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
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Pre-Effective Amendment No. ...........................
Post-Effective Amendment No. 29 .......................... X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. 30 ............................................ X
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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) __ on ___________________,
pursuant to paragraph (b) _ 60 days after filing pursuant to paragraph (a) (i)
X on August 31, 1999 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 GOVERNMENT CASH RESERVES
A Portfolio of Money Market Obligations Trust
A money market mutual fund seeking current income with stability of principal
and liquidity by investing only in a portfolio of U.S. government securities
maturing in 397 days or less.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.
Contents
Risk/Return Summary
What are the Fund's Fees and Expenses?
What are the Fund's Investment Strategies?
What are the Principal Securities in Which the Fund Invests?
What are the Specific Risks of Investing in the Fund?
What do Shares Cost?
How is the Fund Sold?
How to Purchase Shares
How to Redeem Shares
Account and Share Information
Who Manages the Fund?
Financial Information
July ____, 1999
<PAGE>
RISK/RETURN SUMMARY
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund's investment objective is current income with stability of principal
and liquidity. 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 and government agency
securities maturing in 397 days or less that pay interest exempt from state
personal income tax. 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?
Although the Fund 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
The Bar Chart and Performance Table below reflect historical performance data
for Automated Government Cash Reserves (the "Former Fund") prior to its
reorganization into the Fund, which is a newly created portfolio of Money Market
Obligations Trust (the "Trust"). On the date of the reorganization, ________,
1999, the Former Fund was dissolved and its net assets (inclusive of liabilities
recorded on the Former Fund's records) were transferred to the Fund.
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of the Former Fund as of the calendar year-end for each of
eight years.
The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 6%.
The `x' axis represents calculation periods from the earliest first full
calendar year end of the Former Fund's start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features eight
distinct vertical bars, each shaded in charcoal, and each visually representing
by height the total return percentages for the calendar year stated directly at
its base. The calculated total return percentage for the Former Fund for each
calendar year is stated directly at the top of each respective bar, for the
calendar years 1991 through 1998. The percentages noted are: 5.60%, 3.29%,
2.71%, 3.81%, 5.45%, 4.89%, 5.04% and 4.96%.
Historically, the Former Fund has maintained a constant $1.00 net asset value
per share. The bar chart shows the variability of the Former Fund's total
returns on a calendar year-end basis.
The Former Fund's Shares were not sold subject to a sales charge (load). The
total returns displayed above are based upon the net asset value.
The Former Fund's total return from January 1, 1999 to March 31, 1999 was 1.08%.
Within the period shown in the Chart, the Former Fund's highest quarterly return
was 1.54% (quarter ended March 31, 1991). Its lowest quarterly return was 0.66%
(quarters ended March 31, 1993 and June 30, 1993).
The following table represents the Fund's Average Annual Total Returns for the
calendar periods ending December 31, 1998.
Average Annual Total Return Table
Calendar Period Fund
1 Year 4.96%
5 Years 4.83%
Start of Performance1 4.80%
1 The Former Fund's start of performance date was February 2, 1990. The Former
Fund's 7-Day Net Yield as of December 31, 1998 was 4.54%.
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
rewards.
<PAGE>
WHAT ARE THE FUND'S FEES AND EXPENSES?
automated government CASH RESERVES
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
<TABLE>
<CAPTION>
<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering None
price)
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase None
price or redemption proceeds, as applicable)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other None
Distributions) (as a percentage of offering price)
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None
Annual Fund Operating Expenses (Before Waiver)(1) 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 0.25% Other
Expenses 0.12% Total Annual Fund Operating Expenses (3) 0.87% 1 Although not
contractually obligated to do so, the adviser expects to waive certain
amounts during the fiscal year ending April 30, 2000. These are shown below
along with the net expenses the Fund expects to actually pay for the fiscal
year ending April 30, 2000.
Total Waiver of Fund Expenses 0.27%
Total Actual Annual Fund Operating Expenses (after waivers) (3) 0.60%
</TABLE>
2 The adviser expects to voluntarily waive a portion of the management fee. The
adviser can terminate this anticipated voluntary waiver at any time. The
management fee paid by the Fund (after the anticipated voluntary waiver) is
expected to be 0.23% for the fiscal year ending April 30, 2000.
3 For the fiscal year ended April 30, 1999, prior to the reorganization of
Automated Government Cash Reserves, the Former Fund, as a portfolio of Money
Market Obligations Trust, the Total Annual Fund Operating Expenses and Total
Actual Annual Fund Operating Expenses (after waivers) were 0.86% and 0.59%,
respectively.
Example
The following 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 operating expenses are before waivers as estimated 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 3 Years 5 Years 10 Years
Fund $89 $278 $482 $1,073
<PAGE>
WHAT ARE THE FUND'S INVESTMENT STRATEGIES?
The Fund invests only in a portfolio of U.S. Treasury and government agency
securities maturing in 397 days or less. 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:
o current U.S. economic activity and the economic outlook ;
o current short-term interest rates;
o the Federal Reserve Board's policies regarding short-term interest rates, and
o 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 lengthen or
shorten 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?
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 Fund
invests in the following types of fixed income securities.
Treasury securities
Treasury securities are direct obligations of the federal government of the
United States.
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.
WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?
Although there are many factors that may affect an investment in the Fund, the
principal risk of investing in a U.S. government money market fund is described
below.
Interest Rate Risk
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 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.
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,
1:00 p.m. (Eastern time) and as of the end of regular 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 markets the Shares described in this prospectus to
institutional investors, such as corporations, unions, hospitals, insurance
companies and municipalities, 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
o Establish an account with the investment professional; and
o Submit your purchase order to the investment professional before 2:00
(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
2:00 (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
o Establish your account with the Fund by submitting a completed New Account
Form; and
o 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 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.
<PAGE>
HOW TO REDEEM SHARES
You should redeem Shares:
o through an investment professional if you purchased Shares through an
investment professional; or
o 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 once you have completed the
appropriate authorization form for telephone transactions.
If you call before 2:00 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 2:00 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:
o Fund Name and Share Class, account number and account registration;
o amount to be redeemed; and
o 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:
o your redemption will be sent to an address other than the address of
record;
o your redemption will be sent to an address of record that was changed
within the last 30 days; or
o 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:
o an electronic transfer to your account at a financial institution that is
an ACH member; or
o 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:
o to allow your purchase to clear;
o during periods of market volatility; or
o 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 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 total 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 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.
FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
(TO BE INSERTED IN THE 485b FILING)
<PAGE>
41
AUTOMATED GOVERNMENT CASH RESERVES
A Portfolio of Money Market Obligations Trust
A Statement of Additional Information (SAI) dated July ___ 1999, is incorporated
by reference into this prospectus. Additional information about the Fund's
investments is contained in the Fund's Annual and Semi-Annual Reports to
shareholders as they become available. The Annual Report discusses market
conditions and investment strategies that significantly affected the Fund's
performance during its last fiscal year. To obtain the SAI, the Annual Report,
the Semi-Annual Report and other information without charge, and make inquires,
call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by visiting or
writing the Public Reference Room of the Securities and Exchange Commission in
Washington, DC 20549-6009 or from the Commission's Internet site at
http://www.sec.gov. You can call 1-800-SEC-0330 for information on the Public
Reference Room's operations and copying charges.
Investment Company Act File No . 811-5950
Cusip ________________
000000-00 (7/99)
Statement of Additional Information
AUTOMATED GOVERNMENT CASH RESERVES
A Portfolio of Money Market Obligations Trust
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Automated Government Cash Reserves
(Fund), dated July ____, 1999.
This SAI incorporates by reference the Fund's Annual Report. Obtain the
prospectus or the Annual Report without charge by calling 1-800-341-7400.
july _____, 1999
Contents
How is the Fund Organized?
Securities in Which the Fund Invests
What do Shares Cost?
How is the Fund Sold?
Subaccounting Services
Redemption in Kind
Massachusetts Partnership Law
Account and Share Information
Tax Information
Who Manages and Provides Services to the Fund?
How Does the Fund Measure Performance?
Who is Federated Investors, Inc.?
Financial Information
Addresses
Cusip ____________
00000000 (7/99)
<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
Trust may offer separate series of shares representing interests in separate
portfolios of securities. The Fund, which was established on December 7, 1989,
was reorganized as a portfolio of the Trust on ______________, 1999. The Fund's
investment adviser is Federated Investment Management Company.
SECURITIES IN WHICH THE FUND INVESTS
In pursuing its investment strategy, the Fund may invest in the following
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.
Treasury Securities
Treasury securities are direct obligations of the federal government of the
United States. 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.
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 from interest bearing bonds 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. 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
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. 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
terminating a 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 Risk
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.
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.
INVESTMENT LIMITATIONS
Diversification
With respect to securities comprising 75% of the value of its total assets, the
Fund will not purchase securities of any one issuer (other than cash; cash
items; securities issued or guaranteed by the government of the United States or
its agencies or instrumentalities and repurchase agreements collateralized by
such U.S. government securities; and securities of other investment companies)
if, as a result, more than 5% of the value of its total assets would be invested
in securities of that issuer, or the Fund would own more than 10% of the
outstanding voting securities of that issuer.
Concentration
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 are not deemed
to constitute an industry.
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.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets except 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
total assets at the time of the pledge.
<PAGE>
Lending Cash or Securities
The Fund will not lend any of its assets, except that it may purchase or hold
U.S. government securities as permitted by its investment objective, policies
and limitations or Declaration of Trust.
Investing in 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 interests 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.
Underwriting Securities
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.
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.
The above limitations cannot be changed unless authorized by the "vote of a
majority of its outstanding voting securities," as defined by the Investment
Company Act. 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 Illiquid Securities
The Fund will not purchase securities for which there is no readily available
market, or enter into repurchase agreements or purchase time deposits maturing
in more than seven days, if immediately after and as a result, the value of such
securities would exceed, in the aggregate, 10% of the Fund's net assets.
Investing in Securities of Other Investment Companies
The Fund will not purchase securities of other investment companies, except as
part of a merger, consolidation, or other acquisition.
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.
For purposes of the above policy concerning concentration, in conformity with an
SEC position, the Fund considers "bank instruments" to be limited to instruments
of domestic banks.
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 Trustees 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 Trustees 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 Trustees 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 Trustees 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.
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 ______________, the following shareholders owned of record, beneficially,
or both, 5% or more of outstanding 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.
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
fifteen Funds and The Federated Fund Complex is comprised of 56 investment
companies, whose investment advisers are affiliated with the Trust's Adviser.
As of ___________, 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. The following symbol (#) denotes
a Member of the Board's Executive Committee, which handles the Board's
responsibilities between its meetings.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name Total
Birth Date Aggregate Compensation From
Address Principal Occupations Compensation Trust and Fund
Position With Trust for Past Five Years From Trust Complex
John F. Donahue*+ Chief Executive Officer and Director or Trustee of $0 $0 for the
Birth Date: July 28, 1924 the Federated Fund Complex; Chairman and Director, Trust and
Federated Investors Tower Federated Investors, Inc.; Chairman and Trustee, 54 other investment
1001 Liberty Avenue Federated Investment Management Company; Chairman and companies
Pittsburgh, PA Director, Federated Investment Counseling and in the Fund Complex
CHAIRMAN AND TRUSTEE Federated Global Investment Management Corp.;
Chairman, Passport Research, Ltd.
Thomas G. Bigley Director or Trustee of the Federated Fund Complex; $18, 351 $113,860.22 for the
Birth Date: February 3, 1934 Director, Member of Executive Committee, Children's Trust and 54 other
15 Old Timber Trail Hospital of Pittsburgh; formerly: Senior Partner, investment
Pittsburgh, PA Ernst & Young LLP; Director, MED 3000 Group, Inc.; companies
TRUSTEE Director, Member of Executive Committee, University in the Fund Complex
of Pittsburgh.
John T. Conroy, Jr. Director or Trustee of the Federated Fund Complex; $20,189 $125,264.48 for the
Birth Date: June 23, 1937 President, Investment Properties Corporation; Senior Trust and 54 other
Wood/IPC Commercial Dept. Vice President, John R. Wood and Associates, Inc., investment
John R. Wood Associates, Inc. Realtors; Partner or Trustee in private real estate companies
Realtors ventures in Southwest Florida; formerly: President, in the Fund Complex
3255 Tamiami Trail North Naples Property Management, Inc. and Northgate
Naples, FL Village Development Corporation.
TRUSTEE
John F. Cunningham++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: March 5, 1943 Complex; Chairman, President and Chief Executive and 26 other
353 El Brillo Way Officer, Cunningham & Co., Inc. ; Trustee Associate, investment
Palm Beach, FL Boston College; Director, EMC Corporation; formerly: companies in the
TRUSTEE Director, Redgate Communications. Fund Complex
Retired: 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 Federated Fund Complex; $18,351 $113,860.22 for the
Birth Date: October 11, 1932 Professor of Medicine, University of Pittsburgh; Trust and 54 other
3471 Fifth Avenue Medical Director, University of Pittsburgh Medical investment
Suite 1111 Center - Downtown; Hematologist, Oncologist, and companies
Pittsburgh, PA Internist, University of Pittsburgh Medical Center; in the Fund Complex
TRUSTEE Member, National Board of Trustees, Leukemia Society
of America.
Peter E. Madden Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
Birth Date: March 16, 1942 formerly: Representative, Commonwealth of Trust and 54 other
One Royal Palm Way Massachusetts General Court; President, State Street investment
100 Royal Palm Way Bank and Trust Company and State Street Corporation. companies
Palm Beach, FL in the Fund Complex
TRUSTEE Retired: Director, VISA USA and VISA International;
Chairman and Director, Massachusetts Bankers
Association; Director, Depository Trust Corporation.
Charles F. Mansfield, Jr.++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: April 10, 1945 Complex; Management Consultant. and 26 other
80 South Road investment
Westhampton Beach, NY TRUSTEE Retired: Chief Executive Officer, PBTC International companies in the
Bank; 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., Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
S.J.D. President, Law Professor, Duquesne University; Trust and 54 other
Birth Date: December 20, 1932 Consulting Partner, Mollica & Murray. investment
President, Duquesne University companies
Pittsburgh, PA Retired: Dean and Professor of Law, University of in the Fund Complex
TRUSTEE Pittsburgh School of Law; Dean and Professor of Law,
Villanova University School of Law.
Marjorie P. Smuts Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
Birth Date: June 21, 1935 Public Relations/Marketing/Conference Planning. Trust and 54 other
4905 Bayard Street investment
Pittsburgh, PA Retired: National Spokesperson, Aluminum Company of companies in the
TRUSTEE America; business owner. Fund Complex
John S. Walsh++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: November 28, 1957 Complex; President and Director, Heat Wagon, Inc.; and 23 other
2007 Sherwood Drive President and Director, Manufacturers Products, Inc.; investment
Valparaiso, IN President, Portable Heater Parts, a division of companies in the
TRUSTEE Manufacturers Products, Inc.; Director, Walsh & Fund Complex
Kelly, Inc.; formerly, Vice President, Walsh & Kelly,
Inc.
J. Christopher Donahue+ President or Executive Vice President of the $0 $0 for the Trust
Birth Date: April 11, 1949 Federated Fund Complex; Director or Trustee of some and 16 other
Federated Investors Tower of the Funds in the Federated Fund Complex; President investment
1001 Liberty Avenue and Director, Federated Investors, Inc.; President companies in the
Pittsburgh, PA and Trustee, Federated Investment Management Company; Fund Complex
PRESIDENT President and Director, Federated Investment
Counseling and Federated Global Investment
Management Corp.; President, Passport
Research, Ltd.; Trustee, Federated
Shareholder Services Company; Director,
Federated Services Company.
<PAGE>
Edward C. Gonzales Trustee or Director of some of the Funds in the $0 $0 for the Trust and
Birth Date: October 22, 1930 Federated Fund Complex; President, Executive Vice 1 other investment
Federated Investors Tower President and Treasurer of some of the Funds in the companies in the
1001 Liberty Avenue Federated Fund Complex; Vice Chairman, Federated Fund Complex
Pittsburgh, PA Investors, Inc.; Vice President, Federated Investment
EXECUTIVE VICE PRESIDENT 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 Executive Vice President and Secretary of the $0 $0 for the Trust
Birth Date: October 26, 1938 Federated Fund Complex; Executive Vice President, and 54 other
Federated Investors Tower Secretary and Director, Federated Investors, Inc.; investment
1001 Liberty Avenue Trustee, Federated Investment Management Company; companies in the
Pittsburgh, PA Director, Federated Investment Counseling and Fund Complex
EXECUTIVE VICE PRESIDENT AND Federated Global Investment Management Corp.;
SECRETARY Director, Federated Services Company; Director,
Federated Securities Corp.
Richard J. Thomas Treasurer of the Federated Fund Complex; Vice $0 $0 for the Trust
Birth Date: June 17, 1954 President - Funds Financial Services Division, and 54 other
Federated Investors Tower Federated Investors, Inc.; Formerly: various investment
1001 Liberty Avenue management positions within Funds Financial Services companies in the
Pittsburgh, PA Division of Federated Investors, Inc. Fund Complex
TREASURER
William D. Dawson, III Chief Investment Officer of this Fund and various $0 $0 for the Trust
Birth Date: March 3, 1949 other Funds in the Federated Fund Complex; Executive and 41 other
Federated Investors Tower Vice President, Federated Investment Counseling, investment
1001 Liberty Avenue Federated Global Investment Management Corp., companies in the
Pittsburgh, PA Federated Investment Management Company and Passport Fund Complex
CHIEF INVESTMENT OFFICER 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.
Richard B. Fisher President or Vice President of some of the Funds in $0 $0 for the Trust
Birth Date: May 17, 1923 the Federated Fund Complex; Director or Trustee of and 6 other
Federated Investors Tower some of the Funds in the Federated Fund Complex; investment
1001 Liberty Avenue Executive Vice President, Federated Investors, Inc.; companies in the
Pittsburgh, PA Chairman and Director, Federated Securities Corp. Fund Complex
VICE PRESIDENT
Deborah A. Cunningham Deborah A. Cunningham is Vice President of the Trust. $0 $0 for the Trust
Birth Date: September 15, Ms. Cunningham joined Federated Investors in 1981 and 6 other
1959 and has been a Senior Portfolio Manager and a Senior investment
Federated Investors Tower Vice President of the Fund's investment adviser since companies in the
1001 Liberty Avenue 1997. Ms. Cunningham served as a Portfolio Manager Fund Complex
Pittsburgh, PA and a Vice President of the investment adviser from
VICE PRESIDENT 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 President of the Trust. Ms. $0 $0 for the Trust
Birth Date: September 12, Ochson joined Federated Investors in 1982 and has and 7 other
1953 been a Senior Portfolio Manager and a Senior Vice investment
Federated Investors Tower President of the Fund's investment adviser since companies in the
1001 Liberty Avenue 1996. From 1988 through 1995, Ms. Ochson served as a Fund Complex
Pittsburgh, PA Portfolio Manager and a Vice President of the Fund's
VICE PRESIDENT investment adviser. Ms. Ochson is a Chartered
Financial Analyst and received her M.B.A. in Finance
from the University of Pittsburgh.
Susan R. Hill Susan R. Hill is Vice President of the Trust. Ms. $0 $0 for the Trust
Birth Date: June 20, 1963 Hill joined Federated Investors in 1990 and has been and 9 other
Federated Investors Tower a Portfolio Manager since 1993 and a Vice President investment
1001 Liberty Avenue of the Fund's investment adviser since 1997. Ms. companies in the
Pittsburgh, PA Hill was a Portfolio Manager and an Assistant Vice Fund Complex
VICE PRESIDENT President of the investment adviser from 1994 until
1997. Ms. Hill is a Chartered Financial Analyst and
received an M.S. in Industrial Administration from
Carnegie Mellon University.
</TABLE>
+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.
Research Services
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 $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 PUBLIC ACCOUNTANTs
Ernst & Young LLP is the independent public accountant for the Fund.
FEES PAID BY THE FUND FOR SERVICES
For the Year ended April 30 1999 1998 1997
Advisory Fee Earned $ $3,,249,526 $3,065,198
Advisory Fee Reduction $ $1,779,134 $1,792,822
Brokerage Commissions $ $0 $0
Administrative Fee $ $490,403 $463,179
Shareholder Services Fee $ --- ---
For the fiscal years ended April 30, 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 ________, 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.
Unless otherwise stated, any quoted Share performance reflects the effect of
non-recurring charges, such as maximum sales charges, which, if excluded, would
increase the total return and yield. 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 Start of Performance periods
ended April 30, 1999.
Yield and Effective Yield given for the 7-day period ended April 30, 1999.
Performance of the Fund shown is prior to its reorganization as a portfolio of
the Trust on _______, 1999.
7 Day Period 1 Year 5 Years Start of Performance on February
15, 1990
Total Return
Yield
Effective Yield
- -------------------------------------------------------------------------------
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
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:
o........references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;
o 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;
o 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 Funds; and
o 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:
oLipper 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.
oIBC/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.
oMoney, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.
oSalomon 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.
oDiscount Corporation of New York 30-Day Federal Agencies is a weekly quote of
the average daily offering price for selected federal agency issues maturing in
30 days.
<PAGE>
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.
FINANCIAL INFORMATION
The Financial Statements for the Fund for the fiscal year ended April 30, 1999,
are incorporated herein by reference to the Annual Report to Shareholders of
Automated Government Cash Reserves dated April 30, 1999.
<PAGE>
ADDRESSES
automated government cash reserves
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
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072
Prospectus
AUTOMATED TREASURY CASH RESERVES
A Portfolio of Money Market Obligations Trust
A money market mutual fund seeking current income consistent with stability of
principal and liquidity by investing only in a portfolio of U.S. Treasury
securities maturing in 397 days or less.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.
Contents
Risk/Return Summary
What are the Fund's Fees and Expenses?
What are the Fund's Investment Strategies?
What are the Principal Securities in Which the Fund Invests?
What are the Specific Risks of Investing in the Fund?
What do Shares Cost?
How is the Fund Sold?
How to Purchase Shares
How to Redeem Shares
Account and Share Information
Who Manages the Fund?
Financial Information
july ____, 1999
<PAGE>
RISK/RETURN SUMMARY
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund's investment objective is current income consistent with stability of
principal and liquidity. 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 that pay interest exempt from state personal income tax. 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?
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
The Bar Chart and Performance Table below reflect historical performance data
for Automated Treasury Cash Reserves (the "Former Fund") prior to its
reorganization into the Fund, which is a newly created portfolio of Money Market
Obligations Trust (the "Trust"). On the date of the reorganization, ________,
1999, the Former Fund was dissolved and its net assets (inclusive of liabilities
recorded on the Former Fund's records) were transferred to the Fund.
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of the Former Fund as of the calendar year-end for each of
seven years.
The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 6%.
The `x' axis represents calculation periods from the earliest first full
calendar year end of the Former Fund's start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features seven
distinct vertical bars, each shaded in charcoal, and each visually representing
by height the total return percentages for the calendar year stated directly at
its base. The calculated total return percentage for the Former Fund for each
calendar year is stated directly at the top of each respective bar, for the
calendar years 1992 through 1998. The percentages noted are: 3.12%, 2.60%,
3.52%, 5.22%, 4.74%, 4.75% and 4.65%.
Historically, the Former Fund has maintained a constant $1.00 net asset value
per share. The bar chart shows the variability of the Former Fund's total
returns on a calendar year-end basis.
The Former Fund's Shares were not sold subject to a sales charge (load). The
total returns displayed above are based upon the net asset value.
The Former Fund's total return from January 1, 1999 to March 31, 1999 was 0.99%.
Within the period shown in the Chart, the Former Fund's highest quarterly return
was 1.32% (quarter ended June 30, 1995). Its lowest quarterly return was 0.61%
(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 4.65%
5 Years 4.58%
Start of Performance1 4.12%
1 The Former Fund's start of performance date was August 9, 1991. The Former
Fund's 7-Day Net Yield as of December 31, 1998 was 3.94%.
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
rewards.
<PAGE>
WHAT ARE THE FUND'S FEES AND EXPENSES?
automated TREASURY CASH RESERVES
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>
<S> <C>
Shareholder Fees
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering None
price)
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase None
price or redemption proceeds, as applicable)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other None
Distributions) (as a percentage of offering price)
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None
</TABLE>
Annual Fund Operating Expenses (Before Waivers) (1) 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 0.13% Total Annual Fund Operating Expenses (4) 0.88% 1 Although not
contractually obligated to do so, the adviser and shareholder services
provider expect to waive certain amounts during the fiscal year ending April
30, 2000. These are shown below along with the net expenses the Fund expects
to actually pay for the fiscal year ending April 30, 2000.
Total Waiver of Fund Expenses 0.29%
Total Actual Annual Fund Operating Expenses (after waivers) 0.59%
2 The adviser expects to voluntarily waive a portion of the management fee. The
adviser can terminate this anticipated voluntary waiver at any time. The
management fee paid by the Fund (after the anticipated voluntary waiver) is
expected to be 0.24% for the fiscal year ended April 30, 2000.
3 The shareholder services provider expects to voluntarily reduce a portion of
the Fund's shareholder services fee. The shareholder services provider can
termiminate this anticipated voluntary reduction at any time. The shareholder
services fee paid by the Fund (after the anticipated voluntary reduction) is
expected to be 0.22% for the fiscal year ending April 30, 2000.
4 For the fiscal year ended April 30, 1999, prior to the reorganization of
Automated Treasury Cash Reserves, the Former Fund, as a portfolio of Money
Market Obligations Trust, the Total Annual Fund Operating Expenses and Total
Actual Annual Fund Operating Expenses (after waivers) were 0.89% and 0.59%,
respectively.
Example
The following 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 Shares operating expenses are before waivers as estimated in
the table and remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
Fund 1 Year 3 Years 5 Years 10 Years
$90 $281 $488 $1,084
<PAGE>
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. 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:
o........current U.S. economic activity and the economic outlook,
o current short-term interest rates,
o the Federal Reserve Board's policies regarding short-term interest rates,
and
o 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 lengthen or
shorten 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. In addition, the U.S. Treasury must repay the principal
amount of the security, normally within a specified time.
WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?
Although there are many factors that may affect an investment in the Fund, the
principal risk of investing in a U.S. Treasury money market fund is described
below.
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.
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 1:00 p.m. (Eastern time) and as of the end of regular 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 markets the Shares described in this prospectus to
institutional investors, such as banks, fiduciaries, custodians of public funds,
corporations, unions, hospitals, insurance companies and municipalities, 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
o Establish an account with the investment professional; and
o Submit your purchase order to the investment professional before 2:00
(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
2:00 (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
o Establish your account with the Fund by submitting a completed New Account
Form; and
o 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 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.
<PAGE>
HOW TO REDEEM SHARES
You should redeem Shares:
o through an investment professional if you purchased Shares through an
investment professional; or
o 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 once you have completed the
appropriate authorization form for telephone transactions.
If you call before 2:00 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 2:00 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:
o Fund Name and Share Class, account number and account registration;
o amount to be redeemed; and
o 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:
o your redemption will be sent to an address other than the address of
record;
o your redemption will be sent to an address of record that was changed
within the last 30 days; or
o 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:
o an electronic transfer to your account at a financial institution that is
an ACH member; or
o 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:
o to allow your purchase to clear;
o during periods of market volatility; or
o 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.
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.
<PAGE>
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 total 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. 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.
FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
(TO BE INSERTED AT THE 485b FILING)
<PAGE>
58
AUTOMATED TREASURY CASH RESERVES
A Portfolio of Money Market Obligations Trust
A Statement of Additional Information (SAI) dated July ___ 1999, is incorporated
by reference into this prospectus. Additional information about the Fund's
investments is contained in the Fund's Annual and Semi-Annual Reports to
shareholders as they become available. The Annual Report discusses market
conditions and investment strategies that significantly affected the Fund's
performance during its last fiscal year. To obtain the SAI, the Annual Report,
the Semi-Annual Report and other information without charge, and make inquires,
call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by visiting or
writing the Public Reference Room of the Securities and Exchange Commission in
Washington, DC 20549-6009 or from the Commission's Internet site at
http://www.sec.gov. You can call 1-800-SEC-0330 for information on the Public
Reference Room's operations and copying charges.
Investment Company Act File No . 811-5950
Cusip ________________
000000-00 (0/99)
Statement of Additional Information
AUTOMATED TREASURY CASH RESERVES
A Portfolio of Money Market Obligations Trust
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Automated Treasury Cash Reserves
(Fund), dated July ____ 1999.
This SAI incorporates by reference the Fund's Annual Report. Obtain the
prospectus or the Annual Report without charge by calling 1-800-341-7400.
JULY ____ 1999
Contents
How is the Fund Organized?
Securities in Which the Fund Invests
Subaccounting Services
Redemption in Kind
Massachusetts Partnership Law
Account and Share Information
Tax Information
Who Manages and Provides Services to the Fund?
How Does the Fund Measure Performance?
Who is Federated Investors, Inc.?
Financial Information
Addresses
Cusip ____________
00000000 (7/99)
<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
Trust may offer separate series of shares representing interests in separate
portfolios of securities. The Fund, which was established on December 7, 1989,
was reorganized as a portfolio of the Trust on July ____, 1999. The Fund's
investment adviser is Federated Investment Management Company.
SECURITIES IN WHICH THE FUND INVESTS
In pursuing its investment strategy, the Fund may invest in the following
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.
Treasury Securities
Treasury securities are direct obligations of the federal government of
the United States. 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 from interest bearing bonds 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. 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.
<PAGE>
Special Transactions
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. 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
terminating a 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 Risk
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.
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.
INVESTMENT LIMITATIONS
Diversification
With respect to securities comprising 75% of the value of its total assets, the
Fund will not purchase securities of any one issuer (other than cash; cash
items; securities issued or guaranteed by the government of the United States or
its agencies or instrumentalities and repurchase agreements collateralized by
such U.S. government securities; and securities of other investment companies)
if, as a result, more than 5% of the value of its total assets would be invested
in securities of that issuer, or the Fund would own more than 10% of the
outstanding voting securities of that issuer.
Concentration
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 are not deemed
to constitute an industry.
<PAGE>
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.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets except 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
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, as permitted by its investment objective, policies,
and limitations or Declaration of Trust.
Investing in 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 interests 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.
Underwriting Securities
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.
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.
The above limitations cannot be changed unless authorized by the "vote of a
majority of its outstanding voting securities," as defined by the Investment
Company Act. 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 Illiquid Securities
The Fund will not purchase securities for which there is no readily available
market, or enter into repurchase agreements or purchase time deposits maturing
in more than seven days, if immediately after and as a result, the value of such
securities would exceed, in the aggregate, 10% of the Fund's net assets.
Investing in Securities of Other Investment Companies
The Fund will not purchase securities of other investment companies, except as
part of a merger, consolidation, or other acquisition.
For purposes of the above policy concerning concentration, in conformity with an
SEC position, the Fund considers "bank instruments" to be limited to instruments
of domestic banks.
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.
<PAGE>
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 Trustees 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 Trustees 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 Trustees 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 Trustees 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.
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 ___________, the following shareholders owned of record beneficially, or
both, 5% or more of outstanding 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.
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
fifteen Funds and the Federated Fund Complex is comprised of 56 investment
companies, whose investment advisers are affiliated with the Trust's Adviser.
As of ___________, 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. The following symbol (#) denotes
a Member of the Board's Executive Committee, which handles the Board's
responsibilities between its meetings.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name Total
Birth Date Aggregate Compensation From
Address Principal Occupations Compensation Trust and Fund
Position With Trust for Past Five Years From Trust Complex
John F. Donahue*+ Chief Executive Officer and Director or Trustee of $0 $0 for the
Birth Date: July 28, 1924 the Federated Fund Complex; Chairman and Director, Trust and
Federated Investors Tower Federated Investors, Inc.; Chairman and Trustee, 54 other investment
1001 Liberty Avenue Federated Investment Management Company; Chairman and companies
Pittsburgh, PA Director, Federated Investment Counseling and in the Fund Complex
CHAIRMAN AND TRUSTEE Federated Global Investment Management Corp.;
Chairman, Passport Research, Ltd.
Thomas G. Bigley Director or Trustee of the Federated Fund Complex; $18, 351 $113,860.22 for the
Birth Date: February 3, 1934 Director, Member of Executive Committee, Children's Trust and 54 other
15 Old Timber Trail Hospital of Pittsburgh; formerly: Senior Partner, investment
Pittsburgh, PA Ernst & Young LLP; Director, MED 3000 Group, Inc.; companies
TRUSTEE Director, Member of Executive Committee, University in the Fund Complex
of Pittsburgh.
John T. Conroy, Jr. Director or Trustee of the Federated Fund Complex; $20,189 $125,264.48 for the
Birth Date: June 23, 1937 President, Investment Properties Corporation; Senior Trust and 54 other
Wood/IPC Commercial Dept. Vice President, John R. Wood and Associates, Inc., investment
John R. Wood Associates, Inc. Realtors; Partner or Trustee in private real estate companies
Realtors ventures in Southwest Florida; formerly: President, in the Fund Complex
3255 Tamiami Trail North Naples Property Management, Inc. and Northgate
Naples, FL Village Development Corporation.
TRUSTEE
John F. Cunningham++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: March 5, 1943 Complex; Chairman, President and Chief Executive and 26 other
353 El Brillo Way Officer, Cunningham & Co., Inc. ; Trustee Associate, investment
Palm Beach, FL Boston College; Director, EMC Corporation; formerly: companies in the
TRUSTEE Director, Redgate Communications. Fund Complex
Retired: 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 Federated Fund Complex; $18,351 $113,860.22 for the
Birth Date: October 11, 1932 Professor of Medicine, University of Pittsburgh; Trust and 54 other
3471 Fifth Avenue Medical Director, University of Pittsburgh Medical investment
Suite 1111 Center - Downtown; Hematologist, Oncologist, and companies
Pittsburgh, PA Internist, University of Pittsburgh Medical Center; in the Fund Complex
TRUSTEE Member, National Board of Trustees, Leukemia Society
of America.
Peter E. Madden Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
Birth Date: March 16, 1942 formerly: Representative, Commonwealth of Trust and 54 other
One Royal Palm Way Massachusetts General Court; President, State Street investment
100 Royal Palm Way Bank and Trust Company and State Street Corporation. companies
Palm Beach, FL in the Fund Complex
TRUSTEE Retired: Director, VISA USA and VISA International;
Chairman and Director, Massachusetts Bankers
Association; Director, Depository Trust Corporation.
Charles F. Mansfield, Jr.++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: April 10, 1945 Complex; Management Consultant. and 26 other
80 South Road investment
Westhampton Beach, NY TRUSTEE Retired: Chief Executive Officer, PBTC International companies in the
Bank; 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., Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
S.J.D. President, Law Professor, Duquesne University; Trust and 54 other
Birth Date: December 20, 1932 Consulting Partner, Mollica & Murray. investment
President, Duquesne University companies
Pittsburgh, PA Retired: Dean and Professor of Law, University of in the Fund Complex
TRUSTEE Pittsburgh School of Law; Dean and Professor of Law,
Villanova University School of Law.
Marjorie P. Smuts Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
Birth Date: June 21, 1935 Public Relations/Marketing/Conference Planning. Trust and 54 other
4905 Bayard Street investment
Pittsburgh, PA Retired: National Spokesperson, Aluminum Company of companies in the
TRUSTEE America; business owner. Fund Complex
John S. Walsh++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: November 28, 1957 Complex; President and Director, Heat Wagon, Inc.; and 23 other
2007 Sherwood Drive President and Director, Manufacturers Products, Inc.; investment
Valparaiso, IN President, Portable Heater Parts, a division of companies in the
TRUSTEE Manufacturers Products, Inc.; Director, Walsh & Fund Complex
Kelly, Inc.; formerly, Vice President, Walsh & Kelly,
Inc.
J. Christopher Donahue+ President or Executive Vice President of the $0 $0 for the Trust
Birth Date: April 11, 1949 Federated Fund Complex; Director or Trustee of some and 16 other
Federated Investors Tower of the Funds in the Federated Fund Complex; President investment
1001 Liberty Avenue and Director, Federated Investors, Inc.; President companies in the
Pittsburgh, PA and Trustee, Federated Investment Management Company; Fund Complex
PRESIDENT President and Director, Federated Investment
Counseling and Federated Global Investment
Management Corp.; President, Passport
Research, Ltd.; Trustee, Federated
Shareholder Services Company; Director,
Federated Services Company.
<PAGE>
Edward C. Gonzales Trustee or Director of some of the Funds in the $0 $0 for the Trust and
Birth Date: October 22, 1930 Federated Fund Complex; President, Executive Vice 1 other investment
Federated Investors Tower President and Treasurer of some of the Funds in the companies in the
1001 Liberty Avenue Federated Fund Complex; Vice Chairman, Federated Fund Complex
Pittsburgh, PA Investors, Inc.; Vice President, Federated Investment
EXECUTIVE VICE PRESIDENT 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 Executive Vice President and Secretary of the $0 $0 for the Trust
Birth Date: October 26, 1938 Federated Fund Complex; Executive Vice President, and 54 other
Federated Investors Tower Secretary, and Director, Federated Investors, Inc.; investment
1001 Liberty Avenue Trustee, Federated Investment Management Company; companies in the
Pittsburgh, PA Director, Federated Investment Counseling and Fund Complex
EXECUTIVE VICE PRESIDENT AND Federated Global Investment Management Corp.;
SECRETARY Director, Federated Services Company; Director,
Federated Securities Corp.
Richard J. Thomas Treasurer of the Federated Fund Complex; Vice $0 $0 for the Trust
Birth Date: June 17, 1954 President - Funds Financial Services Division, and 54 other
Federated Investors Tower Federated Investors, Inc.; Formerly: various investment
1001 Liberty Avenue management positions within Funds Financial Services companies in the
Pittsburgh, PA Division of Federated Investors, Inc. Fund Complex
TREASURER
William D. Dawson, III Chief Investment Officer of this Fund and various $0 $0 for the Trust
Birth Date: March 3, 1949 other Funds in the Federated Fund Complex; Executive and 41 other
Federated Investors Tower Vice President, Federated Investment Counseling, investment
1001 Liberty Avenue Federated Global Investment Management Corp., companies in the
Pittsburgh, PA Federated Investment Management Company and Passport Fund Complex
CHIEF INVESTMENT OFFICER 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.
Richard B. Fisher President or Vice President of some of the Funds in $0 $0 for the Trust
Birth Date: May 17, 1923 the Federated Fund Complex; Director or Trustee of and 6 other
Federated Investors Tower some of the Funds in the Federated Fund Complex; investment
1001 Liberty Avenue Executive Vice President, Federated Investors, Inc.; companies in the
Pittsburgh, PA Chairman and Director, Federated Securities Corp. Fund Complex
VICE PRESIDENT
Deborah A. Cunningham Deborah A. Cunningham is Vice President of the Trust. $0 $0 for the Trust
Birth Date: September 15, Ms. Cunningham joined Federated Investors in 1981 and 6 other
1959 and has been a Senior Portfolio Manager and a Senior investment
Federated Investors Tower Vice President of the Fund's investment adviser since companies in the
1001 Liberty Avenue 1997. Ms. Cunningham served as a Portfolio Manager Fund Complex
Pittsburgh, PA and a Vice President of the investment adviser from
VICE PRESIDENT 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 President of the Trust. Ms. $0 $0 for the Trust
Birth Date: September 12, Ochson joined Federated Investors in 1982 and has and 7 other
1953 been a Senior Portfolio Manager and a Senior Vice investment
Federated Investors Tower President of the Fund's investment adviser since companies in the
1001 Liberty Avenue 1996. From 1988 through 1995, Ms. Ochson served as a Fund Complex
Pittsburgh, PA Portfolio Manager and a Vice President of the Fund's
VICE PRESIDENT investment adviser. Ms. Ochson is a Chartered
Financial Analyst and received her M.B.A. in Finance
from the University of Pittsburgh.
Susan R. Hill Susan R. Hill is Vice President of the Trust. Ms. $0 $0 for the Trust
Birth Date: June 20, 1963 Hill joined Federated Investors in 1990 and has been and 9 other
Federated Investors Tower a Portfolio Manager since 1993 and a Vice President investment
1001 Liberty Avenue of the Fund's investment adviser since 1997. Ms. companies in the
Pittsburgh, PA Hill was a Portfolio Manager and an Assistant Vice Fund Complex
VICE PRESIDENT President of the investment adviser from 1994 until
1997. Ms. Hill is a Chartered Financial Analyst and
received an M.S. in Industrial Administration from
Carnegie Mellon University.
</TABLE>
+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.
Research Services
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 $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 PUBLIC ACCOUNTANTs
Ernst & Young LLP is the independent public accountant for the Fund.
FEES PAID BY THE FUND FOR SERVICES
For the Year ended April 30 1999 1998 1997
Advisory Fee Earned $ $1,464,856 $1,348,133
Advisory Fee Reduction $ $788,338 $832,502
Brokerage Commissions $ $0 $0
Administrative Fee $ $221,062 $203,712
Shareholder Services Fee $ --- ---
For the fiscal years ended April 30, 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 ________, 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.
Unless otherwise stated, any quoted Share performance reflects the effect of
non-recurring charges, such as maximum sales charges, which, if excluded, would
increase the total return and yield. 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.
<PAGE>
Average Annual Total Returns and Yield
Total returns given for the one-year, five-year and Start of Performance periods
ended April 30, 1999.
Yield and Effective Yield given for the 7-day period ended April 30, 1999.
Performance of the Fund shown is prior to its reorganization as a portfolio of
the Trust on _______, 1999.
7 Day Period 1 Year 5 Years Start of Performance on August
9, 1991
Total Return
Yield
Effective Yield
- -------------------------------------------------------------------------------
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
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:
o........references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;
o 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;
o 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 Funds; and
o 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:
oLipper 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.
oIBC/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.
oMoney, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.
oSalomon 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.
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.
<PAGE>
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.
FINANCIAL INFORMATION
The Financial Statements for the Fund for the fiscal year ended April 30, 1999,
are incorporated herein by reference to the Annual Report to Shareholders of
Automated Treasury Cash Reserves dated April 30, 1999.
<PAGE>
69
ADDRESSES
automated treasury cash reserves
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
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072
Prospectus
U.S. TREASURY CASH RESERVES
A Portfolio of Money Market Obligations Trust
Institutional shares
A money market mutual fund seeking current income consistent with stability of
principal and liquidity by investing only in a portfolio of U.S. Treasury
securities maturing in 397 days or less.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.
Contents
Risk/Return Summary
What are the Fund's Fees and Expenses?
What are the Fund's Investment Strategies?
What are the Principal Securities in Which the Fund Invests?
What are the Specific Risks of Investing in the Fund?
What do Shares Cost?
How is the Fund Sold?
How to Purchase Shares
How to Redeem Shares
Account and Share Information
Who Manages the Fund?
Financial Information
july ____ 1999
<PAGE>
RISK/RETURN SUMMARY
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund's investment objective is current income consistent with stability of
principal and liquidity. 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 that pay interest exempt from state personal income tax. 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?
Although the Fund 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
The Bar Chart and Performance Table below reflect historical performance data
for Institutional Shares of U.S. Treasury Cash Reserves (the "Former Fund")
prior to its reorganization into the Fund, which is a newly created portfolio of
Money Market Obligations Trust (the "Trust"). On the date of the reorganization,
________, 1999, the Former Fund was dissolved and its net assets (inclusive of
liabilities recorded on the Former Fund's records) were transferred to the Fund.
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of the Former Fund's Institutional Shares as of the
calendar year-end for each of seven years.
The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 6%.
The `x' axis represents calculation periods from the earliest first full
calendar year end of the Former Fund's start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features seven
distinct vertical bars, each shaded in charcoal, and each visually representing
by height the total return percentages for the calendar year stated directly at
its base. The calculated total return percentage for the Former Fund's
Institutional Shares for each calendar year is stated directly at the top of
each respective bar, for the calendar years 1992 through 1998. The percentages
noted are: 3.46%, 2.91%, 3.89%, 5.60%, 5.13%, 5.18% and 5.05%.
Historically, the Former Fund has maintained a constant $1.00 net asset value
per share. The bar chart shows the variability of the Former Fund's
Institutional Shares total returns on a calendar year-end basis.
The Former Fund's Institutional Shares were not sold subject to a sales charge
(load). The total returns displayed above are based upon the net asset value.
The Former Fund's Institutional Shares total return from January 1, 1999 to
March 31, 1999 was 1.08%.
Within the period shown in the Chart, the Former Fund's Institutional Shares
highest quarterly return was 1.41% (quarter ended June 30, 1995). Its lowest
quarterly return was 0.70% (quarter ended June 30, 1995).
Average Annual Total Return Table
The following table represents the Fund's Institutional Shares Average Annual
Total Returns for the calendar periods ending December 31, 1998.
Calendar Period Institutional
Shares
1 Year 5.05%
5 Years 4.79%
Start of Performance1 4.52%
1 The Former Fund's Institutional Shares start of performance date was June 11,
1991. The Former Fund's Institutional Shares 7-Day Net Yield as of December 31,
1998 was 4.32%.
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 so that you can analyze
whether the Fund's investment risks are balanced by its potential rewards.
<PAGE>
WHAT ARE THE FUND'S FEES AND EXPENSES?
u.S. TREASURY CASH RESERVES-Institutional shares
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 Shares.
<TABLE>
<CAPTION>
<S> <C>
Shareholder Fees
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering None
price)
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase None
price or redemption proceeds, as applicable)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other None
Distributions) (as a percentage of offering price)
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None
</TABLE>
Annual Fund Operating Expenses (Before Waivers)(1) Expenses That are Deducted
From Fund Assets (as a percentage of average net assets) Management Fee (2)
0.40% Distribution (12b-1) Fee None Shareholder Services Fee (3) 0.25% Other
Expenses 0.11% Total Annual Fund Operating Expenses (4) 0.76% 1 Although not
contractually obligated to do so, the adviser and shareholder services
provider expect to waive certain amounts during the fiscal year ending April
30, 2000. These are shown below along with the net expenses the Fund expects
to actually pay for the fiscal year ending April 30, 2000.
Total Waivers of Fund Expenses 0.55%
Total Actual Annual Fund Operating Expenses (after waivers) 0.21%
2 The adviser expects to voluntarily waive a portion of the management fee. The
adviser can terminate this anticipated voluntary waiver at any time. The
management fee paid by the Fund (after the anticipated voluntary waiver) is
expected to be 0.10% for the fiscal year ending April 30, 2000.
3 The shareholder services provider does not expect to accrue or charge its
Shareholder Services Fee of 0.25% during the year ending April 30, 2000. The
shareholder services provider can accrue its fee, and thereby terminate this
voluntary waiver at any time at its sole discretion. The Shareholder Services
Fee paid (after the anticipated voluntary waiver) is expected to be 0.00% for
the fiscal year ending April 30, 2000.
4 For the fiscal year ended April 30, 1999, prior to the reorganization of U.S.
Treasury Cash Reserves, the Former Fund, as a portfolio of Money Market
Obligations Trust, the Total Annual Fund Operating Expenses and Total Actual
Annual Fund Operating Expenses (after waivers) for the Former Fund's
Institutional Shares were 0.75% and 0.20%, respectively.
Example
The following Example is intended to help you compare the cost of investing in
the Fund's Institutional Shares with the cost of investing in other mutual
funds.
The Example assumes that you invest $10,000 in the Fund's Institutional 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 Shares operating expenses are before
waivers as estimated 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 3 Years 5 Years 10 Years
Institutional Shares $78 $243 $422 $942
<PAGE>
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. 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:
o........current U.S. economic activity and the economic outlook,
o current short-term interest rates,
o the Federal Reserve Board's policies regarding short-term interest rates,
and
o 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 lengthen or
shorten 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. In addition, the U.S. Treasury must repay the principal
amount of the security, normally within a specified time.
WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?
Although there are many factors that may affect an investment in the Fund, the
principal risk of investing in a U.S. Treasury money market fund is described
below.
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.
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 1:00 p.m. (Eastern time) and as of the end of regular 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 offers two share classes: Institutional Shares and Institutional
Service Shares, each representing interests in a single portfolio of securities.
This prospectus relates only to Institutional 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 markets the Shares described in this prospectus to
institutional investors, such as banks, fiduciaries, custodians of public funds,
corporations, unions, hospitals, insurance companies and municipalities, 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
o Establish an account with the investment professional; and
o Submit your purchase order to the investment professional before 2:00
(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
2:00 (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
o Establish your account with the Fund by submitting a completed New Account
Form; and
o 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 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:
o through an investment professional if you purchased Shares through an
investment professional; or
o 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 once you have completed the
appropriate authorization form for telephone transactions.
If you call before 2:00 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 2:00 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:
o Fund Name and Share Class, account number and account registration;
o amount to be redeemed; and
o 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:
o your redemption will be sent to an address other than the address of
record;
o your redemption will be sent to an address of record that was changed
within the last 30 days; or
o 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:
o an electronic transfer to your account at a financial institution that is
an ACH member; or
o 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:
o to allow your purchase to clear;
o during periods of market volatility; or
o 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.
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, 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 total 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. 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 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.
FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
(TO BE INSERTED AT THE 485b FILING)
<PAGE>
81
U.S. TREASURY CASH RESERVES
A Portfolio of Money Market Obligations Trust
institutional shares
A Statement of Additional Information (SAI) dated July ___ 1999, is incorporated
by reference into this prospectus. Additional information about the Fund's
investments is contained in the Fund's Annual and Semi-Annual Reports to
shareholders as they become available. The Annual Report discusses market
conditions and investment strategies that significantly affected the Fund's
performance during its last fiscal year. To obtain the SAI, the Annual Report,
the Semi-Annual Report and other information without charge, and make inquires,
call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by visiting or
writing the Public Reference Room of the Securities and Exchange Commission in
Washington, DC 20549-6009 or from the Commission's Internet site at
http://www.sec.gov. You can call 1-800-SEC-0330 for information on the Public
Reference Room's operations and copying charges.
Investment Company Act File No. 811-5950
Cusip ________________
000000-00 (0/99)
Prospectus
U.S. TREASURY CASH RESERVES
A Portfolio of Money Market Obligations Trust
Institutional service shares
A money market mutual fund seeking current income consistent with stability of
principal and liquidity by investing only in a portfolio of U.S. Treasury
securities maturing in 397 days or less.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.
Contents
Risk/Return Summary
What are the Fund's Fees and Expenses?
What are the Fund's Investment Strategies?
What are the Principal Securities in Which the Fund Invests?
What are the Specific Risks of Investing in the Fund?
What do Shares Cost?
How is the Fund Sold?
How to Purchase Shares
How to Redeem Shares
Account and Share Information
Who Manages the Fund?
Financial Information
july ___ 1999
<PAGE>
RISK/RETURN SUMMARY
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund's investment objective is current income consistent with stability of
principal and liquidity. 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 that pay interest exempt from state personal income tax. 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?
Although the Fund 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
The Bar Chart and Performance Table below reflect historical performance data
for Institutional Service Shares of U.S. Treasury Cash Reserves (the "Former
Fund") prior to its reorganization into the Fund, which is a newly created
portfolio of Money Market Obligations Trust (the "Trust"). On the date of the
reorganization, ________, 1999, the Former Fund was dissolved and its net assets
(inclusive of liabilities recorded on the Former Fund's records) were
transferred to the Fund.
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of the Former Fund's Institutional Service Shares as of the
calendar year-end for each of four years.
The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 6%.
The `x' axis represents calculation periods from the earliest first full
calendar year end of the Former Fund's start of business through the calendar
year ended December 31, 1998. The light gray shaded chart features four distinct
vertical bars, each shaded in charcoal, and each visually representing by height
the total return percentages for the calendar year stated directly at its base.
The calculated total return percentage for the Former Fund's Institutional
Service Shares for each calendar year is stated directly at the top of each
respective bar, for the calendar years 1995 through 1998. The percentages noted
are: 5.34%, 4.86%, 4.91% and 4.79%.
Historically, the Former Fund has maintained a constant $1.00 net asset value
per share. The bar chart shows the variability of the Former Fund's
Institutional Service Shares total returns on a calendar year-end basis.
The Former Fund's Institutional Service Shares were not sold subject to a sales
charge (load). The total returns displayed above are based upon the net asset
value.
The Former Fund's Institutional Service Shares total return from January 1, 1999
to March 31, 1999 was 1.02%.
Within the period shown in the Chart, the Former Fund's Institutional Service
Shares highest quarterly return was 1.35% (quarter ended June 30, 1995). Its
lowest quarterly return was 1.08% (quarter ended December 31, 1998).
Average Annual Total Return Table
The following table represents the Fund's Institutional Service Shares Average
Annual Total Returns for the calendar periods ending December 31, 1998.
Calendar Period Institutional Service
Shares
1 Year 4.79%
Start of Performance1 4.97%
1 The Former Fund's Institutional Service Shares start of performance date was
October 30, 1994. The Former Fund's Institutional Service Shares 7-Day Net Yield
as of December 31, 1998 was 4.07%.
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 so that you can analyze
whether the Fund's investment risks are balanced by its potential rewards.
<PAGE>
WHAT ARE THE FUND'S FEES AND EXPENSES?
u.S. TREASURY CASH RESERVES-Institutional service shares
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>
<S> <C>
Shareholder Fees
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering None
price)
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase None
price or redemption proceeds, as applicable)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other None
Distributions) (as a percentage of offering price)
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None
</TABLE>
Annual Fund Operating Expenses (Before Waivers)(1) Expenses That are Deducted
From Fund Assets (as a percentage of average net assets) Management Fee (2)
0.40% Distribution (12b-1) Fee (3) 0.25% Shareholder Services Fee 0.25% Other
Expenses 0.11% Total Annual Fund Operating Expenses (4) 1.01% 1.Although not
contractually obligated to do so, the adviser and distributor expect to waive
certain amounts during the fiscal year ending April 30, 2000. These are shown
below along with the net expenses the Fund expects to actually pay for the
fiscal year ending April 30, 2000.
Total Waivers of Fund Expenses 0.55%
Total Actual Annual Fund Operating Expenses (after waivers) 0.46%
2 The adviser expects to voluntarily waive a portion of the management fee. The
adviser can terminate this anticipated voluntary waiver at any time. The
management fee paid by the Fund (after the anticipated voluntary waiver) is
expected to be 0.10% for the fiscal year ending April 30, 2000.
3 The distributor does not expect to accrue or charge its Distribution (12b-1)
Fee of 0.25% during the year ending April 30, 2000. The distributor can
accrue its fee, and thereby terminate this anticipated voluntary waiver of
the Distribution (12b-1) Fee at any time at its sole discretion. The
Distribution (12b-1) Fee paid ( after the anticipated voluntary waiver) by
the Fund is expected to be 0.00% for the fiscal year ending April 30, 2000.
4 For the fiscal year ended April 30, 1999, prior to the reorganization of U.S.
Treasury Cash Reserves, the Former Fund, as a portfolio of Money Market
Obligations Trust, the Total Annual Fund Operating Expenses and Total Actual
Annual Fund Operating Expenses (after waivers) for Institutional Service
Shares was 1.00% and 0.45%, respectively.
Example
The following 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 estimated 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 3 Years 5 Years 10 Years
Institutional Service Shares $103 $322 $558 $1,236
<PAGE>
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. 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:
o........current U.S. economic activity and the economic outlook,
o current short-term interest rates,
o the Federal Reserve Board's policies regarding short-term interest rates,
and
o 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 lengthen or
shorten 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. In addition, the U.S. Treasury must repay the principal
amount of the security, normally within a specified time.
WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?
Although there are many factors that may affect an investment in the Fund, the
principal risk of investing in a U.S. Treasury money market fund is described
below.
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.
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 1:00 p.m. (Eastern time) and as of the end of regular 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 offers two share classes: Institutional Service Shares and
Institutional 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 class.
The Fund's Distributor markets the Shares described in this prospectus to
accounts for which financial institutions act in an agency or fiduciary
capacity, 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 Institutional Service 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
o Establish an account with the investment professional; and
o Submit your purchase order to the investment professional before 2:00
(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
2:00 (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
o Establish your account with the Fund by submitting a completed New Account
Form; and
o 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 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.
<PAGE>
HOW TO REDEEM SHARES
You should redeem Shares:
o through an investment professional if you purchased Shares through an
investment professional; or
o 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 once you have completed the
appropriate authorization form for telephone transactions.
If you call before 2:00 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 2:00 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:
o Fund Name and Share Class, account number and account registration;
o amount to be redeemed; and
o signatures of all Shareholders exactly as registered.
Call your investment professional or the Fund if you need special instructions.
<PAGE>
Signature Guarantees Signatures must be guaranteed if:
o your redemption will be sent to an address other than the address of record;
o your redemption will be sent to an address of record that was changed within
the last 30 days; or
o 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:
o an electronic transfer to your account at a financial institution that is an
ACH member; or
o 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:
o to allow your purchase to clear;
o during periods of market volatility; or
o 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.
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.
<PAGE>
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, 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 total 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. 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 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.
FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
(TO BE INSERTED AT THE 485b FILING)
<PAGE>
99
U.S. TREASURY CASH RESERVES
A Portfolio of Money Market Obligations Trust
institutional service shares
A Statement of Additional Information (SAI) dated July ___ 1999, is incorporated
by reference into this prospectus. Additional information about the Fund's
investments is contained in the Fund's Annual and Semi-Annual Reports to
shareholders as they become available. The Annual Report discusses market
conditions and investment strategies that significantly affected the Fund's
performance during its last fiscal year. To obtain the SAI, the Annual Report,
the Semi-Annual Report and other information without charge, and make inquires,
call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by visiting or
writing the Public Reference Room of the Securities and Exchange Commission in
Washington, DC 20549-6009 or from the Commission's Internet site at
http://www.sec.gov. You can call 1-800-SEC-0330 for information on the Public
Reference Room's operations and copying charges.
Investment Company Act File No. 811-5950
Cusip ________________
000000-00 (0/99)
Statement of Additional Information
U.S. TREASURY CASH RESERVES
A Portfolio of Money Market Obligations Trust
institutional service shares
Institutional shares
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectuses for U.S. Treasury Cash Reserves (Fund)
Institutional Service Shares and Institutional Shares, dated July ___, 1999.
This SAI incorporates by reference the Fund's Annual Report. Obtain the
prospectuses or the Annual Report without charge by calling 1-800-341-7400.
july ____ 1999
Contents
How is the Fund Organized?
Securities in Which the Fund Invests
What do Shares Cost?
How is the Fund Sold?
Subaccounting Services
Redemption in Kind
Massachusetts Partnership Law
Account and Share Information
Tax Information
Who Manages and Provides Services to the Fund?
How Does the Fund Measure Performance?
Who is Federated Investors, Inc.?
Financial Information
Addresses
Cusip ____________
00000000 (7/99)
<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
Trust may offer separate series of shares representing interests in separate
portfolios of securities. The Fund, which was established on December 7, 1989,
was reorganized as a portfolio of the Trust on July ____ 1999. The Fund's
investment adviser is Federated Investment Management Company.
SECURITIES IN WHICH THE FUND INVESTS
In pursuing its investment strategy, the Fund may invest in the following
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.
Treasury Securities
Treasury securities are direct obligations of the federal government of the
United States. 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 from interest bearing bonds 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. 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.
<PAGE>
Special Transactions
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. 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
terminating a 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 Risk
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. 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.
INVESTMENT LIMITATIONS
Diversification
With respect to securities comprising 75% of the value of its total assets, the
Fund will not purchase securities of any one issuer (other than cash; cash
items; securities issued or guaranteed by the government of the United States or
its agencies or instrumentalities and repurchase agreements collateralized by
such U.S. government securities; and securities of other investment companies)
if, as a result, more than 5% of the value of its total assets would be invested
in securities of that issuer, or the Fund would own more than 10% of the
outstanding voting securities of that issuer.
Concentration
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 are not deemed
to constitute an industry.
<PAGE>
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.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any 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 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 as permitted by its investment objective, policies and
limitations or Declaration of Trust.
Investing in 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 interests 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.
Underwriting Securities
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.
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.
The above limitations cannot be changed unless authorized by the "vote of a
majority of its outstanding voting securities," as defined by the Investment
Company Act. 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 Illiquid Securities
The Fund will not purchase securities for which there is no readily available
market, or enter into repurchase agreements or purchase time deposits maturing
in more than seven days, if immediately after and as a result, the value of such
securities would exceed, in the aggregate, 10% of the Fund's net assets.
Investing in Securities of Other Investment Companies
The Fund will not acquire securities of other investment companies, except as
part of a merger, consolidation, or other acquisition.
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.
For purposes of the above policy concerning concentration, in conformity with an
SEC position, the Fund considers "bank instruments" to be limited to instruments
of domestic banks.
<PAGE>
Regulatory Compliance
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in each
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 Trustees 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 Trustees 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 Trustees 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 Trustees 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.
WHAT DO SHARES COST?
The NAV for each class of Shares may differ due to the variance in daily net
income realized by each class. Such variance will reflect only accrued net
income to which the shareholders of a particular class are entitled.
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
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.
For some classes of Shares, 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 ___________, the following shareholders owned of record, beneficially, or
both, 5% or more of outstanding 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.
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
fifteen Funds and The Federated Fund Complex is comprised of 56 investment
companies, whose investment advisers are affiliated with the Trust's Adviser.
As of ___________, 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. The following symbol (#) denotes
a Member of the Board's Executive Committee, which handles the Board's
responsibilities between its meetings.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name Total
Birth Date Aggregate Compensation From
Address Principal Occupations Compensation Trust and Fund
Position With Trust for Past Five Years From Trust Complex
John F. Donahue*+ Chief Executive Officer and Director or Trustee of $0 $0 for the
Birth Date: July 28, 1924 the Federated Fund Complex; Chairman and Director, Trust and
Federated Investors Tower Federated Investors, Inc.; Chairman and Trustee, 54 other investment
1001 Liberty Avenue Federated Investment Management Company; Chairman and companies
Pittsburgh, PA Director, Federated Investment Counseling and in the Fund Complex
CHAIRMAN AND TRUSTEE Federated Global Investment Management Corp.;
Chairman, Passport Research, Ltd.
Thomas G. Bigley Director or Trustee of the Federated Fund Complex; $18, 351 $113,860.22 for the
Birth Date: February 3, 1934 Director, Member of Executive Committee, Children's Trust and 54 other
15 Old Timber Trail Hospital of Pittsburgh; formerly: Senior Partner, investment
Pittsburgh, PA Ernst & Young LLP; Director, MED 3000 Group, Inc.; companies
TRUSTEE Director, Member of Executive Committee, University in the Fund Complex
of Pittsburgh.
John T. Conroy, Jr. Director or Trustee of the Federated Fund Complex; $20,189 $125,264.48 for the
Birth Date: June 23, 1937 President, Investment Properties Corporation; Senior Trust and 54 other
Wood/IPC Commercial Dept. Vice President, John R. Wood and Associates, Inc., investment
John R. Wood Associates, Inc. Realtors; Partner or Trustee in private real estate companies
Realtors ventures in Southwest Florida; formerly: President, in the Fund Complex
3255 Tamiami Trail North Naples Property Management, Inc. and Northgate
Naples, FL Village Development Corporation.
TRUSTEE
John F. Cunningham++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: March 5, 1943 Complex; Chairman, President and Chief Executive and 26 other
353 El Brillo Way Officer, Cunningham & Co., Inc. ; Trustee Associate, investment
Palm Beach, FL Boston College; Director, EMC Corporation; formerly: companies in the
TRUSTEE Director, Redgate Communications. Fund Complex
Retired: 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 Federated Fund Complex; $18,351 $113,860.22 for the
Birth Date: October 11, 1932 Professor of Medicine, University of Pittsburgh; Trust and 54 other
3471 Fifth Avenue Medical Director, University of Pittsburgh Medical investment
Suite 1111 Center - Downtown; Hematologist, Oncologist, and companies
Pittsburgh, PA Internist, University of Pittsburgh Medical Center; in the Fund Complex
TRUSTEE Member, National Board of Trustees, Leukemia Society
of America.
Peter E. Madden Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
Birth Date: March 16, 1942 formerly: Representative, Commonwealth of Trust and 54 other
One Royal Palm Way Massachusetts General Court; President, State Street investment
100 Royal Palm Way Bank and Trust Company and State Street Corporation. companies
Palm Beach, FL in the Fund Complex
TRUSTEE Retired: Director, VISA USA and VISA International;
Chairman and Director, Massachusetts Bankers
Association; Director, Depository Trust Corporation.
Charles F. Mansfield, Jr.++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: April 10, 1945 Complex; Management Consultant. and 26 other
80 South Road investment
Westhampton Beach, NY TRUSTEE Retired: Chief Executive Officer, PBTC International companies in the
Bank; 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., Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
S.J.D. President, Law Professor, Duquesne University; Trust and 54 other
Birth Date: December 20, 1932 Consulting Partner, Mollica & Murray. investment
President, Duquesne University companies
Pittsburgh, PA Retired: Dean and Professor of Law, University of in the Fund Complex
TRUSTEE Pittsburgh School of Law; Dean and Professor of Law,
Villanova University School of Law.
Marjorie P. Smuts Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
Birth Date: June 21, 1935 Public Relations/Marketing/Conference Planning. Trust and 54 other
4905 Bayard Street investment
Pittsburgh, PA Retired: National Spokesperson, Aluminum Company of companies in the
TRUSTEE America; business owner. Fund Complex
John S. Walsh++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: November 28, 1957 Complex; President and Director, Heat Wagon, Inc.; and 23 other
2007 Sherwood Drive President and Director, Manufacturers Products, Inc.; investment
Valparaiso, IN President, Portable Heater Parts, a division of companies in the
TRUSTEE Manufacturers Products, Inc.; Director, Walsh & Fund Complex
Kelly, Inc.; formerly, Vice President, Walsh & Kelly,
Inc.
J. Christopher Donahue+ President or Executive Vice President of the $0 $0 for the Trust
Birth Date: April 11, 1949 Federated Fund Complex; Director or Trustee of some and 16 other
Federated Investors Tower of the Funds in the Federated Fund Complex; President investment
1001 Liberty Avenue and Director, Federated Investors, Inc.; President companies in the
Pittsburgh, PA and Trustee, Federated Investment Management Company; Fund Complex
PRESIDENT President and Director, Federated Investment
Counseling and Federated Global Investment
Management Corp.; President, Passport
Research, Ltd.; Trustee, Federated
Shareholder Services Company; Director,
Federated Services Company.
<PAGE>
Edward C. Gonzales Trustee or Director of some of the Funds in the $0 $0 for the Trust and
Birth Date: October 22, 1930 Federated Fund Complex; President, Executive Vice 1 other investment
Federated Investors Tower President and Treasurer of some of the Funds in the companies in the
1001 Liberty Avenue Federated Fund Complex; Vice Chairman, Federated Fund Complex
Pittsburgh, PA Investors, Inc.; Vice President, Federated Investment
EXECUTIVE VICE PRESIDENT 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 Executive Vice President and Secretary of the $0 $0 for the Trust
Birth Date: October 26, 1938 Federated Fund Complex; Executive Vice President, and 54 other
Federated Investors Tower Secretary, and Director, Federated Investors, Inc.; investment
1001 Liberty Avenue Trustee, Federated Investment Management Company; companies in the
Pittsburgh, PA Director, Federated Investment Counseling and Fund Complex
EXECUTIVE VICE PRESIDENT AND Federated Global Investment Management Corp.;
SECRETARY Director, Federated Services Company; Director,
Federated Securities Corp.
Richard J. Thomas Treasurer of the Federated Fund Complex; Vice $0 $0 for the Trust
Birth Date: June 17, 1954 President - Funds Financial Services Division, and 54 other
Federated Investors Tower Federated Investors, Inc.; Formerly: various investment
1001 Liberty Avenue management positions within Funds Financial Services companies in the
Pittsburgh, PA Division of Federated Investors, Inc. Fund Complex
TREASURER
William D. Dawson, III Chief Investment Officer of this Fund and various $0 $0 for the Trust
Birth Date: March 3, 1949 other Funds in the Federated Fund Complex; Executive and 41 other
Federated Investors Tower Vice President, Federated Investment Counseling, investment
1001 Liberty Avenue Federated Global Investment Management Corp., companies in the
Pittsburgh, PA Federated Investment Management Company and Passport Fund Complex
CHIEF INVESTMENT OFFICER 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.
Richard B. Fisher President or Vice President of some of the Funds in $0 $0 for the Trust
Birth Date: May 17, 1923 the Federated Fund Complex; Director or Trustee of and 6 other
Federated Investors Tower some of the Funds in the Federated Fund Complex; investment
1001 Liberty Avenue Executive Vice President, Federated Investors, Inc.; companies in the
Pittsburgh, PA Chairman and Director, Federated Securities Corp. Fund Complex
VICE PRESIDENT
Deborah A. Cunningham Deborah A. Cunningham is Vice President of the Trust. $0 $0 for the Trust
Birth Date: September 15, Ms. Cunningham joined Federated Investors in 1981 and 6 other
1959 and has been a Senior Portfolio Manager and a Senior investment
Federated Investors Tower Vice President of the Fund's investment adviser since companies in the
1001 Liberty Avenue 1997. Ms. Cunningham served as a Portfolio Manager Fund Complex
Pittsburgh, PA and a Vice President of the investment adviser from
VICE PRESIDENT 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 President of the Trust. Ms. $0 $0 for the Trust
Birth Date: September 12, Ochson joined Federated Investors in 1982 and has and 7 other
1953 been a Senior Portfolio Manager and a Senior Vice investment
Federated Investors Tower President of the Fund's investment adviser since companies in the
1001 Liberty Avenue 1996. From 1988 through 1995, Ms. Ochson served as a Fund Complex
Pittsburgh, PA Portfolio Manager and a Vice President of the Fund's
VICE PRESIDENT investment adviser. Ms. Ochson is a Chartered
Financial Analyst and received her M.B.A. in Finance
from the University of Pittsburgh.
Susan R. Hill Susan R. Hill is Vice President of the Trust. Ms. $0 $0 for the Trust
Birth Date: June 20, 1963 Hill joined Federated Investors in 1990 and has been and 9 other
Federated Investors Tower a Portfolio Manager since 1993 and a Vice President investment
1001 Liberty Avenue of the Fund's investment adviser since 1997. Ms. companies in the
Pittsburgh, PA Hill was a Portfolio Manager and an Assistant Vice Fund Complex
VICE PRESIDENT President of the investment adviser from 1994 until
1997. Ms. Hill is a Chartered Financial Analyst and
received an M.S. in Industrial Administration from
Carnegie Mellon University.
</TABLE>
+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.
Research Services
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 $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 PUBLIC ACCOUNTANTs
Ernst & Young LLP is the independent public accountant for the Fund.
<PAGE>
FEES PAID BY THE FUND FOR SERVICES
For the Year ended April 30 1999 1998 1997
Advisory Fee Earned $ $7,087,604 $5,563,438
Advisory Fee Reduction $ $5,493,748 $4,378,520
Brokerage Commissions $ $0 $0
Administrative Fee $ $1,336,995 $1,050,793
12b-1 Fee
Institutional Service Shares $ ---- ----
Shareholder Services Fee
Institutional Service Shares $ ---- ----
Institutional Shares $ ---- ----
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.
For the fiscal years ended April 30, 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 ________, 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.
Unless otherwise stated, any quoted Share performance reflects the effect of
non-recurring charges, such as maximum sales charges, which, if excluded, would
increase the total return and yield. 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 Start of Performance periods
ended April 30, 1999.
Yield and Effective Yield given for the 7-day period ended April 30, 1999.
Performance of the Fund shown is prior to its reorganization as a portfolio of
the Trust on _______, 1999.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
7 Day Period 1 Year 5 Years Start of Performance on December 15,
1994
Institutional Service
Shares
Total Return
Yield
Effective Yield
7 Day Period 1 Year 5 Years Start of Performance on June 11, 1991
Institutional Shares
Total Return
Yield
Effective Yield
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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
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:
o references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;
o 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;
o 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 Funds; and
o 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:
oLipper 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.
oIBC/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.
oMoney, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.
oSalomon 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.
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.
<PAGE>
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.
FINANCIAL INFORMATION
The Financial Statements for the Fund for the fiscal year ended April 30, 1999,
are incorporated herein by reference to the Annual Report to Shareholders of
U.S. Treasury Cash Reserves dated April 30, 1999.
<PAGE>
115
ADDRESSES
u.s. treasury cash reserves
Institutional Service Shares
Institutional 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 Public Accountants
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072
Prospectus
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
A Portfolio of Money Market Obligations Trust
Class A Shares
class b 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
U.S. government securities maturing in 397 days or less.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus, and any representation to the contrary is a criminal offense.
Contents
Risk/Return Summary
What are the Fund's Fees and Expenses?
What are the Fund's Investment Strategies?
What are the Principal Securities in Which the Fund Invests?
What are the Specific Risks of Investing in the Fund?
What do Shares Cost?
How is the Fund Sold?
How to Purchase Shares
How to Redeem and Exchange Shares
Account and Share Information
Who Manages the Fund?
Financial Information
July ____ 1999
<PAGE>
RISK/RETURN SUMMARY
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
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 at least 65% of its total assets in a portfolio of U.S.
Treasury and government agency securities maturing in 397 days or less. These
investments include repurchase agreements collateralized fully by U.S. Treasury
and government agency securities.
The average maturity of the Fund's portfolio will be 90 days or less.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
Although the Fund 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
The Bar Chart and Performance Table below reflect historical performance data
for Class A Shares of Liberty U.S. Government Money Market Trust (the "Former
Fund") prior to its reorganization into the Fund, which is a newly created
portfolio of Money Market Obligations Trust (the "Trust"). On the date of the
reorganization, _____________ 1999, the Former Fund was dissolved and its net
assets (inclusive of liabilities recorded on the Former Fund's records) were
transferred to the Fund The graphic presentation displayed here consists of a
bar chart representing the annual total returns of the Former Fund's Class A
Shares as of the calendar year-end for each of ten years. The `y' axis reflects
the "% Total Return" beginning with "0" and increasing in increments of 1% up to
9%. The `x' axis represents calculation periods for the last ten calendar years
of the Former Fund, beginning with the earliest year.. The light gray shaded
chart features ten distinct vertical bars, each shaded in charcoal, and each
visually representing by height the total return percentages for the calendar
year stated directly at its base. The calculated total return percentage for the
Former Fund's Class A Shares for each calendar year is stated directly at the
top of each respective bar, for the calendar years 1989 through 1998. The
percentages noted are: 8.50%, 7.48%, 5.29%, 3.03%, 2.32%, 3.30%, 5.00%, 4.44%,
4.61% and 4.56%.
Historically, the Former Fund has maintained a constant $1.00 net asset value.
The bar chart shows the variability of the Former Fund's Class A Shares total
returns on a calendar year-end basis. The Former Fund's Class A Shares were not
sold subject to a sales charge (load). The total returns shown above are based
upon the net asset value. The Former Fund's Class A Shares total return from
January 1, 1999 to March 31, 1999 was 0.98% Within the period shown in the
Chart, the Former Fund's Class A Shares highest quarterly return was 2.17%
(quarter ended June 30, 1989). Its lowest quarterly return was 0.51% (quarter
ended March 31, 1993).
Average Annual Total Return Table
The following table represents the Former Fund's Class A Shares and Class B
Shares Average Annual Total Returns for the calendar periods ending
December 31, 1998.
Calendar Period Class A Shares Class B Shares
1 Year 4.56% -1.90%
5 Years 4.38% N/A
10 Years 4.84% N/A
Start of Performance1 6.77% 3.31%
1The Former Fund's Class A Shares and Class B Shares start of performance dates
were June 6, 1980 and December 17, 1994, respectively. The Former Fund's Class A
Shares and Class B Shares 7-Day Net Yields as of December 31, 1998 were 4.10%
and 3.20%, respectively.
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 so that you can analyze
whether the Fund's investment risks are balanced by its potential rewards.
<PAGE>
WHAT ARE THE FUND'S FEES AND EXPENSES?
Liberty U. S. Government money market 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 Class A or Class B shares.
<TABLE>
<CAPTION>
<S> <C> <C>
Shareholder Fees
Fees Paid Directly From Your Investment Class A Class B
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering None None
price)
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase 0.00% 5.50%
price or redemption proceeds, as applicable)
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other None None
Distributions) (as a percentage of offering price)
Redemption Fee (as a percentage of amount redeemed, if applicable) None None
Exchange Fee None None
Annual Fund Operating Expenses (Before Waivers)(1)
Expenses That are Deducted From Fund Assets (as a percentage of average net
assets)
Management Fee (2) 0.49% 0.49%
Distribution (12b-1) Fee None 0.75%
Shareholder Services Fee (3) 0.25% 0.25%
Other Expenses 0.44% 0.44%
Total Annual Fund Operating Expenses (4) 1.18% 1.93% (5)
1 Although not contractually obligated to do so, the adviser and shareholder
services provider expect to waive certain amounts during the fiscal year
ending March 31, 2000. These are shown below along with the net expenses the
Fund expects to actually pay for the fiscal year ended March 31, 2000.
Total Waivers of Fund Expenses 0.16% 0.01%
Total Actual Annual Fund Operating Expenses (after waivers ) 1.02% 1.92%
</TABLE>
2 The adviser expects to voluntarily waive a portion of the management fee. The
adviser can terminate this anticipated voluntary waiver at any time. The
management fee paid by the Fund (after the anticipated voluntary waiver) is
expected to be 0.48% for the year ended March 31, 2000.
3 The shareholder services provider expects to voluntarily reduce a portion of
the Fund's Class A Shares shareholder services fee. The shareholder services
provider can termiminate this anticipated voluntary reduction at any time.
The shareholder services fee paid by the Fund's Class A Shares (after the
anticipated voluntary reduction) is expected to be 0.10% for the fiscal year
ended March 31, 2000.
4 For the fiscal year ended March 31, 1999, prior to the reorganization of
Liberty U.S. Government Money Market Trust, the Former Fund, as a portfolio
of Money Market Obligations Trust, the Total Annual Fund Operating Expenses
and Total Actual Annual Fund Operating Expenses (after waivers) for Class A
Shares were 1.20% and 1.03%, respectively, and for Class B Shares were 1.93%
and 1.93%, respectively.
5 Class B Shares convert to Class A Shares (which pay lower ongoing expenses)
approximately eight years after purchase.
<PAGE>
Example
This Example is intended to help you compare the cost of investing in the Fund's
Class A Shares and Class B Shares with the cost of investing in other mutual
funds.
The Example assumes that you invest $10,000 in the Fund's Class A Shares and
Class B Shares for the time periods indicated and then redeem all of your Shares
at the end of those periods. Expenses assuming no redemption are also shown for
Class B Shares. The Example also assumes that your investment has a 5% return
each year and that the Fund's Class A Shares and Class B Shares operating
expenses are before waivers as estimated in the table and remain the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be: Share Class 1 Year 3 Years 5 Years 10 Years Class A Shares
Expenses assuming redemption $120 $375 $649 $1,432 Class B Shares Expenses
assuming redemption $763 $1,044 $1,274 $2,254 Expenses assuming no redemption
$196 $606 $1,042 $2,254
<PAGE>
WHAT ARE THE FUND'S INVESTMENT STRATEGIES?
The Fund invests primarily in a portfolio of U.S. Treasury and government agency
securities with a maturity of 397 days or less. 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:
o current U.S. economic activity and the economic outlook ;
o current short-term interest rates;
o the Federal Reserve Board's policies regarding short-term interest rates; and
o 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 lengthen or
shorten 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?
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 Fund
invests in the following types of fixed income securities.
Treasury securities
Treasury securities are direct obligations of the federal government of the
United States.
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.
Bank Instruments
Bank instruments are securities of banks and savings associations the
principal amount of which is fully insured by the FDIC or FSLIC.
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.
<PAGE>
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.
Investing in Securities of Other Investment Companies
The Fund may invest its assets in securities of other investment companies,
including the securities of affiliated money market funds, as an efficient means
of carrying out its investment policies and managing its uninvested cash.
WHAT ARE THE SPECIFIC RISKS OF INVESTING IN THE FUND?
Although there are many factors that may affect an investment in the Fund, the
principal risks of investing in a U.S. government money market fund are
described below.
Interest Rate Risk
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 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 Risk
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, redeem or exchange 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 end of regular trading
(normally 4:00 p.m. Eastern time) each day the NYSE is open.
The required minimum initial investment for Fund Shares is $1,500. However, the
minimum investment for a retirement account in any class is $250. Subsequent
investments must be in amounts of at least $100.
An account may be opened with a smaller amount as long as the $1,500 minimum,
and, in the case of retirement accounts, the $250 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.
<PAGE>
SALES CHARGE WHEN YOU REDEEM
Your redemption proceeds may be reduced by a sales charge, commonly referred to
as a contingent deferred sales charge (CDSC).
Class B Shares
Shares Held Up To: CDSC
1 year 5.50%
2 years 4.75%
3 years 4.00%
4 years 3.00%
5 years 2.00%
6 years 1.00%
7 years or more 0.00%
You will not be charged a CDSC when redeeming Shares:
o purchased with reinvested dividends or capital gains;
o purchased within 120 days of redeeming Shares of an equal or lesser amount;
o that you exchanged into the same share class of another Federated Fund where
the shares were held for the applicable CDSC holding period (other than a
money market fund);
o purchased through investment professionals who did not receive advanced
sales payments; or
o if, after you purchase Shares, you become disabled as defined by the IRS.
In addition, you will not be charged a CDSC:
o if the Fund redeems your Shares and closes your account for not
meeting the minimum balance requirement;
o if your redemption is a required retirement plan distribution;
o upon the death of the last surviving shareholder of the account.
If your redemption qualifies, you or your investment professional should notify
the Distributor at the time of redemption to eliminate the CDSC. If the
Distributor is not notified, the CDSC will apply.
To keep the sales charge as low as possible, the Fund redeems your Shares in
this order:
o Shares that are not subject to a CDSC; and
o Shares held the longest (to determine the number of years your Shares have
been held, include the time you held shares of other Federated Funds that
have been exchanged for Shares of this Fund); and
The CDSC is then calculated using the share price at the time of purchase or
redemption, whichever is lower.
HOW IS THE FUND SOLD?
The Fund offers two share classes: Class A Shares and Class B Shares, each
representing interests in a single portfolio of securities.
The Fund's Distributor markets the Shares described in this prospectus to
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 Class B Shares. Because Class B 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, directly from the
Fund, or through an exchange from another Federated Fund. The Fund reserves the
right to reject any request to purchase or exchange Shares. Where the Fund
offers more than one share class and you do not specify the class choice on your
New Account Form or form of payment (e.g., Federal Reserve wire or check) you
automatically will receive Class A Shares.
THROUGH AN INVESTMENT PROFESSIONAL
o Establish an account with the investment professional; and
o 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
o Establish your account with the Fund by submitting a completed New
Account Form; and
o 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.
<PAGE>
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.
THROUGH AN EXCHANGE
You may purchase Shares through an exchange from the same Share class of another
Federated Fund. You must meet the minimum initial investment requirement for
purchasing Shares and both accounts must have identical registrations.
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 $50.
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 AND EXCHANGE SHARES
You should redeem or exchange Shares:
o through an investment professional if you purchased Shares through an
investment professional; or
o directly from the Fund if you purchased Shares directly from the Fund.
THROUGH AN INVESTMENT PROFESSIONAL
Submit your redemption or exchange 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.
<PAGE>
DIRECTLY FROM THE FUND
By Telephone
You may redeem or exchange Shares by calling the Fund once you have completed
the appropriate authorization form for telephone transactions.
If you call before 12:00 noon (Eastern time) your redemption will be wired to
you the same day. You will not receive that day's dividend.
If you call after 12:00 noon (Eastern time) your redemption will be wired to you
the following business day. You will receive that day's dividend. Under limited
circumstances, arrangements may be made with the Distributor for same-day
payment of redemption proceeds, without that day's dividend, for redemption
requests received before 2:00 p.m. (Eastern time).
By Mail
You may redeem or exchange 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:
o Fund Name and Share Class, account number and account registration;
o amount to be redeemed or exchanged;
o signatures of all Shareholders exactly as registered; and
o if exchanging, the Fund Name and Share Class, account number and account
registration into which you are exchanging.
Call your investment professional or the Fund if you need special instructions.
Signature Guarantees Signatures must be guaranteed if:
o your redemption will be sent to an address other than the address of
record;
o your redemption will be sent to an address of record that was changed
within the last 30 days;
o a redemption is payable to someone other than the shareholder(s) of
record; or
o if exchanging (transferring) into another fund with a different shareholder
registration.
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:
o an electronic transfer to your account at a financial institution that
is an ACH member; or
o 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:
o to allow your purchase to clear;
o during periods of market volatility; or
o 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.
EXCHANGE PRIVILEGES
You may exchange Shares of the Fund into Shares of the same class of another
Federated Fund. To do this, you must:
o ensure that the account registrations are identical;
o meet any minimum initial investment requirements; and
o receive a prospectus for the fund into which you wish to exchange.
An exchange is treated as a redemption and a subsequent purchase, and is a
taxable transaction.
The Fund may modify or terminate the exchange privilege at any time. The Fund's
management or investment adviser may determine from the amount, frequency and
pattern of exchanges that a shareholder is engaged in excessive trading that is
detrimental to the Fund and other shareholders. If this occurs, the Fund may
terminate the availability of exchanges to that shareholder and may bar that
shareholder from purchasing other Federated Funds.
SYSTEMATIC WITHDRAWAL/exchange PROGRAM
You may automatically redeem or exchange 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.
<PAGE>
Systematic Withdrawal Program (SWP) On Class B Shares You will not be charged a
CDSC on SWP redemptions if:
o you redeem 12% or less of your account value in a single year;
o you reinvest all dividends and capital gains distributions; and
o your account has at least a $10,000 balance when you establish the SWP. (You
cannot aggregate multiple Class B Share accounts to meet this minimum
balance).
You will be subject to a CDSC on redemption amounts that exceed the 12% annual
limit. In measuring the redemption percentage, your account is valued when you
establish the SWP and then annually at calendar year-end. You can redeem
monthly, quarterly, or semi-annually.
For SWP accounts established prior to April 1, 1999, your account must be at
least one year old in order to be eligible for the waiver of the CDSC.
CHECKWRITING (Class A Shares only)
You may request checks to redeem your Class A Shares. Your account will continue
to receive the daily dividend declared on the Class A Shares being redeemed
until the check is presented for payment.
DEBIT CARD (Class A Shares only)
You may request a debit card account that allows you to redeem Class A 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 or exchanging
Shares represented by certificates previously issued by the Fund, you must
return the certificates with your written redemption or exchange 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 or exchanges 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 and
exchanges 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 total 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 based on the Fund's
average daily net assets as shown in the chart below. The Adviser may
voluntarily waive a portion of its fee or reimburse the Fund for certain
operating expenses.
Fee as
Average Daily Percentage of
Net Assets Average Daily Net Assets
First $500 million 0.500%
Second $500 million 0.475%
Third $500 million 0.450%
Fourth $500 million 0.425%
Over $2 billion 0.400%
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 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.
FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
(TO BE INSERTED IN THE 485b FILING)
<PAGE>
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
A Portfolio of Money Market Obligations Trust
class a shares
class b shares
A Statement of Additional Information (SAI) dated July ____ 1999, is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is contained in the Fund's Annual Report to shareholders as
it becomes available. The Annual Report discusses market conditions and
investment strategies that significantly affected the Fund's performance during
its last fiscal year. To obtain the SAI, the Annual Report, the Semi-Annual
Report and other information without charge, and make inquires, call your
investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by visiting or
writing the Public Reference Room of the Securities and Exchange Commission in
Washington, DC 20549-6009 or from the Commission's Internet site at
http://www.sec.gov. You can call 1-800-SEC-0330 for information on the Public
Reference Room's operations and copying charges.
Investment Company Act File No. 811-5950
Cusip_____________
Cusip_____________
G00701-03 (7/99)
Statement of Additional Information
LIBERTY U.S. GOVERNMENT MONEY MARKET TRUST
A Portfolio of Money Market Obligations Trust
class a shares
class b shares
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Liberty U. S. Government Money Market
Trust Class A Shares and Class B Shares (Fund), dated July ___ 1999. This SAI
incorporates by reference the Fund's Annual Report. Obtain the prospectus or the
Annual Report without charge by calling 1-800-341-7400.
july ____ 1999
Contents
How is the Fund Organized?
Securities in Which the Fund Invests
How is the Fund Sold?
Subaccounting Services
Redemption in Kind
Massachusetts Partnership Law
Account and Share Information
Tax Information
Who Manages and Provides Services to the Fund?
How Does the Fund Measure Performance?
Who is Federated Investors, Inc.?
[Financial Information]
Addresses
Cusip ___________
Cusip ___________
8062809B (7/99)
<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
Trust may offer separate series of shares representing interests in separate
portfolios of securities. The Fund, which was established on August 30, 1979,
was reorganized as a portfolio of the Trust on July _____ 1999. The Fund's
investment adviser is Federated Investment Management Company.
SECURITIES IN WHICH THE FUND INVESTS
In pursuing its investment strategy, the Fund may invest in the following
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.
Treasury Securities
Treasury securities are direct obligations of the federal government of the
United States. 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.
Bank Instruments Bank instruments are securities of banks and savings
associations the principal amount of which is fully insured by the FDIC or
FSLIC.
Investing in Securities of Other Investment Companies
The Fund may invest its assets in securities of other investment companies,
including the securities of affiliated money market funds, as an efficient means
of carrying out its investment policies and managing its uninvested cash.
<PAGE>
Special Transactions
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. 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. 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
terminating a 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 Risk
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.
INVESTMENT LIMITATIONS
Diversification
With respect to securities comprising 75% of the value of its total assets, the
Fund will not purchase securities of any one issuer (other than cash; cash
items; securities issued or guaranteed by the government of the United States or
its agencies or instrumentalities and repurchase agreements collateralized by
such U.S. government securities; and securities of other investment companies)
if, as a result, more than 5% of the value of its total assets would be invested
in securities of that issuer, or the Fund would own more than 10% of the
outstanding voting securities of that issuer.
Concentration
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 are not deemed
to constitute an industry.
<PAGE>
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 in 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 interests 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 Securities
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.
The above limitations cannot be changed unless authorized by the "vote of a
majority of its outstanding voting securities," as defined by the Investment
Company Act. 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.
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.
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 Illiquid Securities
The Fund will not purchase securities for which there is no readily available
market, or enter into repurchase agreements or purchase time deposits maturing
in more than seven days, if immediately after and as a result, the value of such
securities would exceed, in the aggregate, 10% of the Fund's net assets.
For purposes of the above policy concerning concentration, in conformity with an
SEC position, the Fund considers "bank instruments" to be limited to instruments
of domestic banks.
Regulatory Compliance
The Trust 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 Trust will comply
with the various requirements of Rule 2a-7 (the "Rule"), which regulates money
market mutual funds. The Trust will determine the effective maturity of its
investments according to the Rule. The Trust 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 Trustees 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 Trustees 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 Trustees 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 Trustees 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.
WHAT DO SHARES COST?
The NAV for each class of Shares may differ due to the variance in daily net
income realized by each class. Such variance will reflect only accrued net
income to which the shareholders of a particular class are entitled.
REDUCING OR ELIMINATING THE CONTINGENT DEFERRED SALES CHARGE
These reductions or eliminations are offered because: no sales commissions have
been advanced to the investment professional selling Shares; the shareholder has
already paid a Contingent Deferred Sales Charge (CDSC); or nominal sales efforts
are associated with the original purchase of Shares.
Upon notification to the Distributor or the Fund's transfer agent, no CDSC will
be imposed on redemptions:
o following the death or post-purchase disability, as defined in Section
72(m)(7) of the Internal Revenue Code of 1986, of the last surviving
shareholder;
o representing minimum required distributions from an Individual Retirement
Account or other retirement plan to a shareholder who has attained the age of
70 1/2;
o which are qualifying redemptions of Class B Shares under a Systematic
Withdrawal Program;
o of Shares that represent a reinvestment within 120 days of a previous
redemption;
o of Shares held by the Trustees, employees, and sales representatives of the
Fund, the Adviser, the Distributor and their affiliates; employees of any
investment professional that sells Shares according to a sales agreement with
the Distributor; and the immediate family members of the above persons; and
o of Shares originally purchased through a bank trust department, a registered
investment adviser or retirement plans where the third party administrator
has entered into certain arrangements with the Distributor or its affiliates,
or any other investment professional, to the extent that no payments were
advanced for purchases made through these entities.
<PAGE>
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
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.
For some classes of Shares, 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.
Federated and its subsidiaries may benefit from arrangements where the Rule
12b-1 Plan fees related to Class B Shares may be paid to third parties who have
advanced commissions to investment professionals.
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 Fund have equal voting rights, except that in matters
affecting only a particular Fund or class, only Shares of the 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 Fund's outstanding shares of
all series entitled to vote.
As of _________, 1999, the following shareholders owned of record, beneficially,
or both, 5% or more of outstanding 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.
<PAGE>
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
fifteen Funds and the Federated Fund Complex is comprised of 56 investment
companies, whose investment advisers are affiliated with the Trust's Adviser.
As of ________, 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. The following symbol (#) denotes a Member of the Board's Executive
Committee, which handles the Board's responsibilities between its meetings.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name Total
Birth Date Aggregate Compensation From
Address Principal Occupations Compensation Trust and Fund
Position With Trust for Past Five Years From Trust Complex
John F. Donahue*+ Chief Executive Officer and Director or Trustee of $0 $0 for the
Birth Date: July 28, 1924 the Federated Fund Complex; Chairman and Director, Trust and
Federated Investors Tower Federated Investors, Inc.; Chairman and Trustee, 54 other investment
1001 Liberty Avenue Federated Investment Management Company; Chairman and companies
Pittsburgh, PA Director, Federated Investment Counseling and in the Fund Complex
CHAIRMAN AND TRUSTEE Federated Global Investment Management Corp.;
Chairman, Passport Research, Ltd.
Thomas G. Bigley Director or Trustee of the Federated Fund Complex; $18, 351 $113,860.22 for the
Birth Date: February 3, 1934 Director, Member of Executive Committee, Children's Trust and 54 other
15 Old Timber Trail Hospital of Pittsburgh; formerly: Senior Partner, investment
Pittsburgh, PA Ernst & Young LLP; Director, MED 3000 Group, Inc.; companies
TRUSTEE Director, Member of Executive Committee, University in the Fund Complex
of Pittsburgh.
John T. Conroy, Jr. Director or Trustee of the Federated Fund Complex; $20,189 $125,264.48 for the
Birth Date: June 23, 1937 President, Investment Properties Corporation; Senior Trust and 54 other
Wood/IPC Commercial Dept. Vice President, John R. Wood and Associates, Inc., investment
John R. Wood Associates, Inc. Realtors; Partner or Trustee in private real estate companies
Realtors ventures in Southwest Florida; formerly: President, in the Fund Complex
3255 Tamiami Trail North Naples Property Management, Inc. and Northgate
Naples, FL Village Development Corporation.
TRUSTEE
John F. Cunningham++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: March 5, 1943 Complex; Chairman, President and Chief Executive and 26 other
353 El Brillo Way Officer, Cunningham & Co., Inc. ; Trustee Associate, investment
Palm Beach, FL Boston College; Director, EMC Corporation; formerly: companies in the
TRUSTEE Director, Redgate Communications. Fund Complex
Retired: 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 Federated Fund Complex; $18,351 $113,860.22 for the
Birth Date: October 11, 1932 Professor of Medicine, University of Pittsburgh; Trust and 54 other
3471 Fifth Avenue Medical Director, University of Pittsburgh Medical investment
Suite 1111 Center - Downtown; Hematologist, Oncologist, and companies
Pittsburgh, PA Internist, University of Pittsburgh Medical Center; in the Fund Complex
TRUSTEE Member, National Board of Trustees, Leukemia Society
of America.
Peter E. Madden Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
Birth Date: March 16, 1942 formerly: Representative, Commonwealth of Trust and 54 other
One Royal Palm Way Massachusetts General Court; President, State Street investment
100 Royal Palm Way Bank and Trust Company and State Street Corporation. companies
Palm Beach, FL in the Fund Complex
TRUSTEE Retired: Director, VISA USA and VISA International;
Chairman and Director, Massachusetts Bankers
Association; Director, Depository Trust Corporation.
Charles F. Mansfield, Jr.++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: April 10, 1945 Complex; Management Consultant. and 26 other
80 South Road investment
Westhampton Beach, NY TRUSTEE Retired: Chief Executive Officer, PBTC International companies in the
Bank; 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., Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
S.J.D. President, Law Professor, Duquesne University; Trust and 54 other
Birth Date: December 20, 1932 Consulting Partner, Mollica & Murray. investment
President, Duquesne University companies
Pittsburgh, PA Retired: Dean and Professor of Law, University of in the Fund Complex
TRUSTEE Pittsburgh School of Law; Dean and Professor of Law,
Villanova University School of Law.
Marjorie P. Smuts Director or Trustee of the Federated Fund Complex; $18,351 $113,860.22 for the
Birth Date: June 21, 1935 Public Relations/Marketing/Conference Planning. Trust and 54 other
4905 Bayard Street investment
Pittsburgh, PA Retired: National Spokesperson, Aluminum Company of companies in the
TRUSTEE America; business owner. Fund Complex
John S. Walsh++ Director or Trustee of some of the Federated Fund $0 $0 for the Trust
Birth Date: November 28, 1957 Complex; President and Director, Heat Wagon, Inc.; and 23 other
2007 Sherwood Drive President and Director, Manufacturers Products, Inc.; investment
Valparaiso, IN President, Portable Heater Parts, a division of companies in the
TRUSTEE Manufacturers Products, Inc.; Director, Walsh & Fund Complex
Kelly, Inc.; formerly, Vice President, Walsh & Kelly,
Inc.
J. Christopher Donahue+ President or Executive Vice President of the $0 $0 for the Trust
Birth Date: April 11, 1949 Federated Fund Complex; Director or Trustee of some and 16 other
Federated Investors Tower of the Funds in the Federated Fund Complex; President investment
1001 Liberty Avenue and Director, Federated Investors, Inc.; President companies in the
Pittsburgh, PA and Trustee, Federated Investment Management Company; Fund Complex
PRESIDENT President and Director, Federated Investment
Counseling and Federated Global Investment
Management Corp.; President, Passport
Research, Ltd.; Trustee, Federated
Shareholder Services Company; Director,
Federated Services Company.
<PAGE>
Edward C. Gonzales Trustee or Director of some of the Funds in the $0 $0 for the Trust and
Birth Date: October 22, 1930 Federated Fund Complex; President, Executive Vice 1 other investment
Federated Investors Tower President and Treasurer of some of the Funds in the companies in the
1001 Liberty Avenue Federated Fund Complex; Vice Chairman, Federated Fund Complex
Pittsburgh, PA Investors, Inc.; Vice President, Federated Investment
EXECUTIVE VICE PRESIDENT 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 Executive Vice President and Secretary of the $0 $0 for the Trust
Birth Date: October 26, 1938 Federated Fund Complex; Executive Vice President, and 54 other
Federated Investors Tower Secretary, and Director, Federated Investors, Inc.; investment
1001 Liberty Avenue Trustee, Federated Investment Management Company; companies in the
Pittsburgh, PA Director, Federated Investment Counseling and Fund Complex
EXECUTIVE VICE PRESIDENT AND Federated Global Investment Management Corp.;
SECRETARY Director, Federated Services Company; Director,
Federated Securities Corp.
Richard J. Thomas Treasurer of the Federated Fund Complex; Vice $0 $0 for the Trust
Birth Date: June 17, 1954 President - Funds Financial Services Division, and 54 other
Federated Investors Tower Federated Investors, Inc.; Formerly: various investment
1001 Liberty Avenue management positions within Funds Financial Services companies in the
Pittsburgh, PA Division of Federated Investors, Inc. Fund Complex
TREASURER
William D. Dawson, III Chief Investment Officer of this Fund and various $0 $0 for the Trust
Birth Date: March 3, 1949 other Funds in the Federated Fund Complex; Executive and 41 other
Federated Investors Tower Vice President, Federated Investment Counseling, investment
1001 Liberty Avenue Federated Global Investment Management Corp., companies in the
Pittsburgh, PA Federated Investment Management Company and Passport Fund Complex
CHIEF INVESTMENT OFFICER 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.
Richard B. Fisher President or Vice President of some of the Funds in $0 $0 for the Trust
Birth Date: May 17, 1923 the Federated Fund Complex; Director or Trustee of and 6 other
Federated Investors Tower some of the Funds in the Federated Fund Complex; investment
1001 Liberty Avenue Executive Vice President, Federated Investors, Inc.; companies in the
Pittsburgh, PA Chairman and Director, Federated Securities Corp. Fund Complex
VICE PRESIDENT
Deborah A. Cunningham Deborah A. Cunningham is Vice President of the Trust. $0 $0 for the Trust
Birth Date: September 15, Ms. Cunningham joined Federated Investors in 1981 and 6 other
1959 and has been a Senior Portfolio Manager and a Senior investment
Federated Investors Tower Vice President of the Fund's investment adviser since companies in the
1001 Liberty Avenue 1997. Ms. Cunningham served as a Portfolio Manager Fund Complex
Pittsburgh, PA and a Vice President of the investment adviser from
VICE PRESIDENT 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 President of the Trust. Ms. $0 $0 for the Trust
Birth Date: September 12, Ochson joined Federated Investors in 1982 and has and 7 other
1953 been a Senior Portfolio Manager and a Senior Vice investment
Federated Investors Tower President of the Fund's investment adviser since companies in the
1001 Liberty Avenue 1996. From 1988 through 1995, Ms. Ochson served as a Fund Complex
Pittsburgh, PA Portfolio Manager and a Vice President of the Fund's
VICE PRESIDENT investment adviser. Ms. Ochson is a Chartered
Financial Analyst and received her M.B.A. in Finance
from the University of Pittsburgh.
Susan R. Hill Susan R. Hill is Vice President of the Trust. Ms. $0 $0 for the Trust
Birth Date: June 20, 1963 Hill joined Federated Investors in 1990 and has been and 9 other
Federated Investors Tower a Portfolio Manager since 1993 and a Vice President investment
1001 Liberty Avenue of the Fund's investment adviser since 1997. Ms. companies in the
Pittsburgh, PA Hill was a Portfolio Manager and an Assistant Vice Fund Complex
VICE PRESIDENT President of the investment adviser from 1994 until
1997. Ms. Hill is a Chartered Financial Analyst and
received an M.S. in Industrial Administration from
Carnegie Mellon University.
</TABLE>
+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.
Research Services
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 $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 PUBLIC ACCOUNTANTs
Arthur Andersen is the independent public accountant for the Fund.
FEES PAID BY THE FUND FOR SERVICES
For the Year ended March 31 1999 1998 1997
Advisory Fee Earned $ $3,175,542 $3,311,087
Advisory Fee Reduction $ $126,845 $620,370
Brokerage Commissions $0 $0
Administrative Fee $ $484,666 $506,849
12b-1 Fee
Class B Shares $ ---- ----
Shareholder Services Fee
Class A Shares $ ---- ----
Class B Shares $ ---- ----
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.
For the fiscal years ended March 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 ________, 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.
Unless otherwise stated, any quoted Share performance reflects the effect of
non-recurring charges, such as maximum sales charges, which, if excluded, would
increase the total return and yield. 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
Yield and Effective Yield given for the 7-day period ended March 31, 1999.
Performance of the Fund shown is prior to its reorganization as a portfolio of
the Trust on _______, 1999.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
7-Day Period 1 Year 5 Years 10 Years
- -------------------------------------------------------------------------------------------------------------
Class A Shares
Total Return
Yield
Effective Yield
7-Day Period 1 Year 5 Years 10 Years Since Inception
on December 17, 1994
Class B Shares
Total Return
Yield
Effective Yield
</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
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.
<PAGE>
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
o references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;
o 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;
o 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 Funds; and
o 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:
i 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.
i 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.
i Money, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.
i 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.
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.
FINANCIAL INFORMATION
The Financial Statements for the Fund for the fiscal year ended March 31, 1999,
are incorporated herein by reference to the Annual Report to Shareholders of
Liberty U.S. Government Money Market Trust dated March 31, 1999.
<PAGE>
ADDRESSES
Liberty U.S. Government Money market Trust
Class A Shares
Class B 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 Public Accountants
Arthur Andersen LLP
225 Franklin Street
Boston, MA 02110-2812
PART C. OTHER INFORMATION.
Item 23 Exhibits:
(a) (i) Conformed copy of Declaration of Trust of the Registrant; (12)
(ii) Conformed copy of Amendment to the Declaration of Trust of the Registrant;
(12)
(iii)Conformed copy of Amendment No. 2 to Declaration of Trust of the
Registrant; (17)
(iv) Conformed copy of Amendment No. 3 to Declaration of Trust of the
Registrant; (17)
(v) Conformed copy of Amendment No. 4 to Declaration of Trust of the
Registrant; (17)
(vi) Conformed copy of Amendment No. 5 to Declaration of Trust of the
Registrant; (17)
(vii)Conformed copy of Amendment No. 6 to Declaration of Trust of the
Registrant; (17)
(viii) Conformed copy of Amendment No. 8 to Declaration of Trust of the
Registrant; (10)
(ix) Conformed copy of Amendment No. 9 to Declaration of Trust of the
Registrant; (15)
(x) Conformed copy of Amendment No. 10 to Declaration of Trust of the
Registrant; (16)
(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 and Treasury Obligations
Fund-Institutional Capital 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)
<PAGE>
(d) (i) Conformed copy of Investment Advisory Contract of the Registrant;
(12)
(ii) Conformed copies of Exhibits A through
G to Investment Advisory Contract of the
Registrant; (12) (iii) Conformed copy of
Investment Advisory Contract of the
Registrant (Government Obligations Tax
Managed Fund only); (11)
(iv) Conformed copy of Exhibit A to
Investment Advisory Contract of the
Registrant(Government Obligations
Tax Managed Fund only); (11)
(e) (i) Conformed copy of Distributor's Contract of the Registrant; (7)
(ii) Conformed copy of Exhibit B to the Distributor's Contract of
the Registrant; (15)
(iii) Conformed copy of Exhibit D to the Distributor's Contract of
the Registrant;
(15)
(iv) Conformed copy of Exhibit E to the Distributor's Contract of
the Registrant; (16)
(v) Conformed copy of Exhibit F to the Distributor's Contract of
the Registrant; (16)
(vi) 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;
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)
11. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 on Form N-1A filed May 7, 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)
<PAGE>
(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;(17)
(ii) The responses described in Item
23(e)(vi) are hereby incorporated by
reference. (iii) Conformed copy of Amended
and Restated Shareholder Services Agreement
of the Registrant; (17) (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) (j)
(i) Conformed copy of Consent of Deloitte & Touche
LLP, Independent Auditors for:
(a) Federated Master Trust; (19)
(b) Liquid Cash Trust; (20)
(c) Automated Government Money Trust;(19)
(d) Trust for Short-Term U.S. Government
Securities (19)
(ii) Conformed copy of Consent of Arthur Andersen LLP for:
(a) Trust for Government Cash Reserves (19)
(b) Trust for U.S. Treasury Obligations (19)
(c) Federated Short-Term U.S. Government Trust (19)
(k) Not applicable;
(l) Conformed copy of Initial Capital Understanding; (12)
+ All exhibits are being 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)
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)
<PAGE>
(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) The responses
described in Item 23(e)(vi) are hereby
incorporated by reference.
(n) Copies of Financial Data Schedules; (not included
per footnote 60 of Release No. 33-7684) (o) 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).
(p) Conformed copy of Power of Attorney of the Registrant; (18)
(i) Conformed copy of Power of Attorney of
Chief Investment Officer of the Registrant; (18)
(ii) Conformed copy of Power of Attorney of
Treasurer of the Registrant; (18)
Item 24. Persons Controlled by or Under Common Control with Registrant:
None
Item 25. Indemnification: (1)
Item 26. Business and Other Connections of Investment Adviser:
(a) For a description of the other business of Federated Investment
Management Company, the investment adviser for all the Trust's
portfolio's, see the section entitled "Who Manages the Fund" in
Part A. The affiliations with the Registrant of two of the
Trustees and eight 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." Mark D Olson, Trustee
of the investment adviser, his position with the investment
adviser, and, in parentheses, his principal occupation is:
(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
and Trustees 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
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)
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)
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)
<PAGE>
Vice Presidents: Todd A. Abraham
J. Scott Albrecht
Arthur J. Barry
Randall S. Bauer
Micheal W. Casey
Robert E. Cauley
Kenneth J. Cody
Alexandre de Bethmann
B. Anthony Delserone, Jr.
Michael P. Donnelly
Linda A. Duessel
Donald T. Ellenberger
Kathleen M. Foody-Malus
Thomas M. Franks
Edward C. Gonzales
James E. Grefenstette
Mark Halperin
Patricia L. Heagy
Susan R. Hill
William R. Jamison
Constantine J. Kartsonas
Stephen A. Keen
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
Tracy P. Stouffer
Edward J. Tiedge
Peter Vutz
Paige M. Wilhelm
George B. Wright
Jolanta M. Wysocka
Assistant Vice Presidents: 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
Natalie F. Metz
Joseph M. Natoli
Ihab Salib
James W. Schaub
John Sheehy
Matthew K. Stapen
Diane Tolby
Timothy G. Trebilcock
Leonardo A. Vila
Steven J. Wagner
Lori A. Wolff
<PAGE>
Secretary: G. Andrew Bonnewell
Treasurer: Thomas R. Donahue
Assistant Secretary & Trustee: Thomas R. Donahue
Assistant Secretaries: Richard B. Fisher
Christine I. Newcamp
Assistant Treasurer: Richard B. Fisher
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
Registrant, acts as principal underwriter for the following .... open-end
investment companies, including the Registrant:
Automated Government Money Trust; 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 Master Trust; Federated Municipal Opportunities Fund, Inc.; Federated
Municipal Securities Fund, Inc.; Federated Municipal Trust; Federated Short-Term
Municipal Trust; Federated Short-Term U.S. Government 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.; Liberty U.S. Government Money
Market Trust; Liquid Cash Trust; 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; Trust for Government Cash Reserves; Trust for Short-Term U.S.
Government Securities; Trust for U.S. Treasury Obligations; 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.
<PAGE>
<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 Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
1001 Liberty Avenue Operating Officer, Asst.
Pittsburgh, PA 15222-3779 Secretary and Asst.
Treasurer, Federated
Securities Corp.
Arthur L. Cherry Director
Federated Investors Tower Federated Securities Corp. --
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John B. Fisher Director
Federated Investors Tower Federated Securities Corp. --
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Thomas R. Donahue Director, Assistant Secretary --
Federated Investors Tower and Assistant 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
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward C. Gonzales Executive Vice President --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
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
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
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
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
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
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
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
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
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
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
Raymond Hanley 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
Beth A. Hetzel 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
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
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
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
Thomas P. Moretti 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
<PAGE>
(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
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
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
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
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
Terri E. Bush 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
Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Robert M. Rossi Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Matthew S. Hardin Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
<PAGE>
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
Leslie K. Ross Assistant Secretary, --
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:
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<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 Services Company P.O. Box 8600
("Transfer Agent and Dividend Boston, MA 02266-8600
Disbursing Agent")
Federated Services Company Federated Investors Tower
("Administrator") 1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Federated Investment Management Federated Investors Tower
Company ("Adviser") 1001 Liberty Avenue
Pittsburgh, PA 15222-3779
State Street Bank and Trust Company P.O. Box 8600
("Custodian") Boston, MA 02266-8600
</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 4th day of June, 1999.
MONEY MARKET OBLIGATIONS TRUST
BY: /s/ Leslie K. Ross
Leslie K. Ross, Assistant Secretary
Attorney in Fact for John F. Donahue
June 4, 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:
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<CAPTION>
<S> <C> <C>
NAME TITLE DATE
By: /s/ Leslie K. Ross
Leslie K. Ross Attorney In Fact June 4, 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
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