Federated Fund Complex; $29,822.54 $113,860.22 for
Birth Date: December20, 1932 President, Law Professor, Duquesne University; the Trust and 54
President, Duquesne University Consulting Partner, Mollica & Murray; Director, other investment
Pittsburgh, PA TRUSTEE Michael Baker Corp. (engineering, construction, companies in the
operations, and technical support services). Previous Fund Complex
Positions: Dean and Professor of Law, University of
Pittsburgh School of Law; Dean and Professor of Law,
Villanova University School of Law.
Marjorie P. Smuts Birth Date: Director or Trustee of the Federated Fund Complex; $28,684.13 $113,860.22 for
June21, 1935 4905 Bayard Street Public Relations/Marketing/Conference Planning. the Trust and 54
Pittsburgh, PA TRUSTEE Previous Positions: National Spokesperson, Aluminum other investment
Company of America; television producer; business companies in the
owner. Fund Complex
John S. Walsh Birth Date: Director or Trustee of some of the Federated Funds $9,836.75 $0 for the Trust
November28, 1957 2007 Sherwood Complex; President and Director, Heat Wagon, and 40 other
Drive Valparaiso, IN TRUSTEE Inc.(manufacturer of construction temporary heaters); investment
President and Director, Manufacturers Products, Inc. companies in the
(distibutor of portable construction heaters); Fund Complex
President, Portable Heater Parts, a
division of Manufacturers Products, Inc.;
Director, Walsh & Kelly, Inc.; formerly,
Vice President, Walsh & Kelly, Inc. (heavy
highway contractor).
J.Christopher Donahue Birth Date: President or Executive Vice President of the Federated $0 $0 for the Trust
April11, 1949 Federated Investors Fund Complex; Director or Trustee of some of the Funds and 22 other
Tower 1001 Liberty Avenue in the Federated Fund Complex; President, CEO and investment
Pittsburgh, PA PRESIDENT Director, Federated Investors, Inc.; President and companies in the
Trustee, Federated Investment Management Company; Fund Complex
President and Trustee, Federated Investment
Counseling, President and Director, Federated Global
Investment Management Corp.; President, Passport
Research, Ltd.; Trustee, Federated Shareholder
Services Company; Director, Federated Services Company.
Edward C. Gonzales Birth Date: Trustee or Director of some of the Funds in the $0 $0 for the Trust
October22, 1930 Federated Federated Fund Complex; President, Executive Vice and 1 other
Investors Tower 1001 Liberty President and Treasurer of some of the Funds in the investment company
Avenue Pittsburgh, PA EXECUTIVE Federated Fund Complex; Vice Chairman, Federated in the Fund Complex
VICE PRESIDENT Investors, Inc.; Vice President, Federated Investment
Management Company, Federated Global Investment
Management Corp. and Passport Research, Ltd.;
Executive Vice President and Director, Federated
Securities Corp.; Trustee, Federated Shareholder
Services Company.
John W. McGonigle Birth Date: Executive Vice President and Secretary of the $0 $0 for the Trust
October26, 1938 Federated Federated Fund Complex; Executive Vice President, and 54 other
Investors Tower 1001 Liberty Secretary and Director, Federated Investors, Inc.; investment
Avenue Pittsburgh, PA EXECUTIVE Trustee, Federated Investment Management Company; companies in the
VICE PRESIDENT and SECRETARY Trustee, Federated Investment Counseling and Director, Fund Complex
Federated Global Investment Management Corp.;
Director, Federated Services Company; Director,
Federated Securities Corp.
Richard J.Thomas Birth Date: Treasurer of the Federated Fund Complex; Vice $0 $0 for the Trust
June17, 1954 Federated Investors PresidentFunds Financial Services Division, Federated and 54 other
Tower 1001 Liberty Avenue Investors, Inc.; formerly: various management investment
Pittsburgh, PA TREASURER positions within Funds Financial Services Division of companies in the
Federated Investors, Inc. Fund Complex
Name Birth Date Address Position Principal Occupations for Past Five Years Aggregate Total Compensation
With Trust Compensation From Trust and
From Trust Fund Complex
William D. Dawson, III Birth Date: Chief Investment Officer of this Fund and various $0 $0 for the Trust
March3, 1949 Federated Investors other Funds in the Federated Fund Complex; Executive and 41 other
Tower 1001 Liberty Avenue Vice President, Federated Investment Counseling, investment
Pittsburgh, PA CHIEF INVESTMENT Federated Global Investment Management Corp., companies in the
OFFICER Federated Investment Management Company and Passport Fund Complex
Research, Ltd.; Registered Representative,
Federated Securities Corp.; Portfolio
Manager, Federated Administrative Services;
Vice President, Federated Investors, Inc.;
formerly: Executive Vice President and
Senior Vice President, Federated Investment
Counseling Institutional Portfolio
Management Services Division; Senior Vice
President, Federated Research Corp.,
Federated Advisers, Federated Management,
Federated Research, and Passport Research,
Ltd.
Richard B. Fisher Birth Date: President or Vice President of some of the Funds in $0 $0 for the Trust
May17, 1923 Federated Investors the Federated Fund Complex; Director or Trustee of and 6 other
Tower 1001 Liberty Avenue some of the Funds in the Federated Fund Complex; investment
Pittsburgh, PA VICE PRESIDENT Executive Vice President, Federated Investors, Inc.; companies in the
Chairman and Director, Federated Securities Corp. Fund Complex
Deborah A. Cunningham Birth Date: Deborah A. Cunningham is Vice President of the Trust. $0 $0 for the Trust
September15, 1959 Federated Ms.Cunningham joined Federated Investors in 1981 and and 6 other
Investors Tower 1001 Liberty has been a Senior Portfolio Manager and a Senior Vice investment
Avenue Pittsburgh, PA VICE President of the Fund's investment adviser since 1997. companies in the
PRESIDENT Ms.Cunningham served as a Portfolio Manager and a Vice Fund Complex
President of the investment adviser from 1993 until
1996. Ms.Cunningham is a Chartered Financial Analyst
and received her M.S.B.A. in Finance from Robert
Morris College.
Mary Jo Ochson Birth Date: Mary Jo Ochson is Vice President of the Trust. $0 $0 for the Trust
September12, 1953 Federated Ms.Ochson joined Federated Investors in 1982 and has and 7 other
Investors Tower 1001 Liberty been a Senior Portfolio Manager and a Senior Vice investment
Avenue Pittsburgh, PA VICE President of the Fund's investment adviser since 1996. companies in the
PRESIDENT From 1988 through 1995, Ms.Ochson served as a Fund Complex
Portfolio Manager and a Vice President of the Fund's
investment adviser. Ms.Ochson is a Chartered Financial
Analyst and received her M.B.A. in Finance from the
University of Pittsburgh.
</TABLE>
* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940.
# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.
+ Mr. Donahue is the father of J. Christopher Donahue, President of the
Trust.
++ Messrs. Cunningham, Mansfield, and Walsh became members of the Board of
Trustees on January 1, 1999. They did not earn any fees for serving the Fund
Complex since these fees are reported as of the end of the last calendar
year. They did not receive any fees as of the fiscal year end of the Trust.
INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund. The Adviser is a wholly owned subsidiary of Federated.
The Adviser shall not be liable to the Trust or any Fund shareholder for any
losses that may be sustained in the purchase, holding or sale of any security or
for anything done or omitted by it, except acts or omissions involving willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
imposed upon it by its contract with the Trust.
Other Related Services
Affiliates of the Adviser may, from time to time, provide certain electronic
equipment and software to institutional customers in order to facilitate the
purchase of Fund Shares offered by the Distributor.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. The Adviser will generally use those who are recognized dealers in
specific portfolio instruments, except when a better price and execution of the
order can be obtained elsewhere. In selecting among firms believed to meet these
criteria, the Adviser may give consideration to those firms which have sold or
are selling Shares of the Fund and other funds distributed by the Distributor
and its affiliates. The Adviser makes decisions on portfolio transactions and
selects brokers and dealers subject to review by the Fund's Board.
Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser. When the Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Fund and the account(s) in a
manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the Fund.
<PAGE>
ADMINISTRATOR
Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Fund. Federated Services Company provides
these at the following annual rate of the average aggregate daily net assets of
all Federated Funds as specified below:
Maximum Administrative Fee Average Aggregate Daily Net
Assets of the Federated Funds
0.150 of 1% on the first $250million
0.125 of 1% on the next $250million
0.100 of 1% on the next $250million
0.075 of 1% on assets in excess of
$750million
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio. Federated Services Company may voluntarily waive a
portion of its fee and may reimburse the Fund for expenses.
Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets, plus out-of- pocket expenses.
CUSTODIAN
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund. Foreign instruments purchased by the Fund are
held by foreign banks participating in a network coordinated by State Street
Bank.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Services Company, through its registered transfer agent subsidiary
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Fund pays the transfer agent a fee based on the size, type and
number of accounts and transactions made by shareholders.
INDEPENDENT PUBLIC ACCOUNTANTs
The independent public accountant for the Fund, Deloitte & Touche LLP, plans and
performs its audit so that it may provide an opinion as to whether the Fund's
financial statements and financial highlights are free of material
misstatements.
FEES PAID BY THE FUND FOR SERVICES
For the Year Ended July31 1999 1998 1997
Advisory Fee Earned $11,341,399 $11,656,534 $12,237,712
Advisory Fee Reduction 5,744,751 5,783,663 6,473,371
Administrative Fee 1,710,283 1,758,583 1,848,619
Shareholder Services Fee 5,443,871
For the fiscal years ended July 31, 1999, 1998 and 1997, fees paid by the Fund
for services are prior to the Fund's reorganization as a portfolio of the Trust
on April 30, 1999.
HOW DOES THE FUND MEASURE PERFORMANCE?
The Fund may advertise Share performance by using the Securities and Exchange
Commission's (SEC) standard method for calculating performance applicable to all
mutual funds. The SEC also permits this standard performance information to be
accompanied by non-standard performance information.
The performance of Shares depends upon such variables as: portfolio quality;
average portfolio maturity; type and value of portfolio securities; changes in
interest rates; changes or differences in the Fund's or any class of Shares'
expenses; and various other factors.
Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.
Average Annual Total Returns and Yield
Total returns given for the one-year, five-year and ten-year periods ended July
31, 1999. Yield and Effective Yield given for the seven-day period ended July
31, 1999.
7-Day Period 1 Year 5 10
Years Years
Total Return N/A 4.50% 4.97% 4.97%
Yield 4.42% N/A N/A N/A
Effective Yield 4.52% N/A N/A N/A
TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.
The average annual total return for Shares is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of Shares owned at the end of the period by
the NAV per Share at the end of the period. The number of Shares owned at the
end of the period is based on the number of Shares purchased at the beginning of
the period with $1,000, less any applicable sales charge, adjusted over the
period by any additional Shares, assuming the annual reinvestment of all
dividends and distributions.
<PAGE>
YIELD and effective yield
The yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated by: determining
the net change in the value of a hypothetical account with a balance of one
Share at the beginning of the base period, with the net change excluding capital
changes but including the value of any additional Shares purchased with
dividends earned from the original one Share and all dividends declared on the
original and any purchased Shares; dividing the net change in the account's
value by the value of the account at the beginning of the base period to
determine the base-period return; and multiplying the base-period return by
365/7. The effective yield is calculated by compounding the unannualized
base-period return by: adding 1 to the base-period return, raising the sum to
the 365/7th power; and subtracting 1 from the result. The tax-equivalent yield
of Shares is calculated similarly to the yield, but is adjusted to reflect the
taxable yield that Shares would have had to earn to equal the actual yield,
assuming a specific tax rate.
To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in Shares,
the Share performance is lower for shareholders paying those fees.
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
n references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to
certain indices;
n charts, graphs and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred
compounding, dollar-cost averaging and systematic investment;
n discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Fund; and
n information about the mutual fund industry from sources such as the Investment
Company Institute. The Fund may compare its performance, or performance for the
types of securities in which it invests, to a variety of other investments,
including federally insured bank products such as bank savings accounts,
certificates of deposit, and Treasury bills.
The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.
You may use financial publications and/or indices to obtain a more complete
view of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Fund uses in advertising may include:
Lipper Analytical Services, Inc.
Lipper Analytical Services, Inc. ranks funds in various fund categories based
on total return, which assumes the reinvestment of all income dividends and
capital gains distributions, if any.
IBC/Donoghue's Money Fund Report
IBC/Donoghue's Money Fund Report publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publication reports monthly and
12-month-to- date investment results for the same money funds.
Money
Money, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.
Salomon 30-Day Treasury Bill Index
Salomon 30-Day Treasury Bill Index is a weekly quote of the most representative
yields for selected securities, issued by the U.S. Treasury, maturing in 30
days.
WHO IS FEDERATED INVESTORS, INC.?
Federated is dedicated to meeting investor needs by making structured,
straightforward and consistent investment decisions. Federated investment
products have a history of competitive performance and have gained the
confidence of thousands of financial institutions and individual investors.
Federated's disciplined investment selection process is rooted in sound
methodologies backed by fundamental and technical research. At Federated,
success in investment management does not depend solely on the skill of a single
portfolio manager. It is a fusion of individual talents and state-of-the-art
industry tools and resources. Federated's investment process involves teams of
portfolio managers and analysts, and investment decisions are executed by
traders who are dedicated to specific market sectors and who handle trillions of
dollars in annual trading volume.
Federated Funds overview
Municipal Funds
In the municipal sector, as of December 31, 1998, Federated managed 10 bond
funds with approximately $2.2 billion in assets and 23 money market funds with
approximately $12.5 billion in total assets. In 1976, Federated introduced one
of the first municipal bond mutual funds in the industry and is now one of the
largest institutional buyers of municipal securities. The Funds may quote
statistics from organizations including The Tax Foundation and the National
Taxpayers Union regarding the tax obligations of Americans.
<PAGE>
Equity Funds
In the equity sector, Federated has more than 28 years' of experience. As of
December 31, 1998, Federated managed 27 equity funds totaling approximately
$14.9 billion in assets across growth, value, equity income, international,
index and sector (i.e. utility) styles. Federated's value-oriented management
style combines quantitative and qualitative analysis and features a structured,
computer-assisted composite modeling system that was developed in the 1970s.
Corporate Bond Funds
In the corporate bond sector, as of December 31, 1998, Federated managed 9 money
market funds and 15 bond funds with assets approximating $22.8 billion and $7.1
billion, respectively. Federated's corporate bond decision making--based on
intensive, diligent credit analysis--is backed by over 26 years of experience in
the corporate bond sector. In 1972, Federated introduced one of the first
high-yield bond funds in the industry. In 1983, Federated was one of the first
fund managers to participate in the asset-backed securities market, a market
totaling more than $209 billion.
Government Funds
In the government sector, as of December 31, 1998, Federated managed 9
mortgage-backed, 5 government/agency and 19 government money market mutual
funds, with assets approximating $5.3 billion, $1.8 billion and $41.6 billion,
respectively. Federated trades approximately $425 million in U.S. government and
mortgage-backed securities daily and places approximately $25 billion in
repurchase agreements each day. Federated introduced the first U.S. government
fund to invest in U.S. government bond securities in 1969. Federated has been a
major force in the short- and intermediate-term government markets since 1982
and currently manages approximately $43.2 billion in government funds within
these maturity ranges.
Money Market Funds
In the money market sector, Federated gained prominence in the mutual fund
industry in 1974 with the creation of the first institutional money market fund.
Simultaneously, the company pioneered the use of the amortized cost method of
accounting for valuing shares of money market funds, a principal means used by
money managers today to value money market fund shares. Other innovations
include the first institutional tax-free money market fund. As of December 31,
1998, Federated managed more than $76.7 billion in assets across 52 money market
funds, including 19 government, 9 prime and 23 municipal with assets
approximating $41.6 billion, $22.8 billion and $12.5 billion, respectively.
The Chief Investment Officers responsible for oversight of the various
investment sectors within Federated are: U.S. equity and high yield--J. Thomas
Madden; U.S. fixed income--William D. Dawson, III; and global equities and fixed
income--Henry A. Frantzen. The Chief Investment Officers are Executive Vice
Presidents of the Federated advisory companies.
Mutual Fund Market
Thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $5 trillion to the more than 7,300 funds available,
according to the Investment Company Institute.
Federated Clients Overview
Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:
Institutional Clients
Federated meets the needs of approximately 900 institutional clients nationwide
by managing and servicing separate accounts and mutual funds for a variety of
purposes, including defined benefit and defined contribution programs, cash
management, and asset/liability management. Institutional clients include
corporations, pension funds, tax-exempt entities, foundations/ endowments,
insurance companies, and investment and financial advisers. The marketing effort
to these institutional clients is headed by John B. Fisher, President,
Institutional Sales Division, Federated Securities Corp.
Bank Marketing
Other institutional clients include more than 1,600 banks and trust
organizations. Virtually all of the trust divisions of the top 100 bank holding
companies use Federated Funds in their clients' portfolios. The marketing effort
to trust clients is headed by Timothy C. Pillion, Senior Vice President, Bank
Marketing & Sales.
Broker/Dealers and Bank Broker/Dealer Subsidiaries
Federated Funds are available to consumers through major brokerage firms
nationwide--we have over 2,200 broker/dealer and bank broker/dealer
relationships across the country--supported by more wholesalers than any other
mutual fund distributor. Federated's service to financial professionals and
institutions has earned it high ratings in several surveys performed by DALBAR,
Inc. DALBAR is recognized as the industry benchmark for service quality
measurement. The marketing effort to these firms is headed by James F. Getz,
President, Broker/Dealer Sales Division, Federated Securities Corp.
<PAGE>
ADDRESSES
aUTOMATED GOVERNMENT MONEY TRUST
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
Distributor
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Investment Adviser
Federated Investment Management Company
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Custodian
State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600
Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
Independent Public Accountants
Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116
TRUST FOR U.S. TREASURY OBLIGATIONS
A Portfolio of Money Market Obligations Trust
<PAGE>
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Trust for U.S. Treasury Obligations
(Fund), dated September 30, 1999.
Obtain the prospectus without charge by calling 1-800-341-7400.
<PAGE>
September 30, 1999
<PAGE>
8110114B (9/99)
<PAGE>
Contents
How is the Fund Organized? 1
Securities in Which the Fund Invests 1
How is the Fund Sold? 3
Subaccounting Services 3
Redemption in Kind 4
Massachusetts Partnership Law 4
Account and Share Information 4
Tax Information 4
Who Manages and Provides Services to the Fund? 5
How Does the Fund Measure Performance? 8
Who is Federated Investors, Inc.? 9
Addresses 11
<PAGE>
HOW IS THE FUND ORGANIZED?
The Fund is a diversified portfolio of Money Market Obligations Trust (Trust).
The Trust is an open-end management investment company that was established
under the laws of the Commonwealth of Massachusetts on October 3, 1988. The
Fund, which was established on July 24, 1979, was reorganized as a portfolio of
the Trust on April 30, 1999. The Fund's investment adviser is Federated
Investment Management Company (Adviser). Effective March 31, 1999, Federated
Research, former Adviser to the Fund, became Federated Investment Management
Company (formerly, Federated Advisers).
SECURITIES IN WHICH THE FUND INVESTS
The Fund's principal securities are described in its prospectus. Additional
securities, and further information regarding the principal securities, are
outlined below. In pursuing its investment strategy, the Fund may invest in such
securities for any purpose that is consistent with its investment objective.
SECURITIES DESCRIPTIONS AND TECHNIQUES
Fixed Income Securities
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.
A security's yield measures the annual income earned on a security as a
percentage of its price. A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount. If the issuer may redeem the security before its scheduled maturity, the
price and yield on a discount or premium security may change based upon the
probability of an early redemption. Securities with higher risks generally have
higher yields.
The following describes the types of fixed income securities in which the Fund
invests. U.S. Treasury securities U.S. Treasury securities are direct
obligations of the federal government of the United States. U.S. Treasury
securities are generally regarded as having the lowest credit risks. Zero Coupon
Securities Zero coupon securities do not pay interest or principal until final
maturity unlike debt securities that provide periodic payments of interest
(referred to as a coupon payment). Investors buy zero coupon securities at a
price below the amount payable at maturity. The difference between the purchase
price and the amount paid at maturity represents interest on the zero coupon
security. Investors must wait until maturity to receive interest and principal,
which increases the interest rate risks and credit risks of a zero coupon
security.
There are many forms of zero coupon securities. Some are issued at a discount
and are referred to as zero coupon or capital appreciation bonds. Others are
created by separating the right to receive the bond's coupon payments from the
right to receive the bond's principal due at maturity, a process known as coupon
stripping. Treasury STRIPs are the most common forms of "stripped" U.S. Treasury
zero coupon securities. In addition, some securities give the issuer the option
to deliver additional securities in place of cash interest payments, thereby
increasing the amount payable at maturity. These are referred to as pay-in- kind
or PIK securities.
Special Transactions
Repurchase Agreements
Repurchase agreements are transactions in which a Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements with
banks and other recognized financial institutions, such as securities dealers,
deemed creditworthy by the Adviser.
The Fund's custodian or subcustodian will take possession of the securities
subject to repurchase agreements. The Adviser or subcustodian will monitor the
value of the underlying security each day to ensure that the value of the
security always equals or exceeds the repurchase price.
Repurchase agreements are subject to credit risks.
Reverse Repurchase Agreements
Reverse repurchase agreements are repurchase agreements in which the Fund is the
seller (rather than the buyer) of the securities, and agrees to repurchase them
at an agreed upon time and price. A reverse repurchase agreement may be viewed
as a type of borrowing by the Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because the Fund must repurchase the underlying security at a higher price,
regardless of the market value of the security at the time of repurchase.
delayed delivery Transactions Delayed delivery transactions, including when
issued transactions, are arrangements in which the Fund buys securities for a
set price, with payment and delivery of the securities scheduled for a future
time. During the period between purchase and settlement, no payment is made by
the Fund to the issuer and no interest accrues to the Fund. The Fund records the
transaction when it agrees to buy the securities and reflects their value in
determining the price of its shares. Settlement dates may be a month or more
after entering into these transactions, so that the market values of the
securities bought may vary from the purchase
<PAGE>
prices. Therefore, delayed delivery transactions create interest rate risks for
the Fund. Delayed delivery transactions also involve credit risks in the event
of a counterparty default.
ASSET COVERAGE
In order to secure its obligations in connection with special transactions, the
Fund will either own the underlying assets, enter into an offsetting transaction
or set aside readily marketable securities with a value that equals or exceeds
the Fund's obligations. Unless the Fund has other readily marketable assets to
set aside, it cannot trade assets used to secure such obligations without
entering into an offsetting transaction or terminating the special transaction.
This may cause the Fund to miss favorable trading opportunities or to realize
losses on special transactions.
INVESTMENT RISKS
There are many factors which may affect an investment in the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below.
Credit Risks
Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the Fund
will lose money.
Leverage Risks
Leverage risk is created when an investment exposes the Fund to a level of risk
that exceeds the amount invested. Changes in the value of such an investment
magnify the Fund's risk of loss and potential for gain.
fundamental investment objective and policies
The Fund's investment objective is stability of principal and current income
consistent with stability of principal.
"U.S. Treasury obligations" refers to instruments which are issued or
guaranteed as to principal and interest by the U.S. Treasury and therefore
constitute obligations of the United States of America. U.S. Treasury
obligations include such instruments as (i) U.S. Treasury bills, notes and bonds
and (ii) instruments of the Export-Import Bank of the U.S., the General Services
Administration, the Small Business Administration and the Washington
Metropolitan Area Transit Authority, maturing in 13 months or less from the date
of acquisition or purchased pursuant to repurchase agreements which provide for
repurchase by the seller within 13 months from the date of acquisition. The Fund
may also purchase U.S. Treasury obligations on a when- issued or delayed
delivery basis.
The Fund may attempt to increase yield by trading portfolio instruments to
take advantage of short-term market variations.
The investment objective and policies may not be changed by the Fund's
Trustees without shareholder approval.
INVESTMENT LIMITATIONS
Selling Short
The Fund will not sell any portfolio instruments short.
Buying on Margin
The Fund will not purchase any portfolio instruments on margin but may obtain
such short-term credits as may be necessary for clearance of purchases and sales
of portfolio instruments.
Borrowing Money
The Fund will not borrow money except as a temporary measure for extraordinary
or emergency purposes and then only in amounts not in excess of 5% of the value
of its total assets or in an amount up to one-third of the value of its total
assets including the amount borrowed, in order to meet redemption requests
without immediately selling any portfolio instruments (any such borrowings under
this section will not be collateralized.) This borrowing provision is not for
investment leverage but solely to facilitate management of the portfolio by
enabling the Fund to meet redemption requests where liquidation of portfolio
instruments is deemed to be inconvenient or disadvantageous. Interest paid by
the Fund on borrowed funds will not be available for investment.
Pledging Assets
The Fund will not mortgage, pledge or hypothecate assets except as necessary to
secure permitted borrowings. In those cases, it may pledge assets having a
market value not exceeding the lesser of the dollar amounts borrowed or 10% of
the value of the total assets at the time of the pledge.
Lending Cash or Securities
The Fund will not lend any of its assets, except that it may purchase or hold
U.S. Treasury obligations including repurchase agreements as permitted by its
investment objective and policies.
Investing in Commodities
The Fund will not purchase or sell commodities, commodity contracts or commodity
futures contracts.
Investing in Real Estate
The Fund will not purchase or sell real estate, including limited partnership
interests.
Underwriting
The Fund will not underwrite any issue of securities, except as it may be deemed
to be an underwriter under the Securities Act of 1933 in connection with the
sale of securities in accordance with its investment objective, policies and
limitations.
The above limitations cannot be changed unless authorized by the Board of
Trustees (Board) and by the "vote of a majority of its outstanding voting
securities," as defined by the Investment Company Act of 1940. The following
limitations, however, may be changed by the Board without shareholder approval.
Shareholders will be notified before any material change in these limitations
becomes effective.
<PAGE>
Investing in Restricted Securities
The Fund will not invest in securities subject to restrictions on resale under
federal securities law.
Investing in Illiquid Securities
The Fund will not invest more than 10% of the value of its net assets in
illiquid securities.
Investing for Control
The Fund will not invest in securities of a company for the purpose of
exercising control or management.
Investing in Options
The Fund will not invest in puts, calls, straddles, spreads, or any combination
of them.
For purposes of the above limitations, the Fund considers certificates of
deposit and demand and time deposits issued by a U.S. branch of a domestic bank
or savings association having capital, surplus, and undivided profits in excess
of $100,000,000 at the time of investment to be "cash items." Except with
respect to borrowing money, if a percentage limitation is adhered to at the time
of investment, a later increase or decrease in percentage resulting from any
change in value or net assets will not result in a violation of such limitation.
Regulatory Compliance
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this Statement of Additional Information, in order to comply with
applicable laws and regulations, including the provisions of and regulations
under the Investment Company Act of 1940. In particular, the Fund will comply
with the various requirements of Rule 2a-7 (the "Rule"), which regulates money
market mutual funds. The Fund will determine the effective maturity of its
investments according to the Rule. The Fund may change these operational
policies to reflect changes in the laws and regulations without the approval of
its shareholders.
DETERMINING MARKET VALUE OF SECURITIES
The Board has decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization of
premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value (NAV) is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of the
Fund computed by dividing the annualized daily income on the Fund's portfolio by
the NAV computed as above may tend to be higher than a similar computation made
by using a method of valuation based upon market prices and estimates. In
periods of rising interest rates, the opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in the Rule. Under the Rule,
the Board must establish procedures reasonably designed to stabilize the NAV per
Share, as computed for purposes of distribution and redemption, at $1.00 per
Share, taking into account current market conditions and the Fund's investment
objective. The procedures include monitoring the relationship between the
amortized cost value per Share and the NAV per Share based upon available
indications of market value. The Board will decide what, if any, steps should be
taken if there is a difference of more than 0.5 of 1% between the two values.
The Board will take any steps they consider appropriate (such as redemption in
kind or shortening the average portfolio maturity) to minimize any material
dilution or other unfair results arising from differences between the two
methods of determining NAV.
HOW IS THE FUND SOLD?
Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best- efforts basis.
SHAREHOLDER SERVICES
The Fund may pay Federated Shareholder Services Company, a subsidiary of
Federated Investors, Inc. (Federated), for providing shareholder services and
maintaining shareholder accounts. Federated Shareholder Services Company may
select others to perform these services for their customers and may pay them
fees.
SUBACCOUNTING SERVICES
Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal record- keeping requirements.
The transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding Shares in a fiduciary, agency,
custodial or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services that may be related to the ownership of Shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.
<PAGE>
REDEMPTION IN KIND
Although the Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act of 1940, the Fund is obligated to pay Share redemptions to any one
shareholder in cash only up to the lesser of $250,000 or 1% of the net assets
represented by such Share class during any 90-day period.
Any Share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.
Redemption in kind is not as liquid as a cash redemption. If redemption is
made in kind, shareholders receiving the portfolio securities and selling them
before their maturity could receive less than the redemption value of the
securities and could incur certain transaction costs.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect its
shareholders, the Trust has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Trust.
In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Trust will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Trust. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Trust itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.
ACCOUNT AND SHARE INFORMATION
VOTING RIGHTS
Each Share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All Shares of the Trust have
equal voting rights, except that in matters affecting only a particular Fund or
class, only Shares of that Fund or class are entitled to vote.
Trustees may be removed by the Board or by shareholders at a special meeting.
A special meeting of shareholders will be called by the Board upon the written
request of shareholders who own at least 10% of the Trust's outstanding shares
of all series entitled to vote.
As of September 10, 1999, the following shareholders owned of record,
beneficially, or both, 5% or more of outstanding Shares: First Union National
Bank, Charlotte, NC, on behalf of certain underlying accounts, owned
approximately 179,461,126 (12.66%) Shares; Fleet Securities, Rochester, NY,
owned approximately 96,411,133 (6.79%) Shares; and Cobatco, Synovus Trust
Company, Columbus GA, owned approximately 95,509,445 (6.73%) Shares.
TAX INFORMATION
FEDERAL INCOME TAX
The Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by the
Trust's other portfolios will be separate from those realized by the Fund.
<PAGE>
WHO MANAGES AND PROVIDES SERVICES TO THE FUND?
BOARD OF TRUSTEES
The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Trust,
principal occupations for the past five years and positions held prior to the
past five years, total compensation received as a Trustee from the Trust for its
most recent fiscal year, and the total compensation received from the Federated
Fund Complex for the most recent calendar year. The Trust is comprised of 14
funds and the Federated Fund Complex is comprised of 54 investment companies,
whose investment advisers are affiliated with the Fund's Adviser.
As of September 10, 1999, the Fund's Board and Officers as a group owned less
than 1% of the Fund's outstanding
Shares.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name Birth Date Address Position Principal Occupations for Past Five Years Aggregate Total Compensation From
With Trust Compensation Trust and Fund Complex
From Trust
John F. Donahue*# Birth Date: Chief Executive Officer and Director or Trustee $0 $0 for the Trust and 54
July28, 1924 Federated Investors of the Federated Fund Complex; Chairman and other investment
Tower 1001 Liberty Avenue Director, Federated Investors, Inc.; Chairman and companies in the Fund
Pittsburgh, PA CHAIRMAN and TRUSTEE Trustee, Federated Investment Management Company; Complex
Chairman and Director, Federated Investment
Counseling and Federated Global Investment
Management Corp.; Chairman, Passport Research,
Ltd.
Thomas G. Bigley Birth Date: Director or Trustee of theFederated Fund Complex; $31,152.11 $113,860.22 for the
February3, 1934 15 Old Timber Trail Director, Member of Executive Committee, Trust and 54 other
Pittsburgh, PA TRUSTEE Children's Hospital of Pittsburgh; Director, investment companies in
Robroy Industries, Inc. (coated steel the Fund Complex
conduits/computer storage equipment); formerly:
Senior Partner, Ernst & Young LLP; Director, MED
3000 Group, Inc. (physician practice management);
Director, Member of Executive Committee,
University of Pittsburgh.
John T. Conroy, Jr. Birth Date: Director or Trustee of the Federated Fund $35,704.20 $125,264.48 for the
June23, 1937 Wood/IPC Commercial Complex; President, Investment Properties Trust and 54 other
Dept. John R. Wood Associates, Inc. Corporation; Senior Vice President, JohnR.Wood investment companies in
Realtors 3255 Tamiami Trail North and Associates, Inc., Realtors; Partner or the Fund Complex
Naples, FL TRUSTEE Trustee in private real estate ventures in
Southwest Florida; formerly: President, Naples
Property Management, Inc. and Northgate Village
DevelopmentCorporation.
John F. Cunningham Birth Date: Director or Trustee of some of the Federated Fund $11,917.34 $0 for the Trust and 46
March5, 1943 353 El Brillo Way Palm Complex; Chairman, President and Chief Executive other investment
Beach, FL TRUSTEE Officer, Cunningham & Co., Inc. (strategic companies in the Fund
business consulting); Trustee Associate, Boston Complex
College; Director, Iperia Corp.
(communications/software); formerly: Director,
Redgate Communications and EMC Corporation
(computer storagesystems). Previous Positions:
Chairman of the Board and Chief Executive
Officer, Computer Consoles, Inc.; President and
Chief Operating Officer, Wang Laboratories;
Director, First National Bank of Boston;
Director, Apollo Computer, Inc.
Lawrence D. Ellis, M.D.* Birth Date: Director or Trustee of the Federated Fund $32,453.42 $113,860.22 for the
October11, 1932 3471 Fifth Avenue Complex; Professor of Medicine, University of Trust and 54 other
Suite 1111 Pittsburgh, PA TRUSTEE Pittsburgh; Medical Director, University of investment companies in
Pittsburgh Medical Center Downtown; Hematologist, the Fund Complex
Oncologist and Internist, University of
Pittsburgh Medical Center; Member, National Board
of Trustees, Leukemia Society of America.
Peter E. Madden Birth Date: March16, Director or Trustee of the Federated Fund $29,513.42 $113,860.22 for the
1942 One Royal Palm Way 100 Royal Complex; formerly: Representative, Commonwealth Trust and 54 other
Palm Way Palm Beach, FL TRUSTEE of Massachusetts General Court; President, State investment companies in
Street Bank and Trust Company and State Street the Fund Complex
Corporation. Previous Positions: Director, VISA
USA and VISA International; Chairman and
Director, Massachusetts Bankers Association;
Director, Depository Trust Corporation; Director,
The Boston Stock Exchange.
Name Birth Date Address Position Principal Occupations for Past Five Years Aggregate Total Compensation From
With Trust Compensation Trust and Fund Complex
From Trust
Charles F. Mansfield, Jr. Birth Director or Trustee of some of the Federated Fund $11,917.34 $0 for the Trust and 50
Date: April10, 1945 80 South Road Complex; Management Consultant. Previous other investment
Westhampton Beach, NY TRUSTEE Positions: Chief Executive Officer, PBTC companies in the Fund
International Bank; Partner, Arthur Young & Complex
Company (now Ernst & Young LLP); Chief Financial
Officer of Retail Banking Sector, Chase Manhattan
Bank; Senior Vice President, Marine Midland Bank;
Vice President, Citibank; Assistant Professor of
Banking and Finance, Frank G. Zarb School of
Business, Hofstra University.
John E. Murray, Jr., J.D., S.J.D.# Director or Trustee of theFederated Fund Complex; $29,822.54 $113,860.22 for the
Birth Date: December20, 1932 President, Law Professor, Duquesne University; Trust and 54 other
President, Duquesne University Consulting Partner, Mollica & Murray; Director, investment companies in
Pittsburgh, PA TRUSTEE Michael Baker Corp. (engineering, construction, the Fund Complex
operations, and technicalservices). Previous
Positions: Dean and Professor of Law, University
of Pittsburgh School of Law; Dean and Professor
of Law, Villanova University School of Law.
Marjorie P. Smuts Birth Date: Director or Trustee of the Federated Fund $28,684.13 $113,860.22 for the
June21, 1935 4905 Bayard Street Complex; Public Relations/Marketing/Conference Trust and 54 other
Pittsburgh, PA TRUSTEE Planning. Previous Positions: National investment companies in
Spokesperson, Aluminum Company of
America; the Fund Complex television
producer; business owner.
John S. Walsh Birth Date: Director or Trustee of some of the Federated Fund $9,836.75 $0 for the Trust and 48
November28, 1957 2007 Sherwood Drive Complex; President and Director, Heat Wagon, Inc. other investment
Valparaiso, IN TRUSTEE (manufacturer of construction temporary heaters); companies in the Fund
President and Director, Manufacturers Products, Complex
Inc. (distributor of portable construction
heaters); President, Portable Heater Parts, a
division of Manufacturers Products, Inc.;
Director, Walsh & Kelly, Inc. (heavy highway
contractor); formerly: Vice President, Walsh &
Kelly, Inc.
J.Christopher Donahue Birth Date: President or Executive Vice President of the $0 $0 for the Trust and 16
April11, 1949 Federated Investors Federated Fund Complex; Director or Trustee of other investment
Tower 1001 Liberty Avenue some of the Funds in the Federated Fund Complex; companies in the Fund
Pittsburgh, PA PRESIDENT President, CEO and Director, Federated Investors, Complex
Inc.; President and Trustee, Federated
Investment Management Company; President
and Trustee, Federated Investment
Counseling, President and Director,
Federated Global Investment Management
Corp.; President, Passport Research,
Ltd.; Trustee, Federated Shareholder
Services Company; Director, Federated
Services Company.
Edward C. Gonzales Birth Date: Trustee or Director of some of the Funds in the $0 $0 for the Trust and 1
October22, 1930 Federated Investors Federated Fund Complex; President, Executive Vice other investment
Tower 1001 Liberty Avenue President and Treasurer of some of the Funds in company in the Fund
Pittsburgh, PA EXECUTIVE VICE the Federated Fund Complex; Vice Chairman, Complex
PRESIDENT Federated Investors, Inc.; Vice President,
Federated Investment Management Company,
Federated Investment Counseling, Federated Global
Investment Management Corp. and Passport
Research, Ltd.; Executive Vice President and
Director, Federated Securities Corp.; Trustee,
Federated Shareholder Services Company.
John W. McGonigle Birth Date: Executive Vice President and Secretary of the $0 $0 for the Trust and 54
October26, 1938 Federated Investors Federated Fund Complex; Executive Vice President, other investment
Tower 1001 Liberty Avenue Secretary, and Director, Federated Investors, companies in the Fund
Pittsburgh, PA EXECUTIVE VICE Inc.; Trustee, Federated Investment Management Complex
PRESIDENT and SECRETARY Company; Trustee, Federated Investment Counseling
and Director, Federated Global Investment
Management Corp.; Director, Federated Services
Company; Director, Federated Securities Corp.
Richard J.Thomas Birth Date: June17, Treasurer of the Federated Fund Complex; Vice $0 $0 for the Trust and 54
1954 Federated Investors Tower 1001 President Funds Financial Services Division, other investment
Liberty Avenue Pittsburgh, PA Federated Investors, Inc.; formerly: various companies in the Fund
TREASURER management positions within Funds Financial Complex
Services Division of Federated Investors, Inc.
Name Birth Date Address Position Principal Occupations for Past Five Years Aggregate Total Compensation From
With Trust Compensation Trust and Fund Complex
From Trust
William D. Dawson, III Birth Date: Chief Investment Officer of this Fund and various $0 $0 for the Trust and 41
March3, 1949 Federated Investors other Funds in the Federated Fund Complex; other investment
Tower 1001 Liberty Avenue Executive Vice President, Federated Investment companies in the Fund
Pittsburgh, PA CHIEF INVESTMENT Counseling, Federated Global Investment Complex
OFFICER Management Corp., Federated Investment Management
Company and Passport Research, Ltd.;
Registered Representative, Federated
Securities Corp.; Portfolio Manager,
Federated Administrative Services; Vice
President, Federated Investors, Inc.;
formerly: Executive Vice President and
Senior Vice President, Federated
Investment Counseling Institutional
Portfolio Management Services Division;
Senior Vice President, Federated Research
Corp., Federated Advisers, Federated
Management, Federated Research, and
Passport Research, Ltd.
Richard B. Fisher Birth Date: May17, President or Vice President of some of the Funds $0 $0 for the Trust and 6
1923 Federated Investors Tower 1001 in the Federated Fund Complex; Director or other investment
Liberty Avenue Pittsburgh, PA VICE Trustee of some of the Funds in the Federated companies in the Fund
PRESIDENT Fund Complex; Executive Vice President, Federated Complex
Investors, Inc.; Chairman and Director, Federated
Securities Corp.
Deborah A. Cunningham Birth Date: Deborah A. Cunningham is Vice President of the $0 $0 for the Trust and 6
September15, 1959 Federated Trust. Ms.Cunningham joined Federated Investors other investment
Investors Tower 1001 Liberty Avenue in 1981 and has been a Senior Portfolio Manager companies in the Fund
Pittsburgh, PA VICE PRESIDENT and a Senior Vice President of the Fund's Complex
investment adviser since 1997. Ms.Cunningham
served as a Portfolio Manager and a Vice
President of the investment adviser from 1993
until 1996. Ms.Cunningham is a Chartered
Financial Analyst and received her M.S.B.A. in
Finance from Robert Morris College.
Mary Jo Ochson Birth Date: Mary Jo Ochson is Vice President of the Trust. $0 $0 for the Trust and 7
September12, 1953 Federated Ms.Ochson joined Federated Investors in 1982 and other investment
Investors Tower 1001 Liberty Avenue has been a Senior Portfolio Manager and a Senior companies in the Fund
Pittsburgh, PA VICE PRESIDENT Vice President of the Fund's investment adviser Complex
since 1996. From 1988 through 1995, Ms.Ochson
served as a Portfolio Manager and a Vice
President of the Fund's investment adviser.
Ms.Ochson is a Chartered Financial Analyst and
received her M.B.A. in Finance from the
University of Pittsburgh.
</TABLE>
* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the Investment Company Act of 1940.
# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.
+ Mr. Donahue is the father of J. Christopher Donahue, President of the
Trust.
++ Messrs. Cunningham, Mansfield and Walsh became members of the Board of
Trustees/Directors on January 1, 1999, and July 1, 1999, respectively. They
did not earn any fees for serving the Fund Complex since these fees are
reported as of the end of the last calendar year. They did not receive any
fees as of the fiscal year end of the Trust.
INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund. The Adviser is a wholly owned subsidiary of Federated.
The Adviser shall not be liable to the Trust or any Fund shareholder for any
losses that may be sustained in the purchase, or sale of any security or for
anything done or omitted by it, except acts or omissions involving willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
imposed upon it by its contract with the Trust.
The Adviser must waive the portion of its advisory fee that increases the
Fund's aggregate annual operating expenses above 0.45% of its average daily net
assets. The Fund's operating expenses include the advisory fee but exclude
interest, taxes, brokerage commissions, expenses of registering the Fund and its
shares under federal and state laws, expenses of withholding taxes, and
extraordinary expenses.
Other Related Services
Affiliates of the Adviser may, from time to time, provide certain electronic
equipment and software to institutional customers in order to facilitate the
purchase of Fund Shares offered by the Distributor.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. The Adviser will generally use those who are recognized dealers in
specific portfolio instruments, except when a better price and execution of the
order can be obtained elsewhere. In selecting among firms believed to meet these
criteria, the Adviser may give consideration to those firms which have sold or
are selling Shares of the Fund and other funds distributed by the Distributor
and its affiliates. The Adviser makes
<PAGE>
decisions on portfolio transactions and selects brokers and dealers subject to
review by the Fund's Board. Investment decisions for the Fund are made
independently from those of other accounts managed by the Adviser.
When the Fund and one or more of those accounts invests in, or disposes of, the
same security, available investments or opportunities for sales will be
allocated among the Fund and the account(s) in a manner believed by the Adviser
to be equitable. While the coordination and ability to participate in volume
transactions may benefit the Fund, it is possible that this procedure could
adversely impact the price paid or received and/or the position obtained or
disposed of by the Fund.
ADMINISTRATOR
Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Fund. Federated Services Company provides
these at the following annual rate of the average aggregate daily net assets of
all Federated Funds as specified below:
Maximum Administrative Fee Average Aggregate Daily Net
Assets of the Federated Funds
0.150 of 1% on the first $250million
0.125 of 1% on the next $250million
0.100 of 1% on the next $250million
0.075 of 1% on assets in excess of
$750million
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio. Federated Services Company may voluntarily waive a
portion of its fee and may reimburse the Fund for expenses. Federated Services
Company also provides certain accounting and recordkeeping services with respect
to the Fund's portfolio investments for a fee based on Fund assets, plus
out-of-pocket expenses.
CUSTODIAN
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund. Foreign instruments purchased by the Fund are
held by foreign banks participating in a network coordinated by State Street
Bank.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Services Company, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Fund pays the transfer agent a fee based on the size, type and
number of accounts and transactions made by shareholders.
INDEPENDENT auditor
The independent auditor for the Fund, Ernst & Young LLP, plans and performs its
audit so that it may provide an opinion as to whether the Fund's financial
statements and financial highlights are free of material misstatement.
FEES PAID BY THE FUND FOR SERVICES
For the Year Ended 1998 1997 1996
September30
Advisory Fee Earned $7,602,021 $9,753,169 $11,252,925
Advisory Fee Reduction 1,886,024 2,452,468 2,913,538
Brokerage Commissions 0 0 0
Administrative Fee 1,433,292 1,841,240 2,127,329
Shareholder Services Fee 950,253 N/A N/A
For the Period Ended July31 19991
Advisory Fee Earned $6,001,262
Advisory Fee Reduction 1,523,031
Brokerage Commissions 0
Administrative Fee 1,131,238
Shareholder Services Fee 750,158
1 The Fund has changed its fiscal year-end from September 30 to July 31.
For the fiscal years ended September 30, 1998, 1997 and 1996, fees paid by the
Fund for services are prior to the Fund's reorganization as a portfolio of the
Trust on April 30, 1999.
HOW DOES THE FUND MEASURE PERFORMANCE?
The Fund may advertise Share performance by using the Securities and Exchange
Commission's (SEC) standard method for calculating performance applicable to all
mutual funds. The SEC also permits this standard performance information to be
accompanied by non-standard performance information.
The performance of Shares depends upon such variables as: portfolio quality;
average portfolio maturity; type and value of portfolio securities; changes in
interest rates; changes or differences in the Fund's or any class of Shares'
expenses; and various other factors.
Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.
Average Annual Total Returns and Yield
Total returns given for the one-year, five-year and ten-year periods ended July
31, 1999. Yield and Effective Yield given for the seven-day period ended July
31, 1999.
7 Day Period 1 Year 5 10
Years Years
Total Return 4.65% 5.11% 5.10%
Yield 4.57%
Effective Yield 4.68%
TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.
<PAGE>
The average annual total return for Shares is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of Shares owned at the end of the period by
the NAV per Share at the end of the period. The number of Shares owned at the
end of the period is based on the number of Shares purchased at the beginning of
the period with $1,000, less any applicable sales charge, adjusted over the
period by any additional Shares, assuming the annual reinvestment of all
dividends and distributions.
YIELD and effective yield
The yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated by: determining
the net change in the value of a hypothetical account with a balance of one
Share at the beginning of the base period, with the net change excluding capital
changes but including the value of any additional Shares purchased with
dividends earned from the original one Share and all dividends declared on the
original and any purchased Shares; dividing the net change in the account's
value by the value of the account at the beginning of the base-period to
determine the base-period return; and multiplying the base-period return by
365/7. The effective yield is calculated by compounding the unannualized
base-period return by: adding 1 to the base-period return, raising the sum to
the 365/7th power; and subtracting 1 from the result. The tax-equivalent yield
of Shares is calculated similarly to the yield, but is adjusted to reflect the
taxable yield that Shares would have had to earn to equal the actual yield,
assuming a specific tax rate.
To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in Shares,
the Share performance is lower for shareholders paying those fees.
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
n references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to
certain indices;
n charts, graphs and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred
compounding, dollar-cost averaging and systematic investment;
n discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Fund; and
n information about the mutual fund industry from sources such as the Investment
Company Institute. The Fund may compare its performance, or performance for the
types of securities in which it invests, to a variety of other investments,
including federally insured bank products such as bank savings accounts,
certificates of deposit, and Treasury bills.
The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.
You may use financial publications and/or indices to obtain a more complete
view of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Fund uses in advertising may include:
Lipper Analytical Services, Inc.
Lipper Analytical Services, Inc. ranks funds in various fund categories based on
total return, which assumes the reinvestment of all income dividends and capital
gains distributions, if any.
IBC/Donoghue's Money Fund Report
IBC/Donoghue's Money Fund Report publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publication reports monthly and
12-month-to-date investment results for the same money funds.
Money
Money, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.
Salomon 30-Day Treasury Bill Index
Salomon 30-Day Treasury Bill Index is a weekly quote of the most representative
yields for selected securities, issued by the U.S. Treasury, maturing in 30
days.
WHO IS FEDERATED INVESTORS, INC.?
Federated is dedicated to meeting investor needs by making structured,
straightforward and consistent investment decisions. Federated investment
products have a history of competitive performance and have gained the
confidence of thousands of financial institutions and individual investors.
Federated's disciplined investment selection process is rooted in sound
methodologies backed by fundamental and technical research. At Federated,
success in investment management does not depend solely on the skill of a single
portfolio manager. It is a fusion of individual talents and state-of-the-art
industry tools and resources. Federated's investment process involves teams of
portfolio managers and analysts, and investment decisions are executed by
traders who are dedicated to specific market sectors and who handle trillions of
dollars in annual trading volume.
<PAGE>
Federated Funds overview
Municipal Funds
In the municipal sector, as of December 31, 1998, Federated managed 10 bond
funds with approximately $2.2 billion in assets and 23 money market funds with
approximately $12.5 billion in total assets. In 1976, Federated introduced one
of the first municipal bond mutual funds in the industry and is now one of the
largest institutional buyers of municipal securities. The Funds may quote
statistics from organizations including The Tax Foundation and the National
Taxpayers Union regarding the tax obligations of Americans.
Equity Funds
In the equity sector, Federated has more than 28 years' of experience. As of
December 31, 1998, Federated managed 27 equity funds totaling approximately
$14.9 billion in assets across growth, value, equity income, international,
index and sector (i.e. utility) styles. Federated's value-oriented management
style combines quantitative and qualitative analysis and features a structured,
computer-assisted composite modeling system that was developed in the 1970s.
Corporate Bond Funds
In the corporate bond sector, as of December 31, 1998, Federated managed 9 money
market funds and 15 bond funds with assets approximating $22.8 billion and $7.1
billion, respectively. Federated's corporate bond decision making--based on
intensive, diligent credit analysis--is backed by over 26 years of experience in
the corporate bond sector. In 1972, Federated introduced one of the first
high-yield bond funds in the industry. In 1983, Federated was one of the first
fund managers to participate in the asset backed securities market, a market
totaling more than $209 billion.
Government Funds
In the government sector, as of December 31, 1998, Federated managed 9 mortgage
backed, 5 government/agency and 19 government money market mutual funds, with
assets approximating $5.3 billion, $1.8 billion and $41.6 billion, respectively.
Federated trades approximately $425 million in U.S. government and mortgage
backed securities daily and places approximately $25 billion in repurchase
agreements each day. Federated introduced the first U.S. government fund to
invest in U.S. government bond securities in 1969. Federated has been a major
force in the short- and intermediate-term government markets since 1982 and
currently manages approximately $43.2 billion in government funds within these
maturity ranges.
Money Market Funds
In the money market sector, Federated gained prominence in the mutual fund
industry in 1974 with the creation of the first institutional money market fund.
Simultaneously, the company pioneered the use of the amortized cost method of
accounting for valuing shares of money market funds, a principal means used by
money managers today to value money market fund shares. Other innovations
include the first institutional tax-free money market fund. As of December 31,
1998, Federated managed more than $76.7 billion in assets across 52 money market
funds, including 19 government, 9 prime and 23 municipal with assets
approximating $41.6 billion, $22.8 billion and $12.5 billion, respectively.
The Chief Investment Officers responsible for oversight of the various
investment sectors within Federated are: U.S. equity and high yield--J. Thomas
Madden; U.S. fixed income--William D. Dawson, III; and global equities and fixed
income--Henry A. Frantzen. The Chief Investment Officers are Executive Vice
Presidents of the Federated advisory companies.
Mutual Fund Market
Thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $5 trillion to the more than 7,300 funds available,
according to the Investment Company Institute.
Federated Clients Overview
Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:
Institutional Clients
Federated meets the needs of approximately 900 institutional clients nationwide
by managing and servicing separate accounts and mutual funds for a variety of
purposes, including defined benefit and defined contribution programs, cash
management, and asset/liability management. Institutional clients include
corporations, pension funds, tax exempt entities, foundations/ endowments,
insurance companies, and investment and financial advisers. The marketing effort
to these institutional clients is headed by John B. Fisher, President,
Institutional Sales Division, Federated Securities Corp.
Bank Marketing
Other institutional clients include more than 1,600 banks and trust
organizations. Virtually all of the trust divisions of the top 100 bank holding
companies use Federated Funds in their clients' portfolios. The marketing effort
to trust clients is headed by Timothy C. Pillion, Senior Vice President, Bank
Marketing & Sales.
Broker/Dealers and Bank Broker/Dealer Subsidiaries
Federated Funds are available to consumers through major brokerage firms
nationwide--we have over 2,200 broker/dealer and bank broker/dealer
relationships across the country--supported by more wholesalers than any other
mutual fund distributor. Federated's service to financial professionals and
institutions has earned it high ratings in several surveys performed by DALBAR,
Inc. DALBAR is recognized as the industry benchmark for service quality
measurement. The marketing effort to these firms is headed by James F. Getz,
President, Broker/Dealer Sales Division, Federated Securities Corp.
<PAGE>
ADDRESSES
Trust for u.s. treasury obligations
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
Distributor
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Investment Adviser
Federated Investment Management Company
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Custodian
State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600
Transfer Agent and Dividend Disbursing Agent
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
Independent Auditor
Ernst&Young LLP
200 Clarendon Street
Boston, MA 02116-5072
PART C. OTHER INFORMATION.
Item 23 Exhibits:
(a) (i) Conformed copy of Declaration of Trust of the
Registrant; (12)
(ii) Conformed copy of Amendment No. 1 to the Declaration of
Trust of the Registrant; (12)
(iii) Conformed copy of Amendment No. 2 to the Declaration of
Trust of the Registrant; (17)
(iv) Conformed copy of Amendment No. 3 to the Declaration of
Trust of the Registrant; (17)
(v) Conformed copy of Amendment No. 4 to the Declaration of
Trust of the Registrant; (17)
(vi) Conformed copy of Amendment No. 5 to the Declaration of
Trust of the Registrant; (17)
(vii) Conformed copy of Amendment No. 6 to the Declaration of
Trust of the Registrant; (17)
(viii) Conformed copy of Amendment No. 8 to the Declaration of
Trust of the Registrant; (10)
(ix) Conformed copy of Amendment No. 9 to the Declaration of
Trust of the Registrant; (15)
(x) Conformed copy of Amendment No. 10 to the Declaration of
Trust of the Registrant; (16)
(xi) Conformed copy of Amendment No. 11 to the Declaration of
Trust of the Registrant; (21)
(xii) Conformed copy of Amendment No. 12 to the Declaration of
Trust of the Registrant; (21)
(b) (i) Copy of By-Laws of the Registrant; (12)
(ii) Copy of Amendment No. 1 to By-Laws of the
Registrant; (17)
(iii) Copy of Amendment No. 2 to By-Laws of the Registrant; (17)
(iv) Copy of Amendment No. 3 to By-Laws of the Registrant; (17)
(v) Copy of Amendment No. 4 to By-Laws of the Registrant; (17)
(c) (i) Copy of Specimen Certificate for Shares of Beneficial
Interest of the Registrant; (8)
(ii) Copies of Specimen Certificates for Shares of Beneficial Interest of
Automated Cash ...........Management Trust - Cash II Shares and Institutional
Service Shares; (16)
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed June 1, 1994. (File Nos. 33-31602 and
811-5950).
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 12 on Form N-1A filed February 21, 1995. (File Nos. 33-31602
and 811-5950).
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed September 29, 1995. (File Nos. 33-31602
and 811-5950).
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed September 23, 1996. (File Nos. 33-31602
and 811-5950).
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed September 23, 1997. (File Nos. 33-31602
and 811-5950).
17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 24 on Form N-1A filed September 28, 1998. (File Nos. 33-31602
and 811-5950).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed August 27, 1999. (File Nos. 33-31602
and 811-5950).
<PAGE>
(iii) Copies of Specimen Certificates for Shares of Beneficial Interest of
Treasury Obligations .....Fund - Institutional Capital Shares; (16)
(d) (i) Conformed copy of Investment Advisory Contract of the Registrant; (12)
(ii) Conformed copy of Exhibit A to the Investment Advisory Contract of the
Registrant; (12)
(iii)Conformed copy of Exhibit B to the Investment Advisory Contract of the
Registrant; (12)
(iv) Conformed copy of Exhibit D to the Investment Advisory Contract of the
Registrant; (12)
(v) Conformed copy of Exhibit E to the Investment Advisory Contract of the
Registrant; (12)
(vi) Conformed copy of Exhibit G to the Investment Advisory Contract of the
Registrant; (12)
(vii)Conformed copy of Exhibit H to the Investment Advisory Contract of the
Registrant; (21)
(viii) Conformed copy of Exhibit I to the Investment Advisory Contract of the
Registrant; (21)
(ix) Conformed copy of Exhibit J to the Investment Advisory Contract of the
Registrant; (21)
(x) Conformed copy of Exhibit K to the Investment Advisory Contract of the
Registrant; (21)
(xi) Conformed copy of Exhibit L to the Investment Advisory Contract of the
Registrant; (21)
(xii)Conformed copy of Exhibit M to the Investment Advisory Contract of the
Registrant; (21)
(xiii) Conformed copy of Exhibit N to the Investment Advisory Contract of the
Registrant; (21)
(xiv)Conformed copy of Exhibit O to the Investment Advisory Contract of the
Registrant; (21)
(xv) Conformed copy of Exhibit P to the Investment Advisory Contract of the
Registrant; (21)
(xvi)Conformed copy of Exhibit Q to the Investment Advisory Contract of the
Registrant; (21)
(xvii) Conformed copy of Exhibit R to the Investment Advisory Contract of the
Registrant; (21)
(e) (i) Conformed copy of Distributor's Contract of the Registrant; (7)
(ii) Conformed copy of Exhibit A to the Distributor's Contract of the
Registrant; (21)
(iii)Conformed copy of Exhibit C to the Distributor's Contract of the
Registrant; (21)
(iv) Conformed copy of Exhibit D to the Distributor's Contract of the
Registrant; (15)
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 on Form N-1A filed May 6, 1994. (File Nos. 33-31602 and
811-5950).
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed September 29, 1995. (File Nos. 33-31602
and 811-5950).
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed September 23, 1996. (File Nos. 33-31602
and 811-5950).
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed September 23, 1997. (File Nos. 33-31602
and 811-5950).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed August 27, 1999. (File Nos. 33-31602
and 811-5950).
<PAGE>
(v) Conformed copy of Exhibit E to the Distributor's Contract
of the Registrant; (16)
(vi) Conformed copy of Exhibit F to the Distributor's Contract
of the Registrant; (16)
(vii) Conformed copy of Exhibit G to the Distributor's Contract
of the Registrant; (21)
(viii) Conformed copy of Exhibit H to the Distributor's Contract
of the Registrant; (21)
(ix) Conformed copy of Exhibit I to the Distributor's Contract
of the Registrant; (21)
(x) The Registrant hereby incorporates
the conformed copy of the specimen
Mutual Funds Sales and Service
Agreement; Mutual Funds Service
Agreement; and Plan Trustee/ Mutual
Funds Service Agreement from Item
24(b)(6) of the Cash Trust Series
II Registration Statement on Form
N-1A filed with the Commission on
July 24, 1995.
(File Nos. 33-38550 and 811-6269).
(f) Not applicable;
(g) (i) Conformed copy of Custodian Agreement of the Registrant; (8)
(ii) Conformed copy of Custodian Fee Schedule; (17)
(h) (i) Conformed copy of Amended and Restated Agreement for Fund
Accounting Services,
Administrative Services, Transfer Agency Services and
Custody Services
Procurement; (21)
(ii) The responses described in Item 23(e)(x) are hereby
incorporated by reference.
(iii) Conformed copy of Amended and Restated Shareholder Services
Agreement of the Registrant; (21)
(iv) The Registrant hereby incorporates
by reference the conformed copy of
the Shareholder Services
Sub-Contract between Fidelity and
Federated Shareholder Services from
Item 24(b)(9)(iii) of the Federated
GNMA Trust Registration Statement
on Form N-1A, filed with the
Commission on March 25, 1996 (File
Nos.
2-75670 and 811-3375).
(i) Conformed copy of Opinion and Consent of Counsel as to legality of shares
being registered; (12)
+ All exhibits filed electronically.
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed June 1, 1994. (File Nos. 33-31602 and
811-5950).
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed September 29, 1995. (File Nos. 33-31602
and 811-5950).
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed September 23, 1997. (File Nos. 33-31602
and 811-5950).
17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 24 on Form N-1A filed September 28, 1998. (File Nos. 33-31602
and 811-5950).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed August 27, 1999. (File Nos. 33-31602
and 811-5950).
<PAGE>
(j) (i) Conformed copy of Consent of Arthur Andersen LLP for:
(a) Automated Cash Management Trust; +
(b) Federated Short-Term U.S. Government Trust;
(19)
(c) Government Obligations Fund; (17)
(d) Government Obligations Tax-Managed Fund; (17)
(e) Prime Obligations Fund; (17)
(f) Tax-Free Obligations Fund; (17)
(g) Treasury Obligations Fund; (17)
(h) Trust for Government Cash Reserves; (19)
(ii) Conformed copy of Consent of Ernst &
Young LLP for:
(a) Automated Government Cash Reserves; (21)
(b) Automated Treasury Cash Reserves; (21)
(c) U.S. Treasury Cash Reserves; (21)
(d) Trust for U.S. Treasury Obligations; +
(iii) Conformed copy of Consent of Deloitte & Touche LLP for:
(a) Automated Government Money Trust;+
(b) Federated Master Trust; (19)
(c) Liquid Cash Trust; (20)
(d) Trust for Short-Term U.S. Government
Securities (19)
(k) Not applicable;
(l) Conformed copy of Initial Capital Understanding; (12)
(m) (i) Conformed copy of Distribution Plan of the Registrant; (16)
(ii) Conformed copy of Exhibit A to the Distribution Plan of the
Registrant; (16)
(iii) Conformed copy of Exhibit B to the Distribution Plan of the
Registrant; (21)
(iv) The responses described in Item
23(e)(x) are hereby incorporated by
reference.
(n) The Registrant hereby incorporates the
conformed copy of the specimen Multiple
Class Plan from Item 24(b)(18) of the World
Investment Series, Inc. Registration
Statement on Form N-1A, filed with the
Commission on January 26, 1996. (File Nos.
33-52149 and 811-07141).
+ All exhibits filed electronically.
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed September 29, 1995. (File Nos. 33-31602
and 811-5950).
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed September 23, 1997. (File Nos. 33-31602
and 811-5950).
17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 24 on Form N-1A filed September 28, 1998. (File Nos. 33-31602
and 811-5950).
19. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 26 on Form N-1A filed April 26, 1999. (File Nos. 33-31602 and
811-5950).
20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed May 25, 1999. (File Nos. 33-31602 and
811-5950).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed August 27, 1999. (File Nos. 33-31602
and 811-5950).
<PAGE>
(o) (i) Conformed copy of Power of Attorney of the Registrant; (18)
(ii) Conformed copy of Power of Attorney of
Chief Investment Officer of the Registrant; (18)
(iii) Conformed copy of Power of Attorney of
Treasurer of the Registrant; (18)
Item 24. Persons Controlled by or Under Common Control with the Fund:
None
Item 25. Indemnification: (1)
Item 26. Business and Other Connections of the Investment Adviser:
For a description of the other business of the investment adviser,
see the section entitled "Who Manages the Fund?" in Part A. The
affiliations with the Registrant of four of the Trustees and one
of the Officers of the investment adviser are included in Part B
of this Registration Statement under "Who Manages and Provides
Services to the Fund?" The remaining Trustee of the investment
adviser, his position with the investment adviser, and, in
parentheses, his principal occupation is: Mark D. Olson (Partner,
Wilson, Halbrook & Bayard), 107 W. Market Street, Georgetown,
Delaware 19947.
The remaining Officers of the investment adviser are:
Executive Vice Presidents: William D. Dawson, III
Henry A. Frantzen
J. Thomas Madden
Senior Vice Presidents: Joseph M. Balestrino
David A. Briggs
Drew J. Collins
Jonathan C. Conley
Deborah A. Cunningham
Mark E. Durbiano
Jeffrey A. Kozemchak
Sandra L. McInerney
Susan M. Nason
Mary Jo Ochson
Robert J. Ostrowski
Vice Presidents: Todd A. Abraham
J. Scott Albrecht
Arthur J. Barry
Randall S. Bauer
G. Andrew Bonnewell
Micheal W. Casey
Robert E. Cauley
Alexandre de Bethmann
B. Anthony Delserone, Jr.
Michael P. Donnelly
Linda A. Duessel
Donald T. Ellenberger
Kathleen M. Foody-Malus
Thomas M. Franks
1. Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed October 20, 1989. (File Nos. 33-31602
and 811-5950).
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 25 on Form N-1A filed February 12, 1999. (File Nos. 33-31602 and
811-5950).
<TABLE>
<CAPTION>
<S> <C>
James E. Grefenstette
Marc Halperin
Patricia L. Heagy
Susan R. Hill
William R. Jamison
Constantine J. Kartsonas
Robert M. Kowit
Richard J. Lazarchic
Steven Lehman
Marian R. Marinack
William M. Painter
Jeffrey A. Petro
Keith J. Sabol
Frank Semack
Aash M. Shah
Michael W. Sirianni, Jr.
Christopher Smith
Edward J. Tiedge
Leonardo A. Vila
Paige M. Wilhelm
George B. Wright
Assistant Vice Presidents: Arminda Aviles
Nancy J. Belz
Lee R. Cunningham, II
James H. Davis, II
Jacqueline A. Drastal
Paul S. Drotch
Salvatore A. Esposito
Donna M. Fabiano
Gary E. Farwell
Eamonn G. Folan
John T. Gentry
John W. Harris
Nathan H. Kehm
John C. Kerber
Grant K. McKay
Christopher Matyszewski
Natalie F. Metz
Thomas Mitchell
Joseph M. Natoli
Trent Neville
Ihab Salib
Roberto Sanchez-Dahl, Sr.
James W. Schaub
John Sheehy
John Sidawi
Matthew K. Stapen
Diane Tolby
Timothy G. Trebilcock
Steven J. Wagner
Lori A. Wolff
Secretary: G. Andrew Bonnewell
Treasurer: Thomas R. Donahue
Assistant Secretaries: C. Grant Anderson
Karen M. Brownlee
Leslie K. Ross
Assistant Treasurer: Dennis McAuley, III
</TABLE>
The business address of each of the Officers of the investment
adviser is Federated Investors Tower, 1001 Liberty Avenue,
Pittsburgh, Pennsylvania 15222-3779. These individuals are also
officers of a majority of the investment advisers to the
investment companies in the Federated Fund Complex described in
Part B of this Registration Statement.
Item 27. Principal Underwriters:
(a)......Federated Securities Corp. the Distributor for shares of the Fund,
acts as principal underwriter for the following .................open-end
investment companies, including the Registrant:
Cash Trust Series II; Cash Trust Series, Inc.; CCB Funds; Edward D. Jones & Co.
Daily Passport Cash Trust; Federated Adjustable Rate U.S. Government Fund, Inc.;
Federated American Leaders Fund, Inc.; Federated ARMs Fund; Federated Core
Trust; Federated Equity Funds; Federated Equity Income Fund, Inc.; Federated
Fund for U.S. Government Securities, Inc.; Federated GNMA Trust; Federated
Government Income Securities, Inc.; Federated Government Trust; Federated High
Income Bond Fund, Inc.; Federated High Yield Trust; Federated Income Securities
Trust; Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Insurance Series; Federated Municipal Opportunities Fund, Inc.;
Federated Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated
Short-Term Municipal Trust; Federated Stock and Bond Fund, Inc.; Federated Stock
Trust; Federated Tax-Free Trust; Federated Total Return Series, Inc.; Federated
U.S. Government Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years;
Federated U.S. Government Securities Fund: 2-5 Years; Federated U.S. Government
Securities Fund: 5-10 Years; Federated Utility Fund, Inc.; Fixed Income
Securities, Inc.; ; Hibernia Funds; Independence One Mutual Funds; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.;
Managed Series Trust; Marshall Funds, Inc.; Money Market Management, Inc.; Money
Market Obligations Trust; Money Market Obligations Trust II; Money Market Trust;
Municipal Securities Income Trust; Newpoint Funds; Regions Funds; RIGGS Funds;
SouthTrust Funds; Tax-Free Instruments Trust; The Planters Funds; The Wachovia
Funds; The Wachovia Municipal Funds; Vision Group of Funds, Inc.; World
Investment Series, Inc.; Blanchard Funds; Blanchard Precious Metals Fund, Inc.;
DG Investor Series; High Yield Cash Trust; Investment Series Trust; Star Funds;
Targeted Duration Trust; The Virtus Funds; Trust for Financial Institutions;
Federated Securities Corp. also acts as principal underwriter for the
following closed-end investment company: Liberty
Term Trust, Inc.- 1999.
<TABLE>
<CAPTION>
<S> <C> <C>
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
Richard B. Fisher Chairman, Chief Executive Vice President
Federated Investors Tower Officer, Chief Operating
1001 Liberty Avenue Officer
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Arthur L. Cherry Director --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
John B. Fisher President-Institutional Sales --
Federated Investors Tower and Director
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas R. Donahue Director, Assistant Secretary --
Federated Investors Tower and Treasurer
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer and --
Federated Investors Tower Director
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779
David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Ronald M. Petnuch Senior Vice President,
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Matthew W. Brown Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark Carroll Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
Steven R. Cohen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Robert J. Deuberry Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
Mark A. Gessner Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
G. Tad Gullickson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Dayna C. Haferkamp Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Dennis M. Laffey Vice President,
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
Christopher A. Layton Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael H. Liss Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Amy Michalisyn Vice President,
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Larry Sebbens Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward J. Segura Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Robert W. Bauman Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John T. Glickson Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
Timothy S. Johnson Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Dennis McAuley Assistant Treasurer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
</TABLE>
(c) Not applicable
Item 28. Location of Accounts and Records:
All accounts and records required to be maintained by Section 31(a) of
the Investment Company Act of 1940 and Rules 31a-1 through 31a-3
promulgated thereunder are maintained at one of the following
locations:
<TABLE>
<CAPTION>
<S> <C>
Registrant Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(Notices should be sent to the Agent for Service at the above
address)
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
Federated Shareholder P.O. Box 8600
Services Company Boston, MA 02266-8600
("Transfer Agent and Dividend
Disbursing Agent")
Federated Services Company Federated Investors Tower
("Administrator") 1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Federated Investment Federated Investors Tower
Management Company 1001 Liberty Avenue
("Adviser") Pittsburgh, PA 15222-3779
State Street Bank and P.O. Box 8600
Trust Company Boston, MA 02266-8600
("Custodian")
</TABLE>
Item 29. Management Services: Not applicable.
Item 30. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, MONEY MARKET OBLIGATIONS TRUST,
has duly caused this Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of Pittsburgh
and Commonwealth of Pennsylvania, on the 28th day of September, 1999.
MONEY MARKET OBLIGATIONS TRUST
BY: /s/ Leslie K. Ross
Leslie K. Ross, Assistant Secretary
Attorney in Fact for John F. Donahue
September 28, 1999
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:
<TABLE>
<CAPTION>
<S> <C> <C>
NAME TITLE DATE
By: /s/ Leslie K. Ross
Leslie K. Ross Attorney In Fact September 28, 1999
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
J. Christopher Donahue* President
Richard J. Thomas* Treasurer(Principal Financial and
Accounting Officer)
William D. Dawson, III* Chief Investment Officer
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
John F. Cunningham* Trustee
Lawrence D. Ellis, M.D.* Trustee
Peter E. Madden* Trustee
Charles F. Mansfield, Jr.* Trustee
John E. Murray, Jr., J.D., S.J.D.* Trustee
Marjorie P. Smuts* Trustee
John S. Walsh* Trustee
*By Power of Attorney
</TABLE>
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants we hereby consent to the use in Post-Effective
Amendment No. 35 to Form N-1A Registration Statement of Automated Cash
Management Trust (an investment portfolio of Money Market Obligations Trust, a
Massachusetts business trust) of our report dated September 24, 1999 on the
financial statements as of July 31, 1999, of Automated Cash Management Trust,
included in or made a part of this registration statement.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
September 24, 1999
Exhibit j under Form N-1A
Exhibit 23 under Item 601/ Reg. S-K
INDEPENDENT AUDITORS' CONSENT
To the Board of Trustees and Shareholders of
Automated Government Money Trust
We consent to the sue in Post-Effective Amendment No. 35 to Registration
Statement 811-5950 of Automated Government Money Trust of our report dated
September 17, 1999 appearing in the Prospectus, which is a part of such
Registration Statement, and to the reference to us under the heading "Financial
Highlights" in such Prospectus.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Boston, Massachusetts
September 24, 1999
Exhibit j under Form N-1A
Exhibit 23 under Item 601/ Reg. S-K
Consent of Ernst & Young LLP, Independent Auditors
We consent to the references to our firm under the captions " Financial
Highlights" in the Prospectus and "Independent Auditors" in the Statement of
Additional Information and to the use of our report dated September 17, 1999 in
Post-Effective Amendment Number 35 to the Registration Statement (Form N-1A No.
33-31602) of Trust for U.S. Treasury Obligations dated September 30, 1999.
/s/ Ernst & Young LLP
Ernst & Young LLP
Boston, Massachusetts
September 24, 1999