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Previous: KEMPER TAX EXEMPT INSURED INCOME TRUST MULTI STATE SERIES 21, 24F-2NT, 2000-12-29 |
Next: MONEY MARKET OBLIGATIONS TRUST /NEW/, NSAR-B, 2000-12-29 |
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and the income tax imposed by the State of Alabama consistent with stability of principal by investing in a portfolio of short-term, high-quality Alabama tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 8
How to Purchase Shares 8
How to Redeem Shares 10
Account and Share Information 13
Who Manages the Fund? 15
Financial Information 15
Report of Ernst & Young LLP, Independent Auditors 28
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and the income tax imposed by the State of Alabama 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.
The Fund invests in short-term, high-quality Alabama tax exempt securities. The Fund will invest so that at least 80% of its annual interest income is exempt from federal regular and Alabama state income tax or so that at least 80% of its net assets is invested in obligations, the interest income from which is exempt from federal regular and Alabama state income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per share. The bar chart shows the variability of the Fund's total returns on a calendar year-end basis.
The Fund's Shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.82%.
Within the period shown in the Chart, the Fund's highest quarterly return was 0.98% (quarter ended June 30, 1995). Its lowest quarterly return was 0.56% (quarter ended March 31, 1994).
The following table represents the Fund's Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
3.06% |
|
|
||
|
5 Years |
|
3.27% |
|
|
||
|
Start of Performance1 |
|
3.17% |
|
|
||
1 The Fund's start of performance date was December 3, 1993.
The Fund's 7-Day Net Yield as of December 31, 1999 was 4.25%.
You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waiver)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.50% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee3 |
|
0.25% |
|
Other Expenses |
|
0.14% |
|
Total Annual Fund Operating Expenses |
|
0.89% |
|
1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waivers of Fund Expenses |
|
0.34% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.55% |
|
2 The adviser has voluntarily a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.17% for the fiscal year ended October 31, 2000. |
||
|
3 The shareholder services provider has voluntarily waived a portion of the shareholder services fee. The shareholder service provider can terminate this voluntary waiver at any time. The shareholder services fee paid by the Fund (after the voluntary waiver) was 0.24% for the fiscal year ended October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses are before waivers as shown above and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
|
$ 91 |
|
|
||
|
3 Years |
|
$ 284 |
|
|
||
|
5 Years |
|
$ 493 |
|
|
||
|
10 Years |
|
$ 1,096 |
|
|
||
The Fund invests in a portfolio of high-quality Alabama tax exempt securities maturing in 397 days or less. The Fund will invest so that at least 80% of its annual interest income is exempt from federal regular and Alabama state income tax or so that at least 80% of its net assets is invested in obligations, the interest income which is exempt from federal regular and Alabama state income tax. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal and Alabama income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Alabama issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Alabama, the Fund may be subject to additional risks compared to funds that invest in multiple states. Alabama's economy continues to experience moderate economic growth and diversification. While the economy continues to experience declines in its traditional manufacturing industries (textiles, apparels and food processing), they have been partially offset by growth in high technology, health and business services, and new durable goods manufacturing.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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. When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. 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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Alabama taxpayers because it invests in Alabama municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400 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).
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Alabama taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 28.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.04 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.04 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.77 |
% |
|
2.98 |
% |
|
3.24 |
% |
|
3.26 |
% |
|
3.22 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.55 |
% |
|
0.55 |
% |
|
0.55 |
% |
|
0.55 |
% |
|
0.55 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.70 |
% |
|
2.95 |
% |
|
3.19 |
% |
|
3.21 |
% |
|
3.18 |
% |
|
|
|||||||||||||||
|
Expense waiver3 |
|
0.34 |
% |
|
0.36 |
% |
|
0.37 |
% |
|
0.36 |
% |
|
0.37 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$246,262 |
|
|
$239,001 |
|
|
$189,825 |
|
|
$223,647 |
|
|
$233,720 |
|
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--99.5%1 |
|
|
|
|
|
|
|
Alabama--99.5% |
|
|
|
|
$ |
6,000,000 |
|
Alabama HFA, (Series A 2000), Turtle Lake Weekly VRDNs (Double Lake Ventures, LLC)/(FNMA LOC) |
|
$ |
6,000,000 |
|
|
8,000,000 |
|
Alabama HFA, Variable Rate Certificates (Series 1997J), Weekly VRDNs (GNMA COL)/(Bank of America, N.A. LIQ) |
|
|
8,000,000 |
|
|
880,000 |
|
Alabama State IDA, Weekly VRDNs (Sunshine Homes, Inc.)/(Amsouth Bank N.A., Birmingham LOC) |
|
|
880,000 |
|
|
4,755,000 |
|
Alabama State IDA, IDRB (Series 1994), Weekly VRDNs (Decatur Aluminum Corp.)/(Firstar Bank N.A., Cincinnati LOC) |
|
|
4,755,000 |
|
|
3,050,000 |
|
Alabama State IDA, IDRBs (Series 1996), Weekly VRDNs (IMI Cash Valve Project)/(Regions Bank, Alabama LOC) |
|
|
3,050,000 |
|
|
3,350,000 |
|
Alabama State IDA, IRBs Weekly VRDNs (Kappler USA, Inc. Project)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
3,350,000 |
|
|
5,150,000 |
|
Alabama State IDA, Revenue Bonds Weekly VRDNs (Southern Bag Corporation Ltd.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
5,150,000 |
|
|
14,765,000 |
2 |
Alabama State Public School & College Authority, (PT-1195), 4.45% TOBs (Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 3/8/2001 |
|
|
14,765,000 |
|
|
12,160,000 |
2 |
Alabama State Public School & College Authority, (PT-435), 4.50% TOBs (Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 6/14/2001 |
|
|
12,160,000 |
|
|
2,000,000 |
|
Alabama State, (Series A), 5.50% Bonds, 10/1/2001 |
|
|
2,019,417 |
|
|
1,500,000 |
|
Alabama Water PCA, PCR Bonds, 6.35% Bonds (AMBAC INS), 8/15/2001 |
|
|
1,521,686 |
|
|
5,000,000 |
|
Anniston, AL IDB, (Series 1989-A), Weekly VRDNs (Union Foundry Co.)/ (Amsouth Bank N.A., Birmingham LOC) |
|
|
5,000,000 |
|
|
3,650,000 |
|
Arab, AL IDB, (Series 1989), Weekly VRDNs (SCI Manufacturing, Inc.)/(Bank of Tokyo-Mitsubishi Ltd. LOC) |
|
|
3,650,000 |
|
|
1,375,000 |
|
Ashland, AL IDB, (Series 1996), Weekly VRDNs (Tru-Wood Cabinets)/(Regions Bank, Alabama LOC) |
|
|
1,375,000 |
|
|
3,000,000 |
|
Auburn, AL IDB, (Series 1999), Weekly VRDNs (Donaldson Co., Inc.)/(Bank of America, N.A. LOC) |
|
|
3,000,000 |
|
|
2,000,000 |
|
Birmingham, AL IDA Weekly VRDNs (Altec Industries, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
2,000,000 |
|
|
2,715,000 |
|
Birmingham, AL IDA, IDRBs (Series 1997), Weekly VRDNs (J. J. & W, IV Ltd.)/ (Svenska Handelsbanken, Stockholm LOC) |
|
|
2,715,000 |
|
|
6,579,500 |
|
Birmingham, AL IDA, IDRBs (Series 1999), Weekly VRDNs (Glasforms, Inc.)/(Comerica Bank - California LOC) |
|
|
6,579,500 |
|
|
4,745,000 |
|
Birmingham, AL IDA, Revenue Bonds (Series 1989), Weekly VRDNs (O'Neal Steel, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
4,745,000 |
|
|
2,000,000 |
|
Birmingham, AL IDA, Revenue Bonds (Series 1996), Weekly VRDNs (American FireLog Corp.)/(Comerica Bank LOC) |
|
|
2,000,000 |
|
|
2,610,000 |
|
Calhoun County, AL Economic Development Council, Variable/Fixed Rate IDRBs Weekly VRDNs (Fabarc Steel Co.)/(Regions Bank, Alabama LOC) |
|
|
2,610,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Alabama--continued |
|
|
|
|
$ |
800,000 |
|
Cullman, AL IDB, IRBs (Series 1992), Weekly VRDNs (Pressac Holdings PLC)/(Bank One, Michigan LOC) |
|
$ |
800,000 |
|
|
650,000 |
|
Cullman, AL IDB, (Series 1989), Weekly VRDNs (Pressac, Inc.)/(Bank One, Michigan LOC) |
|
|
650,000 |
|
|
2,570,000 |
|
Cullman, AL IDB, Variable Fixed Rate IDRB Weekly VRDNs (National Bedding Co.)/(Bank of America, N.A. LOC) |
|
|
2,570,000 |
|
|
3,000,000 |
|
Decatur, AL IDB, Revenue Refunding Bonds (Series 1993), Weekly VRDNs (Honeywell International, Inc.) |
|
|
3,000,000 |
|
|
1,200,000 |
|
Dothan, AL IDB, Adjustable/Fixed Rate IRBs (Series 1997), Weekly VRDNs (Henderson Steel Erectors)/(Regions Bank, Alabama LOC) |
|
|
1,200,000 |
|
|
2,880,000 |
|
Enterprise, AL IDA, (Series 1997), Weekly VRDNs (Coffee Gin Co.)/(Regions Bank, Alabama LOC) |
|
|
2,880,000 |
|
|
985,000 |
|
Fort Payne, AL IDB, IDRB Weekly VRDNs (Ovalstrapping, Inc.)/ (U.S. Bank, N.A., Minneapolis LOC) |
|
|
985,000 |
|
|
7,200,000 |
|
Gadsden, AL IDB, (Series 2000), Weekly VRDNs (Super Steel South, LLC)/(Michigan National Bank, Farmington Hills LOC) |
|
|
7,200,000 |
|
|
7,400,000 |
|
Gadsden, AL IDB, IDRBs (Series 1997), Weekly VRDNs (Chicago Steel, (Alabama), LLC)/(Marshall & Ilsley Bank, Milwaukee LOC) |
|
|
7,400,000 |
|
|
4,510,000 |
|
Geneva County, AL IDB, Adjustable Fixed Rate IDRBs (Series 1996), Weekly VRDNs (Brooks AG Co., Inc.)/(Regions Bank, Alabama LOC) |
|
|
4,510,000 |
|
|
3,750,000 |
|
Guntersville, AL IDB, (Series 1995), Weekly VRDNs (Hercules Rubber Co. Project)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
3,750,000 |
|
|
2,380,000 |
|
Hamilton, AL IDB, Variable/Fixed Rate IDRBs Weekly VRDNs (Tennessee River, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
2,380,000 |
|
|
10,000,000 |
|
Hoover, AL Board of Education, (Series 2000A), 4.45% BANs, 8/1/2001 |
|
|
10,000,000 |
|
|
3,500,000 |
|
Hoover, AL Board of Education, Warrant Anticipation Notes (Series 1999-B), 4.25% Bonds, 2/1/2001 |
|
|
3,500,000 |
|
|
1,455,000 |
|
Hoover, AL IDB Weekly VRDNs (Bud's Best Cookies, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
1,455,000 |
|
|
2,125,000 |
|
Huntsville, AL IDB Weekly VRDNs (Giles & Kendall, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
2,125,000 |
|
|
8,300,000 |
|
Jefferson County, AL, (Series 1999), Weekly VRDNs (Bayerische Landesbank Girozentrale LOC) |
|
|
8,300,000 |
|
|
6,800,000 |
|
Jefferson County, AL, GO Warrants (Series 1996), Weekly VRDNs (Bayerische Landesbank Girozentrale LOC) |
|
|
6,800,000 |
|
|
2,450,000 |
|
Lowndes County, AL IDB, (Series 1996), Weekly VRDNs (Warren Oil Co. Project)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,450,000 |
|
|
2,290,000 |
|
Mobile, AL Downtown Redevelopment Authority, (Series 1992), Weekly VRDNs (Mitchell Project)/(SunTrust Bank, Atlanta LOC) |
|
|
2,290,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Alabama--continued |
|
|
|
|
$ |
2,500,000 |
|
Mobile, AL IDA Weekly VRDNs (McRae's Industries, Inc.)/(Bank of America, N.A. LOC) |
|
$ |
2,500,000 |
|
|
2,000,000 |
|
Mobile, AL IDB Weekly VRDNs (American Aero Crane)/(National Bank of Canada, Montreal LOC) |
|
|
2,000,000 |
|
|
3,000,000 |
|
Montgomery-Wynlakes Governmental Utility Services Corp., Bonds (Series 1995-A), Weekly VRDNs (Vaughn Road, LLC Project)/(Amsouth Bank N.A., Birmingham LOC) |
|
|
3,000,000 |
|
|
2,175,000 |
|
Montgomery, AL IDB, (Series 1990-A), Weekly VRDNs (Industrial Partners)/(SunTrust Bank, Atlanta LOC) |
|
|
2,175,000 |
|
|
6,000,000 |
|
Montgomery, AL IDB, IDRBs (Series 1996), Weekly VRDNs (CSC Fabrication, Inc. Project)/(Chase Bank of Texas LOC) |
|
|
6,000,000 |
|
|
3,650,000 |
|
Montgomery, AL IDB, IDRBs (Series 1996A), Weekly VRDNs (Jobs Co., LLC Project)/(Columbus Bank and Trust Co., GA LOC) |
|
|
3,650,000 |
|
|
6,455,000 |
|
Perry County, AL IDB, Revenue Bonds (Series 1998), Weekly VRDNs (Alabama Catfish Feedmill, LLC)/(Regions Bank, Alabama LOC) |
|
|
6,455,000 |
|
|
2,575,000 |
|
Phoenix City, AL, (Series 1998), Weekly VRDNs (Kudzu, LLC)/(SunTrust Bank, Atlanta LOC) |
|
|
2,575,000 |
|
|
3,100,000 |
|
Piedmont, AL IDB Weekly VRDNs (Bostrom Seating, Inc.)/(Chase Manhattan Bank (USA) N.A., Wilmington LOC) |
|
|
3,100,000 |
|
|
710,000 |
|
Piedmont, AL IDB Weekly VRDNs (Industrial Partners)/(Wachovia Bank of NC, N.A. LOC) |
|
|
710,000 |
|
|
3,820,000 |
|
Prattville, AL IDB, IDR Bonds Weekly VRDNs (Kuhnash Properties/Arkay Plastics Project)/(PNC Bank, N.A. LOC) |
|
|
3,820,000 |
|
|
1,800,000 |
|
Scottsboro, AL IDB, (Series 1994), Weekly VRDNs (Maples Industries, Inc.)/(Amsouth Bank N.A., Birmingham LOC) |
|
|
1,800,000 |
|
|
1,750,000 |
|
Scottsboro, AL IDB, (Series 2000), Weekly VRDNs (Hisan, Inc.)/(Amsouth Bank N.A., Birmingham LOC) |
|
|
1,750,000 |
|
|
500,000 |
|
Scottsboro, AL IDB, IDRB (Series 1991), Weekly VRDNs (Maples Industries, Inc.)/(Amsouth Bank N.A., Birmingham LOC) |
|
|
500,000 |
|
|
2,370,000 |
|
Shelby County, AL EDA Weekly VRDNs (Saginaw Pipe of Illinois, Inc.)/(Regions Bank, Alabama LOC) |
|
|
2,370,000 |
|
|
2,585,000 |
|
Shelby County, AL EDA, (Series 1999), Weekly VRDNs (Alabama Dry Felt LLC)/(Regions Bank, Alabama LOC) |
|
|
2,585,000 |
|
|
7,575,000 |
|
St. Clair County, AL IDB, (Series 1993), Weekly VRDNs (Ebsco Industries, Inc.)/(National Australia Bank Ltd., Melbourne LOC) |
|
|
7,575,000 |
|
|
3,500,000 |
|
Sumter County, AL IDA, IRBs (Series 1995A), Weekly VRDNs (Fulghum Fibres Project (AL))/(Regions Bank, Alabama LOC) |
|
|
3,500,000 |
|
|
800,000 |
|
Sumter County, AL IDA, IRBs (Series 1995B), Weekly VRDNs (Canal Chip Project)/(Regions Bank, Alabama LOC) |
|
|
800,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Alabama--continued |
|
|
|
|
$ |
2,340,000 |
|
Tallassee, AL IDB, (Series 1998), Weekly VRDNs (Milstead Farm Group, Inc.)/(Regions Bank, Alabama LOC) |
|
$ |
2,340,000 |
|
|
2,500,000 |
|
Troy, AL IDB, (Series 1997A), Weekly VRDNs (Hudson Cos.)/(Amsouth Bank N.A., Birmingham LOC) |
|
|
2,500,000 |
|
|
3,000,000 |
|
Troy, AL IDB, IRBs (Series 1996A), Weekly VRDNs (Hudson Sauces & Dressings, Inc.)/(Amsouth Bank N.A., Birmingham LOC) |
|
|
3,000,000 |
|
|
2,000,000 |
|
Tuskegee, AL IDB, IDRB (Series 1995), Weekly VRDNs (Concrete Co. (The))/(Columbus Bank and Trust Co., GA LOC) |
|
|
2,000,000 |
|
|
3,870,000 |
|
Vincent, AL IDB Weekly VRDNs (Headquarters Partnership Project)/(National Australia Bank Ltd., Melbourne LOC) |
|
|
3,870,000 |
|
|
1,730,000 |
|
Vincent, AL IDB, (Series 1993), Weekly VRDNs (Ebsco Industries, Inc.)/(National Australia Bank Ltd., Melbourne LOC) |
|
|
1,730,000 |
|
|
3,060,000 |
|
Wetumpka, AL IDB, (Series 1997), Weekly VRDNs (US Fabtec, LLC)/(Bank of Tokyo-Mitsubishi Ltd. LOC) |
|
|
3,060,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
|
$ |
244,935,603 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 66.1% of the portfolio based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Percentage Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
100.00% |
|
0.00% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $26,925,000, which represents 10.9% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($246,262,099) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
BANs |
--Bond Anticipation Notes |
|
COL |
--Collateralized |
|
EDA |
--Economic Development Authority |
|
FNMA |
--Federal National Mortgage Association |
|
GNMA |
--Government National Mortgage Association |
|
GO |
--General Obligation |
|
HFA |
--Housing Finance Authority |
|
IDA |
--Industrial Development Authority |
|
IDB |
--Industrial Development Bond |
|
IDR |
--Industrial Development Revenue |
|
IDRB |
--Industrial Development Revenue Bond |
|
INS |
--Insured |
|
IRBs |
--Industrial Revenue Bonds |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
PCA |
--Pollution Control Authority |
|
PCR |
--Pollution Control Revenue |
|
TOBs |
--Tender Option Bonds |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
244,935,603 |
|
Cash |
|
|
|
|
|
304,258 |
|
Income receivable |
|
|
|
|
|
1,545,864 |
|
Receivable for shares sold |
|
|
|
|
|
399 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
246,786,124 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
139,330 |
|
|
|
|
Income distribution payable |
|
|
334,795 |
|
|
|
|
Accrued expenses |
|
|
49,900 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
524,025 |
|
|
||||||
|
Net assets for 246,262,099 shares outstanding |
|
|
|
|
$ |
246,262,099 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share: |
|
|
|
|
|
|
|
$246,262,099 ÷ 246,262,099 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
10,262,187 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
1,205,065 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
181,507 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
13,015 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
12,173 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
2,029 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,391 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
13,321 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
58,070 |
|
|
|
|
|
Shareholder services fee |
|
|
|
|
|
|
602,533 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
19,188 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
21,485 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
15,879 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
3,985 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
2,159,641 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(799,363 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee |
|
|
(24,101 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(823,464 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
1,336,177 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
8,926,010 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
8,926,010 |
|
|
$ |
6,196,659 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
(8,926,010 |
) |
|
|
(6,196,659 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
749,234,615 |
|
|
|
605,959,818 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
4,575,767 |
|
|
|
3,430,339 |
|
|
Cost of shares redeemed |
|
|
(746,549,033 |
) |
|
|
(560,214,016 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
7,261,349 |
|
|
|
49,176,141 |
|
|
|
||||||||
|
Change in net assets |
|
|
7,261,349 |
|
|
|
49,176,141 |
|
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
239,000,750 |
|
|
|
189,824,609 |
|
|
|
||||||||
|
End of period |
|
$ |
246,262,099 |
|
|
$ |
239,000,750 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Effective February 1, 2000, Alabama Municipal Cash Trust (the "Fund") became a portfolio of Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to provide current income exempt from federal regular income tax and the income taxes imposed by the State of Alabama consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
At October 31, 2000, the Fund, for federal tax purposes, had a capital loss carryforward of $5,008, which will reduce the Fund's taxable income arising from the future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the code, such capital loss carryforward will expire as follows:
|
Expiration Year |
|
Expiration Amount |
|
2004 |
|
$4,678 |
|
|
||
|
2006 |
|
$ 330 |
|
|
||
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees (the "Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). At October 31, 2000, capital paid-in aggregated $246,262,099.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
1999 |
|
Shares sold |
|
749,234,615 |
|
605,959,818 |
|
Shares issued to shareholders in payment of distributions declared |
|
4,575,767 |
|
3,430,339 |
|
Shares redeemed |
|
(746,549,033) |
|
(560,214,016) |
|
|
||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
7,261,349 |
|
49,176,141 |
|
|
||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.50% of the Fund's average daily net assets.
The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $604,279,410 and $594,820,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 78.2% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 13.8% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Alabama Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Alabama Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as it becomes available. To obtain the SAI, the Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Alabama Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N260
3090802A (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund that seeks to provide current income exempt from federal regular income tax and Arizona income taxes consistent with stability of principal and liquidity by investing in a portfolio of short-term, high-quality Arizona tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 8
How to Redeem Shares 9
Account and Share Information 12
Who Manages the Fund? 13
Financial Information 13
Report of Ernst & Young LLP, Independent Auditors 25
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and Arizona income taxes 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.
The Fund invests in short-term, high-quality Arizona tax exempt securities. At least 80% of the Fund's annual interest income will be exempt from federal regular income tax and Arizona income taxes. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Service Shares total returns on a calendar year-end basis.
The Fund's Institutional Service Shares are sold without a sales charge (load). The total return displayed above is based upon NAV.
The Fund's Institutional Service Shares total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.75%.
Within the period shown in the Chart, the Fund's Institutional Service Shares highest quarterly return was 0.81% (quarter ended December 31, 1999). Its lowest quarterly return was 0.61% (quarter ended March 31, 1999).
The following table represents the Fund's Institutional Service Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.86% |
|
Start of Performance1 |
|
2.96% |
1 The Fund's Institutional Service Shares start of performance date was June 10, 1998.
The Fund's Institutional Service Shares 7-Day Net Yield as of December 31, 1999 was 4.07%. You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance does not necessarily predict future performance. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Institutional Service Shares of the Fund.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions)
|
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers and Reimbursements)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.50% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee |
|
0.25% |
|
Other Expenses3 |
|
0.38% |
|
Total Annual Fund Operating Expenses |
|
1.13% |
|
1 Although not contractually obligated to do so, the adviser waived and reimbursed certain amounts during the fiscal year ended October 31, 2000. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waiver and Reimbursement of Fund Expenses |
|
0.54% |
|
Total Actual Annual Fund Operating Expenses (after waiver and reimbursement) |
|
0.59% |
|
2 The adviser voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.00% for the fiscal year ended October 31, 2000. |
||
|
3 The adviser voluntarily reimbursed certain operating expenses of the Fund. The adviser can terminate this voluntary reimbursement at any time. Other operating expenses paid by the Fund (after voluntary reimbursement) was 0.34% for the fiscal year ended October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Institutional Service Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Institutional Service Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's Institutional Service Shares operating expenses are before waivers and reimbursements as shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
|
$ |
115 |
|
|
|||
|
3 Years |
|
$ |
359 |
|
|
|||
|
5 Years |
|
$ |
622 |
|
|
|||
|
10 Years |
|
$ |
1,375 |
|
|
|||
The Fund invests in a portfolio of high-quality Arizona tax exempt securities maturing in 397 days or less. At least 80% of the Fund's annual interest income will be exempt from federal regular income tax and Arizona income taxes. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal and Arizona income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Arizona issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Arizona, the Fund may be subject to additional risks compared to funds that invest in multiple states. Arizona's economy, traditionally focused on agriculture, mining, and real estate has experienced strong diversification into the services and manufacturing sectors. The state also continues to benefit from an extensive tourism industry.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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.
When the Fund receives your transaction request in proper form (as described in this prospectus) it is processed at the next determined NAV. 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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Arizona taxpayers because it invests in Arizona municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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).
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
The Fund does not issue share certificates.
You will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Arizona taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years, or since inception, if the life of the Fund is shorter. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 25.
|
|
|
Year Ended October 31, |
|
|
Period Ended |
|
|||
|
|
|
2000 |
|
|
1999 |
1 |
|
10/31/1998 |
2 |
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.04 |
|
|
0.03 |
|
|
0.01 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.04 |
) |
|
(0.03 |
) |
|
(0.01 |
) |
|
|
|||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||
|
Total Return3 |
|
3.66 |
% |
|
2.76 |
% |
|
1.28 |
% |
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Expenses |
|
0.59 |
% |
|
0.58 |
% |
|
0.32 |
%4 |
|
|
|||||||||
|
Net investment income |
|
3.61 |
% |
|
2.73 |
% |
|
3.24 |
%4 |
|
|
|||||||||
|
Expense waiver/reimbursement5 |
|
0.54 |
% |
|
0.95 |
% |
|
2.21 |
%4 |
|
|
|||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net assets, end of period (000 omitted) |
|
$70,798 |
|
|
$33,933 |
|
|
$34,728 |
|
|
|
|||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Reflects operations for the period from June 10, 1998 (date of initial public investment) to October 31, 1998.
3 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
4 Computed on an annualized basis.
5 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--98.7%1 |
|
|
|
|
|
|
|
Arizona--97.5% |
|
|
|
|
$ |
750,000 |
|
Apache County, AZ IDA, Series A 1983, Weekly VRDNs (Tucson Electric Power Co.)/(Toronto-Dominion Bank LOC) |
|
$ |
750,000 |
|
|
3,000,000 |
|
Arizona School District, Certificates of Participation, Series 2000, 4.875% TANs (AMBAC INS), 7/31/2001 |
|
|
3,011,630 |
|
|
2,195,000 |
|
Central Arizona Water Conservation District, Series B, 6.20%, Bonds (MBIA INS), 5/1/2001 |
|
|
2,215,184 |
|
|
1,500,000 |
|
Chandler, AZ IDA, Series 1999A, Weekly VRDNs, (South Bay Circuits, Inc.)/(Comerica Bank, California LOC) |
|
|
1,500,000 |
|
|
2,400,000 |
|
Coconino County, AZ Pollution Control Corp., Series 1998, Daily VRDNs (Arizona Public Service Co.)/(KBC Bank N.V. LOC) |
|
|
2,400,000 |
|
|
1,400,000 |
|
Eloy, AZ IDA, Series 1996, Weekly VRDNs, (The Marley Cooling Tower Co.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,400,000 |
|
|
4,621,000 |
|
Flagstaff, AZ, Series 1999, Weekly VRDNs, (Joy Cone Co.)/ (Mellon Bank N.A., Pittsburgh LOC) |
|
|
4,621,000 |
|
|
3,020,000 |
2 |
Maricopa County, AZ Community College District, PT-388, 4.50%, TOBs (Merrill Lynch & Co., Inc. LIQ), Optional Tender 6/14/2001 |
|
|
3,020,000 |
|
|
1,000,000 |
|
Maricopa County, AZ Pollution Control Corp., Series 1994E, Daily VRDNs, (Arizona Public Service Co.)/(Bank of America, N.A. LOC) |
|
|
1,000,000 |
|
|
3,740,000 |
|
Maricopa County, AZ IDA, Series 1984, Weekly VRDNs, (Gannett Co., Inc.) |
|
|
3,740,000 |
|
|
5,610,000 |
|
Maricopa County, AZ IDA, Series 1999, Weekly VRDNs, (Redman Homes, Inc.)/(PNC Bank, N.A. LOC) |
|
|
5,610,000 |
|
|
2,135,000 |
|
Maricopa County, AZ IDA, Series A 1999, Daily VRDNs, (Orangewood CCRC)/(Banque Nationale de Paris LOC) |
|
|
2,135,000 |
|
|
2,000,000 |
|
Maricopa County, AZ IDA, Series A 2000, Weekly VRDNs, (Las Gardenias Apartments)/(FNMA LOC) |
|
|
2,000,000 |
|
|
700,000 |
|
Mesa, AZ Municipal Development Corp., Series 1985, 4.20%, CP (Westdeutsche Landesbank Girozentrale LOC), Mandatory Tender 12/6/2000 |
|
|
700,000 |
|
|
1,370,000 |
|
Mesa, AZ Municipal Development Corp., Series 1985, 4.25%, CP (Westdeutsche Landesbank Girozentrale LOC), Mandatory Tender 1/12/2001 |
|
|
1,370,000 |
|
|
475,000 |
|
Mohave County, AZ Unified High School, Series B, 6.00%, Bonds (FGIC INS), 7/1/2001 |
|
|
479,728 |
|
|
4,400,000 |
|
Phoenix, AZ IDA, Series 1997, Weekly VRDNs, (Interface Data Systems, Inc.)/(Bank One, Arizona N.A. LOC) |
|
|
4,400,000 |
|
|
1,860,000 |
|
Pima County, AZ IDA, Series 2000 A-3, 4.30%, Bonds (Trinity Funding Co. INV), 5/15/2001 |
|
|
1,860,000 |
|
|
2,000,000 |
|
Pima County, AZ IDA, FR/RI-L21, Series 2000, Weekly VRDNs, (Tucson Electric Power Co.)/(FSA INS)/(Lehman Brothers, Inc. LIQ) |
|
|
2,000,000 |
|
|
11,200,000 |
|
Pima County, AZ IDA, Single Family Mortgages, Roaring Fork, Series 1999-6, Weekly VRDNs, (GNMA COL)/(Bank of New York, New York LIQ) |
|
|
11,200,000 |
|
|
1,000,000 |
|
Tempe, AZ IDA, Series 1992, 4.50%, TOBs (Safeway, Inc.)/(Bankers Trust Co., New York LOC), Mandatory Tender 4/15/2001 |
|
|
1,000,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Arizona--continued |
|
|
|
|
$ |
1,880,000 |
|
Tempe, AZ, Series 2000A, 4.875%, Bonds, 1/1/2001 |
|
$ |
1,881,906 |
|
|
1,810,000 |
|
Tolleson, AZ Municipal Finance Corp., Series of 1998, Weekly VRDNs, (Citizens Utilities Co.) |
|
|
1,810,000 |
|
|
3,000,000 |
|
Tucson and Pima County, AZ IDA, Single Family Mortgage, Roaring Fork, Series 2000-13, Weekly VRDNs, (GNMA COL)/ (Bank of New York, New York LIQ) |
|
|
3,000,000 |
|
|
3,000,000 |
|
Yavapai, AZ IDA, Series B 1997, Weekly VRDNs, (Yavapai Regional Medical Center)/(FSA INS)/(Credit Local de France LIQ) |
|
|
3,000,000 |
|
|
2,900,000 |
|
Yuma County, AZ Airport Authority, Inc., Series 1997A, Weekly VRDNs, (Bank One, Arizona N.A. LOC) |
|
|
2,900,000 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
69,004,448 |
|
|
||||||
|
|
|
|
Puerto Rico--1.2% |
|
|
|
|
|
856,891 |
|
Commonwealth of Puerto Rico Municipal Revenues Collection Center, 1997A LeaseTOPS Trust Weekly VRDNs (ABN AMRO Bank N.V., Amsterdam LIQ)/(State Street Bank and Trust Co. LOC) |
|
|
856,891 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
|
$ |
69,861,339 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 58.7% of the portfolio as calculated based on total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
97.41% |
|
2.59% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $3,020,000, which represents 4.3% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($70,797,673) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
COL |
--Collateralized |
|
CP |
--Commercial Paper |
|
FGIC |
--Financial Guaranty Insurance Company |
|
FNMA |
--Federal National Mortgage Association |
|
FSA |
--Financial Security Assurance |
|
GNMA |
--Government National Mortgage Association |
|
IDA |
--Industrial Development Authority |
|
INS |
--Insured |
|
INV |
--Investment Agreement |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
TANs |
--Tax Anticipation Notes |
|
TOBs |
--Tender Option Bonds |
|
TOPs |
--Trust Obligation Participating Securities |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
69,861,339 |
|
Cash |
|
|
|
|
|
349,947 |
|
Income receivable |
|
|
|
|
|
732,143 |
|
Receivable for shares sold |
|
|
|
|
|
28,001 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
70,971,430 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
1,516 |
|
|
|
|
Income distribution payable |
|
|
144,710 |
|
|
|
|
Accrued expenses |
|
|
27,531 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
173,757 |
|
|
||||||
|
Net assets for 70,797,673 shares outstanding |
|
|
|
|
$ |
70,797,673 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share: |
|
|
|
|
|
|
|
$70,797,673 ÷ 70,797,673 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
2,858,142 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
339,859 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
125,000 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
4,924 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
29,264 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
916 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
12,313 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
9,706 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
40,444 |
|
|
|
|
|
Shareholder services fee |
|
|
|
|
|
|
169,930 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
19,620 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
12,601 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
3,275 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
663 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
768,515 |
|
|
|
|
|
|
|||||||||||
|
Waiver and Reimbursement: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(339,859 |
) |
|
|
|
|
|
|
|
|
Reimbursement of other operating expenses |
|
|
(24,631 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVER AND REIMBURSEMENT |
|
|
|
|
|
|
(364,490 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
404,025 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
2,454,117 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31, |
|
2000 |
|
|
1999 |
|
||
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
2,454,117 |
|
|
$ |
859,450 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
(2,454,117 |
) |
|
|
(859,450 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
248,928,035 |
|
|
|
59,795,359 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
841,039 |
|
|
|
402,943 |
|
|
Cost of shares redeemed |
|
|
(212,904,722 |
) |
|
|
(60,992,727 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
36,864,352 |
|
|
|
(794,425 |
) |
|
|
||||||||
|
Change in net assets |
|
|
36,864,352 |
|
|
|
(794,425 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
33,933,321 |
|
|
|
34,727,746 |
|
|
|
||||||||
|
End of period |
|
$ |
70,797,673 |
|
|
$ |
33,933,321 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Effective February 1, 2000, Arizona Municipal Cash Trust (the "Fund") became a portfolio of the Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to provide current income exempt from federal regular income tax and Arizona income taxes consistent with stability of principal and liquidity.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees (the "Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Investment Company Act of 1940.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Shares sold |
|
248,928,035 |
|
|
59,795,359 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
841,039 |
|
|
402,943 |
|
|
Shares redeemed |
|
(212,904,722 |
) |
|
(60,992,727 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
36,864,352 |
|
|
(794,425 |
) |
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee and/or reimburse certain operating expenses of the Fund. The Adviser can modify or terminate this voluntary waiver and/or reimbursement at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $217,267,000 and $199,517,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 62.1% of the securities in the portfolio of investments were backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 10.5% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Arizona Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The financial highlights for the period ended October 31, 1998 was audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Arizona Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000 is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as it becomes available. To obtain the SAI, the Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Arizona Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N450
G02372-01 (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and the Connecticut dividend and interest income tax consistent with stability of principal by investing in a portfolio of short-term, high-quality Connecticut tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 7
How to Redeem Shares 9
Account and Share Information 12
Who Manages the Fund? 13
Financial Information 13
Report of Ernst & Young LLP, Independent Auditors 25
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and the Connecticut dividend and interest income tax 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.
The Fund invests in short-term, high-quality Connecticut tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Connecticut dividend and interest income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Service Shares total returns on a calendar year-end basis.
The Fund's Shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's Institutional Service Shares total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.53%.
Within the period shown in the Chart, the Fund's Institutional Service Shares highest quarterly return was 1.34% (quarters ended June 30, 1990 and December 31, 1990). Its lowest quarterly return was 0.44% (quarter ended March 31, 1994).
The following table represents the Fund's Institutional Service Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.70% |
|
5 Years |
|
2.99% |
|
10 Years |
|
3.07% |
The Fund's 7-Day Net Yield as of December 31, 1999 was 3.64%. You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Institutional Service Shares of the Fund.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions)
|
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.50% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee3 |
|
0.25% |
|
Other Expenses |
|
0.15% |
|
Total Annual Fund Operating Expenses |
|
0.90% |
|
1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts during the fiscal year ended October 31, 2000. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waivers of Fund Expenses |
|
0.30% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.60% |
|
2 The adviser voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.30% for the fiscal year ended October 31, 2000. |
||
|
3 The shareholder services provider voluntarily waived a portion of the shareholder services fee. The shareholder services provider can terminate this voluntary waiver at any time. The shareholder services fee paid by the Fund (after the voluntary waiver) was 0.15% for the fiscal year ended October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Institutional Service Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Institutional Service Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's Institutional Service Shares operating expenses are before waivers as shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
|
$ |
92 |
|
|
|||
|
3 Years |
|
$ |
287 |
|
|
|||
|
5 Years |
|
$ |
498 |
|
|
|||
|
10 Years |
|
$ |
1,108 |
|
|
|||
The Fund invests in a portfolio of high-quality Connecticut tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Connecticut dividend and interest income tax. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal income tax and Connecticut dividend and interest income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Connecticut issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Connecticut, the Fund may be subject to additional risks compared to funds that invest in multiple states. Connecticut's economy is relatively diversified across services industries (such as insurance and finance), retail and wholesale trade, and manufacturing (concentrated in defense and transportation). These sectors were adversely impacted by the recession of the early 1990s; however, Connecticut's rate of economic growth has improved and is almost on track with the national average. In addition, the state's extraordinary wealth and resources continue to be a source of credit strength.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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.
When the Fund receives your transaction request in proper form (as described in this prospectus) it is processed at the next determined NAV. 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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Connecticut taxpayers because it invests in Connecticut municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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).
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Connecticut taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young, LLP, Independent Auditors, on page 25.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.37 |
% |
|
2.64 |
% |
|
2.98 |
% |
|
3.01 |
% |
|
3.02 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.60 |
% |
|
0.60 |
% |
|
0.60 |
% |
|
0.60 |
% |
|
0.60 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.33 |
% |
|
2.60 |
% |
|
2.93 |
% |
|
2.97 |
% |
|
2.97 |
% |
|
|
|||||||||||||||
|
Expense waiver/reimbursement3 |
|
0.30 |
% |
|
0.30 |
% |
|
0.29 |
% |
|
0.31 |
% |
|
0.32 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$254,673 |
|
$279,135 |
|
$339,567 |
|
$271,316 |
|
$227,089 |
|
||||
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on NAV, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--99.3%1 |
|
|
|
|
|
|
|
Connecticut--95.6% |
|
|
|
|
$ |
4,270,000 |
|
Branford, CT, 4.50% BANs, 7/25/2001 |
|
$ |
4,277,458 |
|
|
2,215,000 |
|
Bridgeport, CT, (2000 Series A), 4.50% GANs, 2/1/2001 |
|
|
2,216,360 |
|
|
3,785,000 |
|
Bridgeport, CT, (2000 Series B), 4.50% BANs, 2/1/2001 |
|
|
3,787,325 |
|
|
1,245,000 |
|
Connecticut Development Authority Health Care Revenue Weekly VRDNs (Corporation for Independent Living)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
1,245,000 |
|
|
2,500,000 |
|
Connecticut Development Authority Health Care Revenue, (Series 1993A), Weekly VRDNs (Corporation for Independent Living)/(Dexia Credit Local de France LOC) |
|
|
2,500,000 |
|
|
2,480,000 |
|
Connecticut Development Authority Health Care Revenue, (Series 1999), Weekly VRDNs (Corporation for Independent Living)/(Dexia Credit Local de France LOC) |
|
|
2,480,000 |
|
|
1,440,000 |
|
Connecticut Development Authority Weekly VRDNs (Banta Associates)/(HSBC Bank USA LOC) |
|
|
1,440,000 |
|
|
732,000 |
|
Connecticut Development Authority Weekly VRDNs (RSA Corp.)/(Barclays Bank PLC, London LOC) |
|
|
732,000 |
|
|
10,500,000 |
|
Connecticut Development Authority, (Series 1996A), Weekly VRDNs (Connecticut Light & Power Co.)/(AMBAC INS)/(Bank of New York LIQ) |
|
|
10,500,000 |
|
|
2,135,000 |
|
Connecticut Development Authority, (Series 1997), Weekly VRDNs (Porcelen Ltd., CT LLC)/(Firstar Bank, N.A., Cincinnati LOC) |
|
|
2,135,000 |
|
|
6,800,000 |
|
Connecticut Development Authority, (Series 1997A), Weekly VRDNs (Bradley Airport Hotel Project)/(KBC Bank N.V. LOC) |
|
|
6,800,000 |
|
|
1,465,000 |
|
Connecticut Development Authority, (Series 1999), Weekly VRDNs (Pierce Memorial Baptist Home, Inc.)/(Lasalle National Bank, Chicago LOC) |
|
|
1,465,000 |
|
|
4,000,000 |
|
Connecticut Development Authority, (Series 1999), 4.20% CP (New England Power Co.), Mandatory Tender 1/11/2001 |
|
|
4,000,000 |
|
|
4,000,000 |
|
Connecticut Development Authority, (Series 1999), 4.20% CP (New England Power Co.), Mandatory Tender 2/14/2001 |
|
|
4,000,000 |
|
|
16,300,000 |
|
Connecticut Development Authority, (Series A), Weekly VRDNs (Exeter Energy)/(Sanwa Bank Ltd., Osaka LOC) |
|
|
16,300,000 |
|
|
1,000,000 |
|
Connecticut Development Authority, (Series B), Weekly VRDNs (Exeter Energy)/(Sanwa Bank Ltd., Osaka LOC) |
|
|
1,000,000 |
|
|
9,299,000 |
|
Connecticut Development Authority, (Series C), Weekly VRDNs (Exeter Energy)/(Sanwa Bank Ltd., Osaka LOC) |
|
|
9,299,000 |
|
|
9,495,000 |
|
Connecticut State Airport, Trust Receipts (Series 1999 FR/RI-A12), Weekly VRDNs (Bradley International Airport)/(FGIC INS)/(Bayerische Hypotheken-und Vereinsbank AG LIQ), Optional Tender 11/1/2000 |
|
|
9,495,000 |
|
|
4,845,000 |
|
Connecticut State Clean Water Fund, Floats PA-547R, Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ), 7/15/2012 |
|
|
4,845,000 |
|
|
4,000,000 |
|
Connecticut State HEFA, (Series 1999A), Weekly VRDNs (Covenant Retirement Communities, Inc.)/(Lasalle Bank, N.A. LOC) |
|
|
4,000,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Connecticut--continued |
|
|
|
|
$ |
2,800,000 |
|
Connecticut State HEFA, (Series A), Weekly VRDNs (Forman School Issue)/(National Westminster Bank, PLC LOC) |
|
$ |
2,800,000 |
|
|
6,000,000 |
|
Connecticut State HEFA, (Series A), Weekly VRDNs (Hotchkiss School)/(Northern Trust Co., Chicago, IL LIQ) |
|
|
6,000,000 |
|
|
1,000,000 |
|
Connecticut State HEFA, (Series A), Weekly VRDNs (Pomfret School Issue)/(Dexia Credit Local de France LOC) |
|
|
1,000,000 |
|
|
985,000 |
|
Connecticut State HEFA, (Series A), Weekly VRDNs (Sharon Hospital)/(BankBoston, N.A. LOC) |
|
|
985,000 |
|
|
1,900,000 |
|
Connecticut State HEFA, (Series A), Weekly VRDNs (SummerWood at University Park)/(Lasalle Bank, N.A. LOC) |
|
|
1,900,000 |
|
|
9,000,000 |
|
Connecticut State HEFA, (Series B), Weekly VRDNs (Hartford Hospital)/(Fleet National Bank, Springfield, MA LOC) |
|
|
9,000,000 |
|
|
1,605,000 |
|
Connecticut State HEFA, (Series C), Weekly VRDNs (Charlotte Hungerfield Hospital)/(Bank of Boston, Connecticut LOC) |
|
|
1,605,000 |
|
|
3,000,000 |
|
Connecticut State HEFA, (Series E), Weekly VRDNs (Taft School)/(First Union National Bank, Charlotte, NC LOC) |
|
|
3,000,000 |
|
|
2,500,000 |
|
Connecticut State HEFA, (Series J), Weekly VRDNs (Hospital of Saint Raphael)/(KBC Bank N.V. LOC) |
|
|
2,500,000 |
|
|
1,900,000 |
|
Connecticut State HEFA, (Series K), Weekly VRDNs (Hospital of Saint Raphael)/(KBC Bank N.V. LOC) |
|
|
1,900,000 |
|
|
6,575,000 |
|
Connecticut State HEFA, (Series S), 4.20% CP (Yale University), Mandatory Tender 12/1/2000 |
|
|
6,575,000 |
|
|
10,000,000 |
|
Connecticut State HEFA, (Series S), 4.25% CP (Yale University), Mandatory Tender 2/8/2001 |
|
|
10,000,000 |
|
|
1,690,000 |
|
Connecticut State HFA, (P-Floats PT-81), Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) |
|
|
1,690,000 |
|
|
7,315,000 |
|
Connecticut State HFA, (Series A), Weekly VRDNs (Elm Haven Rental LP I)/(Fleet National Bank, Springfield, MA LOC) |
|
|
7,315,000 |
|
|
4,000,000 |
|
Connecticut State HFA, MERLOTS (Series 2000 BBB), Weekly VRDNs (First Union National Bank, Charlotte, NC LIQ) |
|
|
4,000,000 |
|
|
2,500,000 |
|
Connecticut State HFA, MERLOTS (Series 2000P), Weekly VRDNs (First Union National Bank, Charlotte, NC LIQ) |
|
|
2,500,000 |
|
|
11,280,000 |
|
Connecticut State HFA, (P-Floats PT-1003), Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) |
|
|
11,280,000 |
|
|
9,745,000 |
2 |
Connecticut State HFA, Variable Rate Certificates (Series 1998S), 4.35% TOBs (Bank of America, N.A. LIQ), Optional Tender 3/15/2001 |
|
|
9,745,000 |
|
|
8,400,000 |
|
Connecticut State Special Assessment Second Injury Fund, 4.15% CP (Caisse Nationale De Credit Agricole, Paris and Credit Communal de Belgique, Brussels LIQs), Mandatory Tender 1/17/2001 |
|
|
8,400,000 |
|
|
9,800,000 |
|
Connecticut State Special Assessment Unemployment Compensation Advance Fund, (Series 1993C), 4.35% TOBs (FGIC INS)/(FGIC Securities Purchase, Inc. LIQ), Optional Tender 7/1/2001 |
|
|
9,800,000 |
|
|
4,325,000 |
|
Connecticut State Special Assessment Unemployment Compensation Advance Fund, Special Assessment Refunding Bonds, (Series A), 5.50% Bonds (AMBAC INS), 11/15/2000 |
|
|
4,327,641 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Connecticut--continued |
|
|
|
|
$ |
4,000,000 |
|
Connecticut State Special Assessment Unemployment Compensation Advance Fund, Special Assessment Refunding Bonds, (Series A), 5.50% Bonds, 5/15/2001 |
|
$ |
4,025,860 |
|
|
1,900,000 |
|
Connecticut State Transportation Infrastructure Authority Weekly VRDNs (Commerzbank AG, Frankfurt LOC) |
|
|
1,900,000 |
|
|
5,000,000 |
|
Connecticut State Transportation Infrastructure Authority, 5.00% Bonds, 9/1/2001 |
|
|
5,028,436 |
|
|
8,890,000 |
2 |
Connecticut State, PT-1196, 4.30% TOBs (Merrill Lynch & Co., Inc. LIQ), Optional Tender 8/23/2001 |
|
|
8,890,000 |
|
|
4,800,000 |
|
Hartford, CT, Redevelopment Authority Weekly VRDNs (Underwood Towers)/(FSA INS)/(Societe Generale, Paris LIQ) |
|
|
4,800,000 |
|
|
2,500,000 |
|
Mansfield, CT, 5.00% BANs, 6/12/2001 |
|
|
2,505,837 |
|
|
4,330,000 |
|
New Britain, CT, (Series 1999), Weekly VRDNs (AMBAC INS)/(Bank of Nova Scotia, Toronto LIQ) |
|
|
4,330,000 |
|
|
1,800,000 |
|
Shelton, CT Housing Authority, (Series 1998), Weekly VRDNs (Crosby Commons Project)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,800,000 |
|
|
2,250,000 |
|
West Haven, CT, 4.00% Bonds (AMBAC INS), 2/1/2001 |
|
|
2,250,000 |
|
|
9,100,000 |
|
West Haven, CT, 5.00% BANs, 11/16/2000 |
|
|
9,101,267 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
243,471,184 |
|
|
||||||
|
|
|
|
Puerto Rico--3.7% |
|
|
|
|
|
9,433,841 |
|
Commonwealth of Puerto Rico Municipal Revenues Collection Center, (Series 1997A), LeaseTOPS Trust Weekly VRDNs (ABN AMRO Bank N.V., Amsterdam LIQ)/(State Street Bank and Trust Co. LOC) |
|
|
9,433,841 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
|
$ |
252,905,025 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 27.0% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
96.64% |
|
3.36% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $18,635,000, which represents 7.3% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($254,672,833) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
BANs |
--Bond Anticipation Notes |
|
CP |
--Commercial Paper |
|
FGIC |
--Financial Guaranty Insurance Company |
|
FSA |
--Financial Security Assurance |
|
GANs |
--Grant Anticipation Notes |
|
HEFA |
--Health and Education Facilities Authority |
|
HFA |
--Housing Finance Authority |
|
INS |
--Insured |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MERLOTS |
--Municipal Exempt Receipts--Liquidity Optional Tender Series |
|
TOBs |
--Tender Option Bonds |
|
TOPS |
--Trust Obligations Participating Securities |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
252,905,025 |
|
Cash |
|
|
|
|
|
125,776 |
|
Income receivable |
|
|
|
|
|
2,231,388 |
|
Receivable for shares sold |
|
|
|
|
|
112,366 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
255,374,555 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
194,832 |
|
|
|
|
Income distribution payable |
|
|
467,390 |
|
|
|
|
Accrued expenses |
|
|
39,500 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
701,722 |
|
|
||||||
|
Net assets for 254,672,833 shares outstanding |
|
|
|
|
$ |
254,672,833 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share: |
|
|
|
|
|
|
|
$254,672,833 ÷ 254,672,833 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
11,096,061 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
1,411,769 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
212,639 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
15,762 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
22,677 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
2,811 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,268 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
15,086 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
66,944 |
|
|
|
|
|
Shareholder services fee |
|
|
|
|
|
|
705,885 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
18,928 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
29,700 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
20,575 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
4,040 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
2,538,084 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(520,948 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee |
|
|
(310,589 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(831,537 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
1,706,547 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
9,389,514 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
||
|
Increase (Decrease) in Net Assets: |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
9,389,514 |
|
|
$ |
8,338,534 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
(9,389,514 |
) |
|
|
(8,338,534 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
934,272,488 |
|
|
|
936,586,293 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
3,799,444 |
|
|
|
2,685,053 |
|
|
Cost of shares redeemed |
|
|
(962,533,725 |
) |
|
|
(999,703,365 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(24,461,793 |
) |
|
|
(60,432,019 |
) |
|
|
||||||||
|
Change in net assets |
|
|
(24,461,793 |
) |
|
|
(60,432,019 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
279,134,626 |
|
|
|
339,566,645 |
|
|
|
||||||||
|
End of period |
|
$ |
254,672,833 |
|
|
$ |
279,134,626 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Effective February 1, 2000, Connecticut Municipal Cash Trust (the "Fund") became a portfolio of the Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is current income exempt from federal regular income tax and Connecticut dividend and interest income tax consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counter-parties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees (the "Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). At October 31, 2000, capital paid-in aggregated $254,672,833.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Shares sold |
|
934,272,488 |
|
|
936,586,293 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
3,799,444 |
|
|
2,685,053 |
|
|
Shares redeemed |
|
(962,533,725 |
) |
|
(999,703,365 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(24,461,793 |
) |
|
(60,432,019 |
) |
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $382,460,000 and $410,755,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 44.1% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 10.5% of total investments.
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments of the Connecticut Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 29, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Connecticut Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as it becomes available. To obtain the SAI, the Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Connecticut Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N559
9101004A-SS (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund that seeks to provide current income exempt from federal regular income tax consistent with stability of principal and liquidity and to maintain an investment portfolio that will cause its shares to be exempt from the Florida intangibles tax, by investing in a portfolio of high-quality Florida tax exempt securities maturing in 397 days or less.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 8
How to Redeem Shares 9
Account and Share Information 12
Who Manages the Fund? 13
Financial Information 13
Report of Ernst & Young LLP, Independent Auditors 28
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per share.
The Fund's investment objective is to provide current income exempt from federal regular income tax consistent with stability of principal and liquidity and to maintain an investment portfolio that will cause its shares to be exempt from the Florida state intangibles tax. 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.
The Fund invests in high-quality Florida tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single issuer, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Cash II Shares total returns on a calendar year-end basis.
The Fund's Shares are sold without a sales charge (load). The total returns displayed above are based upon net asset value.
The Fund's total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.59%.
Within the period shown in the Chart, the Fund's Cash II Shares highest quarterly return was 0.77% (quarters ended June 30, 1997 and December 31, 1997). Its lowest quarterly return was 0.56% (quarter ended March 31, 1999).
The following table represents the Fund's Cash II Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.61% |
|
Start of Performance1 |
|
2.83% |
1 The Fund's Cash II Shares start of performance date was November 27, 1995.
The Fund's Cash II Shares 7-Day Net Yield as of December 31, 1999 was 3.76%. You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Cash II Shares of the Fund.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.40% |
|
Distribution (12b-1) Fee3 |
|
0.25% |
|
Shareholder Services Fee |
|
0.25% |
|
Other Expenses |
|
0.14% |
|
Total Annual Fund Operating Expenses |
|
1.04% |
|
1 Although not contractually obligated to do so, the adviser and distributor waived certain amounts during the fiscal year ended October 31,2000. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waiver of Fund Expenses |
|
0.19% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.85% |
|
2 The adviser voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.26% for the fiscal year ended October 31, 2000. |
||
|
3 The distributor voluntarily waived a portion of the distribution (12b-1) fee. The distributor can terminate this voluntary waiver at any time. The distribution (12b-1) fee paid by the Fund's Cash II Shares (after the voluntary waiver) was 0.20% for the fiscal year ended October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Cash II Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Cash II Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's Cash II Shares operating expenses are before waivers as shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
|
$ 106 |
|
|
||
|
3 Years |
|
$ 331 |
|
|
||
|
5 Years |
|
$ 574 |
|
|
||
|
10 Years |
|
$1,271 |
|
|
||
The Fund invests in a portfolio of high-quality Florida tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors, such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in securities subject to federal income tax and the Florida intangibles tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. Fixed income securities pay interest, dividends or distributions at a specified rate. The rate may be fixed or adjusted periodically. The issuer must also repay the principal amount of the security, normally within a specified time.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Florida issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Florida, the Fund may be subject to additional risks compared to funds that invest in multiple states. Florida's economy is centered on the trade and services industry; it is also influenced by agriculture and tourism, which is the main driver of the state's economy.
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.
When the Fund receives your transaction request in proper form (as described in this prospectus) it is processed at the next determined NAV. 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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
The Fund offers two share classes: Institutional Shares and Cash II Shares, each representing interests in a single portfolio of securities. This prospectus relates only to Cash II Shares. Each share class has different expenses, which affect their performance. Contact your investment professional or call 1-800-341-7400 for more information concerning the other class.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Florida taxpayers because it invests in Florida municipal securities.
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).
The Fund has adopted a Rule 12b-1 Plan which allows it to pay marketing fees to the Distributor and investment professionals for the sale, distribution and customer servicing of the Fund's Cash II Shares. Because these Shares pay marketing fees on an ongoing basis, your investment cost may be higher over time than other shares with different sales charges and marketing fees.
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by calling the Fund at 1-800-341-7400.
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.
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Florida taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 28.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
2 |
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.03 |
|
|
0.02 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.03 |
) |
|
(0.02 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return3 |
|
3.43 |
% |
|
2.53 |
% |
|
2.83 |
% |
|
2.94 |
% |
|
2.80 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.85 |
% |
|
0.86 |
% |
|
0.85 |
% |
|
0.80 |
% |
|
0.65 |
%4 |
|
|
|||||||||||||||
|
Net investment income |
|
3.20 |
% |
|
2.52 |
% |
|
2.83 |
% |
|
2.88 |
% |
|
3.07 |
%4 |
|
|
|||||||||||||||
|
Expense waiver/reimbursement5 |
|
0.19 |
% |
|
0.24 |
% |
|
0.19 |
% |
|
0.24 |
% |
|
0.44 |
%4 |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$112,603 |
|
|
$216,926 |
|
|
$71,839 |
|
|
$62,756 |
|
|
$31,824 |
|
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Reflects operations for the period from November 27, 1995 (date of initial public investment) to October 31, 1996.
3 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
4 Computed on an annualized basis.
5 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--98.7%1 |
|
|
|
|
|
|
|
Alabama--1.0% |
|
|
|
|
$ |
3,000,000 |
|
Hoover, AL, Board of Education, (Series 2000C), 4.45% BANs, 8/1/2001 |
|
$ |
3,000,000 |
|
|
||||||
|
|
|
|
Arkansas--0.7% |
|
|
|
|
|
2,000,000 |
|
Hope, AR, Solid Waste Disposal Revenue Bonds (Series 1994), 4.70% CP (Temple-Inland Forest Products Corp.)/(Temple-Inland, Inc. GTD), Mandatory Tender 12/5/2000 |
|
|
2,000,000 |
|
|
||||||
|
|
|
|
Colorado--0.2% |
|
|
|
|
|
610,000 |
|
Denver, City & County, CO, SFM, Roaring Fork, (Series 1999-4), Weekly VRDNs (GNMA COL)/(Bank of New York, New York LIQ) |
|
|
610,000 |
|
|
||||||
|
|
|
|
Florida--74.5% |
|
|
|
|
|
8,000,000 |
2 |
ABN AMRO MuniTOPS Certificates Trust (Florida Non-AMT)/(Series 1999-11), 4.45% TOBs (Tampa Bay Water Utility System, FL)/(FGIC INS)/(ABN AMRO Bank N.V., Amsterdam LIQ), Optional Tender 4/1/2001 |
|
|
8,000,000 |
|
|
4,000,000 |
|
Alachua County, FL, IDRBs (Series 1997), Weekly VRDNs (Florida Rock Industries, Inc.)/(Bank of America, N.A. LOC) |
|
|
4,000,000 |
|
|
2,760,000 |
|
Brevard County, FL Weekly VRDNs (Greywater Investments)/(Huntington National Bank, Columbus, OH LOC) |
|
|
2,760,000 |
|
|
75,000 |
|
Brevard County, FL (Series 1997), Weekly VRDNs (Greywater Investments)/(Huntington National Bank, Columbus, OH LOC) |
|
|
75,000 |
|
|
6,400,000 |
|
Broward County, FL, HFA, (Series 1997), Weekly VRDNs (Jacaranda Village Apartments)/(HSBC Bank USA LOC) |
|
|
6,400,000 |
|
|
1,130,000 |
|
Broward County, FL, IDRB (Series 1993), Weekly VRDNs (American Whirlpool Products Corp. Project)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
1,130,000 |
|
|
1,000,000 |
|
Broward County, FL, IDRBs (Series 1997), Weekly VRDNs (Fast Real Estate Partners Ltd.)/(SunTrust Bank, Central Florida LOC) |
|
|
1,000,000 |
|
|
50,055,000 |
|
Clipper, FL, Tax-Exempt Certificates Trust (Florida AMT) (Series 1999-5), Weekly VRDNs (State Street Bank and Trust Co. LIQ) |
|
|
50,055,000 |
|
|
1,795,000 |
|
Coral Springs, FL (Series 1996), Weekly VRDNs (Royal Plastics Group Ltd.)/(SunTrust Bank, Atlanta LOC) |
|
|
1,795,000 |
|
|
2,420,000 |
|
Dade County, FL, IDA Weekly VRDNs (Futernick Associates, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,420,000 |
|
|
2,000,000 |
|
Dade County, FL, IDA, IDRBs (Series 1996A), Weekly VRDNs (U.S. Holdings, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,000,000 |
|
|
930,000 |
|
Escambia County, FL, HFA, (PA-129), Weekly VRDNs (GNMA COL)/(Merrill Lynch Capital Services Inc. LIQ) |
|
|
930,000 |
|
|
7,000,000 |
|
Escambia County, FL, HFA, (PT-121), Weekly VRDNs (GNMA COL)/(Banco Santander Central Hispano, S.A. LIQ) |
|
|
7,000,000 |
|
|
2,880,000 |
|
Eustis Health Facilities Authority, FL (Series 1992), Weekly VRDNs (Florida Hospital/Waterman, Inc.)/(SunTrust Bank, Central Florida LOC) |
|
|
2,880,000 |
|
|
2,600,000 |
|
Florida Development Finance Corp., Enterprise Bond Program Weekly VRDNs (Increte Systems LLC)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,600,000 |
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Florida--continued |
|
|
|
|
$ |
1,200,000 |
|
Florida Development Finance Corp., Enterprise Bond Program Weekly VRDNs (Mid Florida Steel Corp.)/(First Union National Bank, Charlotte, NC LOC) |
|
$ |
1,200,000 |
|
|
1,000,000 |
|
Florida Development Finance Corp., Enterprise Bond Program Weekly VRDNs (Sun & Skin Care Research, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,000,000 |
|
|
1,600,000 |
|
Florida Development Finance Corp., Enterprise Bond Program Weekly VRDNs (Trese, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,600,000 |
|
|
7,700,000 |
|
Florida HFA, (1985 Series YY), Weekly VRDNs (Monterey Meadows Apartments, FL)/(FNMA LOC) |
|
|
7,700,000 |
|
|
1,400,000 |
|
Florida HFA, (Series 1989E), Weekly VRDNs (Fairmont Oaks Project)/(Comerica Bank LOC) |
|
|
1,400,000 |
|
|
3,905,000 |
|
Florida HFA, Homeowner Mortgage Revenue Bonds, (PT-88), (Series 1996-3), Weekly VRDNs (Banco Santander Central Hispano, S.A. LIQ) |
|
|
3,905,000 |
|
|
2,000,000 |
|
Florida HFA, Multifamily Housing Revenue Bonds (1985 Series SS), Weekly VRDNs (Woodlands Apartments)/(Northern Trust Co., Chicago, IL LOC) |
|
|
2,000,000 |
|
|
6,570,000 |
|
Florida HFA, Multifamily Housing Revenue Bonds (1995 Series M), Weekly VRDNs (Bainbridge Club Apartments Project)/(FNMA LOC) |
|
|
6,570,000 |
|
|
3,395,000 |
|
Florida HFA, Trust Receipts, (Series 1998) FR/RI-12, Weekly VRDNs (MBIA INS)/(Bank of New York, New York LIQ) |
|
|
3,395,000 |
|
|
5,390,000 |
|
Florida Housing Finance Corp., MERLOTS (Series 1998B) Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
5,390,000 |
|
|
4,100,000 |
|
Greater Orlando, FL, Aviation Authority, Adjustable Rate, (Series 1997), 4.70% TOBs (Signature Flight Support Corp.)/(Bayerische Landesbank Girozentrale LOC), Optional Tender 12/1/2000 |
|
|
4,100,000 |
|
|
5,000,000 |
|
Hillsborough County, FL, IDA Weekly VRDNs (Ringhager Equipment Co.)/(SunTrust Bank, Atlanta LOC) |
|
|
5,000,000 |
|
|
1,000,000 |
|
Hillsborough County, FL, IDA, (Series 1988), Weekly VRDNs (Florida Steel Corp.)/(Bank of America, N.A. LOC) |
|
|
1,000,000 |
|
|
1,280,000 |
|
Hillsborough County, FL, IDA, IDRBs (Series 1996), Weekly VRDNs (VIGO Importing Co. Project)/(Bank of America, N.A. LOC) |
|
|
1,280,000 |
|
|
840,000 |
|
Hillsborough County, FL, IDA, Variable Rate Demand IRDBs (Series 1996), Weekly VRDNs (Trident Yacht Building Partnership Project)/(First Union National Bank, Charlotte, NC LOC) |
|
|
840,000 |
|
|
3,685,000 |
|
Hillsborough County, FL, IDA, Variable Rate IDRBs (Series 1998), Weekly VRDNs (SIFCO Industries, Inc.)/(National City Bank, Ohio LOC) |
|
|
3,685,000 |
|
|
2,400,000 |
|
Indian River County, FL, IDRBs (Series 1997), Weekly VRDNs (Ocean Spray Cranberries, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
2,400,000 |
|
|
6,500,000 |
|
Jacksonville Transportation Authority, (PA-146), Weekly VRDNs (Florida State)/(Merrill Lynch & Co., Inc. LIQ) |
|
|
6,500,000 |
|
|
6,500,000 |
|
Jacksonville, FL, IDA, (Series 1996), Weekly VRDNs (Portion PAC, Inc.)/(Heinz (H.J.) Co. GTD) |
|
|
6,500,000 |
|
|
200,000 |
|
Jacksonville, FL Weekly VRDNs (Metal Sales)/(National City Bank, Kentucky LOC) |
|
|
200,000 |
|
|
3,200,000 |
|
Lee County, FL, IDA, IDRB (Series 1994), Weekly VRDNs (Baader North America Corp.)/(Deutsche Bank AG LOC) |
|
|
3,200,000 |
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Florida--continued |
|
|
|
|
$ |
4,000,000 |
|
Liberty County, FL (Series 2000), Weekly VRDNs (Sunshine State Cypress, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
$ |
4,000,000 |
|
|
1,500,000 |
|
Lynn Haven, FL (Series 1998A), Weekly VRDNs (Merrick Industries, Inc.)/(Regions Bank, Alabama LOC) |
|
|
1,500,000 |
|
|
5,200,000 |
|
Manatee County, FL (Series 1998A), Weekly VRDNs (CFI Manufacturing, Inc. Project)/(Huntington National Bank, Columbus, OH LOC) |
|
|
5,200,000 |
|
|
2,520,000 |
|
Manatee County, FL, Variable/Fixed Rate IDRBs (Series 1998), Weekly VRDNs (Mader Electric, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
2,520,000 |
|
|
2,400,000 |
|
Martin County, FL IDA, Tender Industrial Revenue Bonds (Series 1986), Weekly VRDNs (Tampa Farm Service, Inc. Project)/(SunTrust Bank, Central Florida LOC) |
|
|
2,400,000 |
|
|
1,500,000 |
|
Okeechobee County, FL (Series 1992), Weekly VRDNs (Chambers Waste Systems)/(Morgan Guaranty Trust Co., New York LOC) |
|
|
1,500,000 |
|
|
4,915,000 |
|
Orange County, FL, HFA, (Series 1998D), Weekly VRDNs (Falcon Trace Apartments)/(Amsouth Bank N.A., Birmingham LOC) |
|
|
4,915,000 |
|
|
1,500,000 |
|
Orange County, FL, HFA, (Series 2000A), Weekly VRDNs (Florida Hospital Association Health Facilities Loan Program)/(Caisse des Depots et Consignations (CDC), Paris INV)/(BNP Paribas, Bank of New York and Bank of Nova Scotia, Toronto LIQs) |
|
|
1,500,000 |
|
|
9,270,000 |
|
Osceola County, FL, HFA, Multifamily Housing Revenue Bonds (Series 1998A), Weekly VRDNs (Arrow Ridge Apartment)/(Amsouth Bank N.A., Birmingham LOC) |
|
|
9,270,000 |
|
|
5,750,000 |
2 |
Pasco County, FL Solid Waste Authority, MERLOTS (Series 2000-A17), 4.45% TOBs (AMBAC INS)/(First Union National Bank, Charlotte, NC LIQ), Optional Tender 10/1/2001 |
|
|
5,750,000 |
|
|
3,685,000 |
|
Pinellas County Industry Council, FL, Weekly VRDNs (Loulourgas Properties)/(First Union National Bank, Charlotte, NC LOC) |
|
|
3,685,000 |
|
|
3,500,000 |
|
Pinellas County Industry Council, FL, IDRB (Series 1994), Weekly VRDNs (Genca Corp. Project)/(PNC Bank, N.A. LOC) |
|
|
3,500,000 |
|
|
2,058,000 |
|
Pinellas County Industry Council, FL, IDRB (Series 1995), Weekly VRDNs (ATR International, Inc., Project)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,058,000 |
|
|
1,805,000 |
|
Pinellas County Industry Council, FL, Variable/Fixed Rate Development Revenue Bonds (Series 1997), Weekly VRDNs (Boyd Industries, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
1,805,000 |
|
|
3,000,000 |
|
Polk County, FL, IDA, (Series 1999), Weekly VRDNs (Norman Family Partnership)/(Huntington National Bank, Columbus, OH LOC) |
|
|
3,000,000 |
|
|
1,590,000 |
|
St. Petersburg, FL, HFA Weekly VRDNs (Florida Blood Services, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
1,590,000 |
|
|
900,000 |
|
Sumter County, FL, IDA Weekly VRDNs (Great Southern Wood Preserving, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
900,000 |
|
|
3,300,000 |
|
Tamarac, FL, IDRB, (Series 1995), Weekly VRDNs (Arch Aluminum & Glass Co., Inc. Project)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
3,300,000 |
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Florida--continued |
|
|
|
|
$ |
2,495,000 |
|
Tampa Bay Water Utility System, FL, (PA-576), Weekly VRDNs (FGIC INS)/(Merrill Lynch & Co., Inc. LIQ) |
|
$ |
2,495,000 |
|
|
2,400,000 |
|
Wakulla County, FL IDA Weekly VRDNs (Winco Utilities, Inc. Project)/(Bank of America, N.A. LOC) |
|
|
2,400,000 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
225,198,000 |
|
|
||||||
|
|
|
|
Georgia--0.7% |
|
|
|
|
|
2,000,000 |
|
Cherokee County, GA School System, (Series 2000), 4.60% TANs, 12/29/2000 |
|
|
2,000,000 |
|
|
||||||
|
|
|
|
Hawaii--1.3% |
|
|
|
|
|
4,000,000 |
|
Honolulu, HI City & County, (Series 1999) Block J, 5.605% TOBs (Bayerische Landesbank Girozentrale), Mandatory Tender 12/1/2000 |
|
|
4,000,000 |
|
|
||||||
|
|
|
|
Indiana--1.2% |
|
|
|
|
|
1,390,000 |
|
Poseyville, IN (Series 1998B), Weekly VRDNs (North America Green, Inc.)/(Harris Trust & Savings Bank, Chicago LOC) |
|
|
1,390,000 |
|
|
2,315,000 |
|
Poseyville, IN (Series 1998-A), Weekly VRDNs (North America Green, Inc.)/(Harris Trust & Savings Bank, Chicago LOC) |
|
|
2,315,000 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
3,705,000 |
|
|
||||||
|
|
|
|
Kansas--0.9% |
|
|
|
|
|
2,750,000 |
|
Burlington, KS (Series B) Weekly VRDNs (Kansas City Power and Light Co.) |
|
|
2,750,000 |
|
|
||||||
|
|
|
|
Louisiana--0.8% |
|
|
|
|
|
2,500,000 |
|
New Orleans, LA, IDB Weekly VRDNs (Home Furnishings Store)/(Bank One, Louisiana LOC) |
|
|
2,500,000 |
|
|
||||||
|
|
|
|
Maryland--2.3% |
|
|
|
|
|
3,140,000 |
|
Maryland EDC (Series 1996), Weekly VRDNs (Atlantic Pharmaceutical Services, Inc.)/(Allfirst LOC) |
|
|
3,140,000 |
|
|
1,000,000 |
|
Maryland EDC (Series 2000), Weekly VRDNs (AFCO Cargo BWI II LLC)/ (SunTrust Bank LOC) |
|
|
1,000,000 |
|
|
1,000,000 |
|
Maryland EDC (Series 2000), Weekly VRDNs (Hunter Douglas Northeast, Inc.)/(SunTrust Bank LOC) |
|
|
1,000,000 |
|
|
1,750,000 |
|
Maryland State Community Development Administration, (Series 1990B) Weekly VRDNs (Cherry Hill Apartment Ltd.)/(Bank of America, N.A. LOC) |
|
|
1,750,000 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
6,890,000 |
|
|
||||||
|
|
|
|
Mississippi--2.5% |
|
|
|
|
|
7,500,000 |
|
Mississippi Home Corp. (Series 1997), Weekly VRDNs (Windsor Park Apartments)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
7,500,000 |
|
|
||||||
|
|
|
|
Multi State--6.6% |
|
|
|
|
|
15,000,000 |
|
Charter Mac Floater Certificates Trust I, (First Tranche) Weekly VRDNs (MBIA INS)/(Bayerische Landesbank Girozentrale, Credit Communal de Belgique, Brussels and Toronto Dominion Bank LIQs) |
|
|
15,000,000 |
|
|
4,951,000 |
|
Clipper Tax-Exempt Certificates Trust (AMT MultiState)/(Series 1999-3), Weekly VRDNs (AMBAC INS)/(State Street Bank and Trust Co. LIQ) |
|
|
4,951,000 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
19,951,000 |
|
|
||||||
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Oklahoma--1.0% |
|
|
|
|
$ |
3,100,000 |
|
Cleveland County, OK Home Loan Authority, Tecumseh Pointe Apartments, 5.70% TOBs (HSBC Bank USA), 3/1/2001 |
|
$ |
3,100,000 |
|
|
||||||
|
|
|
|
Pennsylvania--0.7% |
|
|
|
|
|
2,000,000 |
|
Clinton County, PA, IDA, (Series 1992A), 4.70% TOBs (International Paper Co.), Optional Tender 1/15/2001 |
|
|
2,000,000 |
|
|
||||||
|
|
|
|
Wisconsin--4.3% |
|
|
|
|
|
4,000,000 |
|
Ashland, WI School District, 4.625% TRANs, 8/30/2001 |
|
|
4,005,861 |
|
|
1,465,000 |
|
Dodgeland, WI School District, 5.20% BANs, 4/1/2001 |
|
|
1,465,000 |
|
|
2,900,000 |
|
Oregon, WI School District, 4.70% TRANs, 9/11/2001 |
|
|
2,907,164 |
|
|
3,150,000 |
|
Port Washington-Saukville, WI School District, 4.75% TRANs, 10/30/2001 |
|
|
3,157,788 |
|
|
1,500,000 |
|
Weyauwega-Fremont, WI School District, 5.00% TRANs, 8/30/2001 |
|
|
1,504,134 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
13,039,947 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
|
|
$298,243,947 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 71.8% of the portfolio based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
97.74% |
|
2.26% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $13,750,000, which represents 4.6% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($302,182,594) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
AMT |
--Alternative Minimum Tax |
|
BANs |
--Bond Anticipation Notes |
|
COL |
--Collateralized |
|
CP |
--Commercial Paper |
|
EDC |
--Economic Development Corp. |
|
FGIC |
--Financial Guaranty Insurance Company |
|
FNMA |
--Federal National Mortgage Association |
|
GNMA |
--Government National Mortgage Association |
|
GTD |
--Guaranteed |
|
HFA |
--Housing Finance Authority |
|
IDA |
--Industrial Development Authority |
|
IDB |
--Industrial Development Bond |
|
IDRB |
--Industrial Development Revenue Bond |
|
INS |
--Insured |
|
IRDB |
--Industrial Revenue Development Bond |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
PAC |
--Planned Amortization Class |
|
SFM |
--Single Family Mortgage |
|
TANs |
--Tax Anticipation Notes |
|
TOBs |
--Tender Option Bonds |
|
TRANs |
--Tax and Revenue Anticipation Notes |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
298,243,947 |
|
Cash |
|
|
|
|
|
452,983 |
|
Income receivable |
|
|
|
|
|
1,469,343 |
|
Receivable for shares sold |
|
|
|
|
|
3,451,436 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
303,617,709 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
647,399 |
|
|
|
|
Income distribution payable |
|
|
694,714 |
|
|
|
|
Accrued expenses |
|
|
93,002 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
1,435,115 |
|
|
||||||
|
Net assets for 302,182,594 shares outstanding |
|
|
|
|
$ |
302,182,594 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
$189,580,023 ÷ 189,580,023 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Cash II Shares: |
|
|
|
|
|
|
|
$112,602,571 ÷ 112,602,571 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
16,681,414 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
1,617,187 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
304,488 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
33,327 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
47,029 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
3,861 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,190 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
15,216 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
82,122 |
|
|
|
|
|
Distribution services fee--Cash II Shares |
|
|
|
|
|
|
584,629 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
426,113 |
|
|
|
|
|
Shareholder services fee--Cash II Shares |
|
|
|
|
|
|
584,629 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
30,808 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
21,705 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
20,967 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
2,082 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
3,785,353 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(555,007 |
) |
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Cash II Shares |
|
|
(116,926 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(102,267 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(774,200 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
3,011,153 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
$13,670,261 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
13,670,261 |
|
|
$ |
7,416,155 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(6,192,193 |
) |
|
|
(4,318,011 |
) |
|
Cash II Shares |
|
|
(7,478,068 |
) |
|
|
(3,098,144 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(13,670,261 |
) |
|
|
(7,416,155 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
1,708,554,247 |
|
|
|
1,426,334,652 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
3,159,629 |
|
|
|
1,899,046 |
|
|
Cost of shares redeemed |
|
|
(1,763,298,342 |
) |
|
|
(1,303,499,628 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(51,584,466 |
) |
|
|
124,734,070 |
|
|
|
||||||||
|
Change in net assets |
|
|
(51,584,466 |
) |
|
|
124,734,070 |
|
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
353,767,060 |
|
|
|
229,032,990 |
|
|
|
||||||||
|
End of period |
|
$ |
302,182,594 |
|
|
$ |
353,767,060 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statement
October 31, 2000
Effective February 1, 2000, Florida Municipal Cash Trust (the "Fund") became a portfolio of the Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The fund offers two classes of shares: Institutional Shares and Cash II Shares. The investment objective of the Fund is to provide current income exempt from federal regular income tax consistent with stability of principal and liquidity and to maintain an investment portfolio that will cause its shares to be exempt from the Florida state intangibles tax.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund/Trust based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
At October 31, 2000, the Fund, for federal tax purposes, had a capital loss carryforward of $9,492, which will reduce the Fund's taxable income arising from the future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the code, such capital loss carryforward will expire as follows:
|
Expiration Year |
|
Expiration Amount |
|
2006 |
|
$3,329 |
|
|
||
|
2007 |
|
$6,163 |
|
|
||
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees (the "Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares.
At October 31, 2000, capital paid-in aggregated $302,182,594.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
915,172,677 |
|
|
669,367,832 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
2,769,718 |
|
|
1,698,610 |
|
|
Shares redeemed |
|
(865,203,693 |
) |
|
(691,418,704 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
52,738,702 |
|
|
(20,352,262 |
) |
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Cash II Shares: |
|
|
|
|
|
|
|
Shares sold |
|
793,381,570 |
|
|
756,966,820 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
389,911 |
|
|
200,436 |
|
|
Shares redeemed |
|
(898,094,649 |
) |
|
(612,080,924 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM CASH II SHARE TRANSACTIONS |
|
(104,323,168 |
) |
|
145,086,332 |
|
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(51,584,466 |
) |
|
124,734,070 |
|
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment Adviser fee equal to 0.40% of the Fund's average daily net assets.The Adviser may voluntarily choose to waive any portion of its fee and/or reimburse certain operating expenses of the Fund. The Adviser can modify or terminate this voluntary waiver and/or reimbursement at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Institutional Shares and Cash II Shares. The Plan provides that the Fund may incur distribution expenses according to the following schedule annually, to compensate FSC.
|
Share Class |
|
Percentage of Average Daily |
|
Institutional Shares |
|
0.25% |
|
Cash II Shares |
|
0.25% |
The distributor may voluntarily choose to waive any portion of its fee. The distributor can modify or terminate this voluntary waiver at any time at its sole discretion.
For the period ended October 31, 2000, the Fund's Institutional Shares did not incur a distribution services fee.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $1,328,761,594 and $1,273,025,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 48.4% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 8.00% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Florida Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trusts' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Florida Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Reports to shareholders as it becomes available. To obtain the SAI, the Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Florida Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N344
G00537-02-CII (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund that seeks to provide current income exempt from federal regular income tax consistent with stability of principal and liquidity and to maintain an investment portfolio that will cause its shares to be exempt from the Florida intangibles tax, by investing in a portfolio of high-quality Florida tax exempt securities maturing in 397 days or less.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 8
How to Redeem Shares 9
Account and Share Information 12
Who Manages the Fund? 13
Financial Information 13
Report of Ernst & Young LLP, Independent Auditors 28
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per share.
The Fund's investment objective is to provide current income exempt from federal regular income tax consistent with stability of principal and liquidity and to maintain an investment portfolio that will cause its shares to be exempt from the Florida state intangibles tax. 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.
The Fund invests in high-quality Florida tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single issuer, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Shares total returns on a calendar year-end basis.
The Fund's Shares are sold without a sales charge (load). The total returns displayed above are based upon net asset value.
The Fund's total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.79%.
Within the period shown in the Chart, the Fund's Institutional Shares highest quarterly return was 0.93% (quarter ended December 31, 1995). Its lowest quarterly return was 0.62% (quarter ended March 31, 1999).
The following table represents the Fund's Institutional Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.87% |
|
5 Years |
|
3.17% |
|
Start of Performance1 |
|
3.18% |
1 The Fund's Institutional Shares start of performance date was September 21, 1994.
The Fund's Institutional Shares 7-Day Net Yield as of December 31, 1999 was 4.02%. You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the Fund.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.40% |
|
Distribution (12b-1) Fee3 |
|
0.25% |
|
Shareholder Services Fee4 |
|
0.25% |
|
Other Expenses |
|
0.14% |
|
Total Annual Fund Operating Expenses |
|
1.04% |
|
|
||
|
1 Although not contractually obligated to do so, the adviser, distributor and shareholder services provider waived certain amounts during the fiscal year ended October 31, 2000. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waivers of Fund Expenses |
|
0.45% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.59% |
|
2 The adviser voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.26% for the fiscal year ended October 31, 2000. |
||
|
3 Institutional Shares did not pay or accrue the distribution (12b-1) fee during the fiscal year ended October 31, 2000. Institutional Shares have no present intention of paying or accruing the distribution (12b-1) fee during the fiscal year ending October 31, 2001. |
||
|
4 The shareholder services provider voluntarily waived a portion of the shareholder services fee. The shareholder services provider can terminate this voluntary waiver at any time. The shareholder services fee paid by the Fund's Institutional Shares (after the voluntary waiver) was 0.19% for the fiscal year ended October 31, 2000. |
||
This 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 shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
|
$ 106 |
|
|
||
|
3 Years |
|
$ 331 |
|
|
||
|
5 Years |
|
$ 574 |
|
|
||
|
10 Years |
|
$1,271 |
|
|
||
The Fund invests in a portfolio of high-quality Florida tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors, such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in securities subject to federal income tax and the Florida intangibles tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. Fixed income securities pay interest, dividends or distributions at a specified rate. The rate may be fixed or adjusted periodically. The issuer must also repay the principal amount of the security, normally within a specified time.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Florida issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Florida, the Fund may be subject to additional risks compared to funds that invest in multiple states. Florida's economy is centered on the trade and services industry; it is also influenced by agriculture and tourism, which is the main driver of the state's economy.
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.
When the Fund receives your transaction request in proper form (as described in this prospectus) it is processed at the next determined NAV. 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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
The Fund offers two share classes: Institutional Shares and Cash II 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, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Florida taxpayers because it invests in Florida municipal securities.
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).
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 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.
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by calling the Fund at 1-800-341-7400.
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.
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Florida taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young, LLP, Independent Auditors, on page 28.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.04 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.04 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.70 |
% |
|
2.79 |
% |
|
3.09 |
% |
|
3.20 |
% |
|
3.20 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.59 |
% |
|
0.58 |
% |
|
0.58 |
% |
|
0.54 |
% |
|
0.49 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.63 |
% |
|
2.76 |
% |
|
2.96 |
% |
|
3.15 |
% |
|
3.17 |
% |
|
|
|||||||||||||||
|
Expense waiver/reimbursement3 |
|
0.20 |
% |
|
0.27 |
% |
|
0.19 |
% |
|
0.25 |
% |
|
0.34 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$189,580 |
|
|
$136,841 |
|
|
$157,194 |
|
|
$479,860 |
|
|
$500,993 |
|
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--98.7%1 |
|
|
|
|
|
|
|
Alabama--1.0% |
|
|
|
|
$ |
3,000,000 |
|
Hoover, AL, Board of Education, (Series 2000C), 4.45% BANs, 8/1/2001 |
|
$ |
3,000,000 |
|
|
||||||
|
|
|
|
Arkansas--0.7% |
|
|
|
|
|
2,000,000 |
|
Hope, AR, Solid Waste Disposal Revenue Bonds (Series 1994), 4.70% CP (Temple-Inland Forest Products Corp.)/(Temple-Inland, Inc. GTD), Mandatory Tender 12/5/2000 |
|
|
2,000,000 |
|
|
||||||
|
|
|
|
Colorado--0.2% |
|
|
|
|
|
610,000 |
|
Denver, City & County, CO, SFM, Roaring Fork, (Series 1999-4), Weekly VRDNs (GNMA COL)/(Bank of New York, New York LIQ) |
|
|
610,000 |
|
|
||||||
|
|
|
|
Florida--74.5% |
|
|
|
|
|
8,000,000 |
2 |
ABN AMRO MuniTOPS Certificates Trust (Florida Non-AMT)/(Series 1999-11), 4.45% TOBs (Tampa Bay Water Utility System, FL)/(FGIC INS)/(ABN AMRO Bank N.V., Amsterdam LIQ), Optional Tender 4/1/2001 |
|
|
8,000,000 |
|
|
4,000,000 |
|
Alachua County, FL, IDRBs (Series 1997), Weekly VRDNs (Florida Rock Industries, Inc.)/(Bank of America, N.A. LOC) |
|
|
4,000,000 |
|
|
2,760,000 |
|
Brevard County, FL Weekly VRDNs (Greywater Investments)/(Huntington National Bank, Columbus, OH LOC) |
|
|
2,760,000 |
|
|
75,000 |
|
Brevard County, FL (Series 1997), Weekly VRDNs (Greywater Investments)/(Huntington National Bank, Columbus, OH LOC) |
|
|
75,000 |
|
|
6,400,000 |
|
Broward County, FL, HFA, (Series 1997), Weekly VRDNs (Jacaranda Village Apartments)/(HSBC Bank USA LOC) |
|
|
6,400,000 |
|
|
1,130,000 |
|
Broward County, FL, IDRB (Series 1993), Weekly VRDNs (American Whirlpool Products Corp. Project)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
1,130,000 |
|
|
1,000,000 |
|
Broward County, FL, IDRBs (Series 1997), Weekly VRDNs (Fast Real Estate Partners Ltd.)/(SunTrust Bank, Central Florida LOC) |
|
|
1,000,000 |
|
|
50,055,000 |
|
Clipper, FL, Tax-Exempt Certificates Trust (Florida AMT) (Series 1999-5), Weekly VRDNs (State Street Bank and Trust Co. LIQ) |
|
|
50,055,000 |
|
|
1,795,000 |
|
Coral Springs, FL (Series 1996), Weekly VRDNs (Royal Plastics Group Ltd.)/(SunTrust Bank, Atlanta LOC) |
|
|
1,795,000 |
|
|
2,420,000 |
|
Dade County, FL, IDA Weekly VRDNs (Futernick Associates, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,420,000 |
|
|
2,000,000 |
|
Dade County, FL, IDA, IDRBs (Series 1996A), Weekly VRDNs (U.S. Holdings, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,000,000 |
|
|
930,000 |
|
Escambia County, FL, HFA, (PA-129), Weekly VRDNs (GNMA COL)/(Merrill Lynch Capital Services Inc. LIQ) |
|
|
930,000 |
|
|
7,000,000 |
|
Escambia County, FL, HFA, (PT-121), Weekly VRDNs (GNMA COL)/(Banco Santander Central Hispano, S.A. LIQ) |
|
|
7,000,000 |
|
|
2,880,000 |
|
Eustis Health Facilities Authority, FL (Series 1992), Weekly VRDNs (Florida Hospital/Waterman, Inc.)/(SunTrust Bank, Central Florida LOC) |
|
|
2,880,000 |
|
|
2,600,000 |
|
Florida Development Finance Corp., Enterprise Bond Program Weekly VRDNs (Increte Systems LLC)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,600,000 |
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Florida--continued |
|
|
|
|
$ |
1,200,000 |
|
Florida Development Finance Corp., Enterprise Bond Program Weekly VRDNs (Mid Florida Steel Corp.)/(First Union National Bank, Charlotte, NC LOC) |
|
$ |
1,200,000 |
|
|
1,000,000 |
|
Florida Development Finance Corp., Enterprise Bond Program Weekly VRDNs (Sun & Skin Care Research, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,000,000 |
|
|
1,600,000 |
|
Florida Development Finance Corp., Enterprise Bond Program Weekly VRDNs (Trese, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,600,000 |
|
|
7,700,000 |
|
Florida HFA, (1985 Series YY), Weekly VRDNs (Monterey Meadows Apartments, FL)/(FNMA LOC) |
|
|
7,700,000 |
|
|
1,400,000 |
|
Florida HFA, (Series 1989E), Weekly VRDNs (Fairmont Oaks Project)/(Comerica Bank LOC) |
|
|
1,400,000 |
|
|
3,905,000 |
|
Florida HFA, Homeowner Mortgage Revenue Bonds, (PT-88), (Series 1996-3), Weekly VRDNs (Banco Santander Central Hispano, S.A. LIQ) |
|
|
3,905,000 |
|
|
2,000,000 |
|
Florida HFA, Multifamily Housing Revenue Bonds (1985 Series SS), Weekly VRDNs (Woodlands Apartments)/(Northern Trust Co., Chicago, IL LOC) |
|
|
2,000,000 |
|
|
6,570,000 |
|
Florida HFA, Multifamily Housing Revenue Bonds (1995 Series M), Weekly VRDNs (Bainbridge Club Apartments Project)/(FNMA LOC) |
|
|
6,570,000 |
|
|
3,395,000 |
|
Florida HFA, Trust Receipts, (Series 1998) FR/RI-12, Weekly VRDNs (MBIA INS)/(Bank of New York, New York LIQ) |
|
|
3,395,000 |
|
|
5,390,000 |
|
Florida Housing Finance Corp., MERLOTS (Series 1998B) Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
5,390,000 |
|
|
4,100,000 |
|
Greater Orlando, FL, Aviation Authority, Adjustable Rate, (Series 1997), 4.70% TOBs (Signature Flight Support Corp.)/(Bayerische Landesbank Girozentrale LOC), Optional Tender 12/1/2000 |
|
|
4,100,000 |
|
|
5,000,000 |
|
Hillsborough County, FL, IDA Weekly VRDNs (Ringhager Equipment Co.)/(SunTrust Bank, Atlanta LOC) |
|
|
5,000,000 |
|
|
1,000,000 |
|
Hillsborough County, FL, IDA, (Series 1988), Weekly VRDNs (Florida Steel Corp.)/(Bank of America, N.A. LOC) |
|
|
1,000,000 |
|
|
1,280,000 |
|
Hillsborough County, FL, IDA, IDRBs (Series 1996), Weekly VRDNs (VIGO Importing Co. Project)/(Bank of America, N.A. LOC) |
|
|
1,280,000 |
|
|
840,000 |
|
Hillsborough County, FL, IDA, Variable Rate Demand IRDBs (Series 1996), Weekly VRDNs (Trident Yacht Building Partnership Project)/(First Union National Bank, Charlotte, NC LOC) |
|
|
840,000 |
|
|
3,685,000 |
|
Hillsborough County, FL, IDA, Variable Rate IDRBs (Series 1998), Weekly VRDNs (SIFCO Industries, Inc.)/(National City Bank, Ohio LOC) |
|
|
3,685,000 |
|
|
2,400,000 |
|
Indian River County, FL, IDRBs (Series 1997), Weekly VRDNs (Ocean Spray Cranberries, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
2,400,000 |
|
|
6,500,000 |
|
Jacksonville Transportation Authority, (PA-146), Weekly VRDNs (Florida State)/(Merrill Lynch & Co., Inc. LIQ) |
|
|
6,500,000 |
|
|
6,500,000 |
|
Jacksonville, FL, IDA, (Series 1996), Weekly VRDNs (Portion PAC, Inc.)/(Heinz (H.J.) Co. GTD) |
|
|
6,500,000 |
|
|
200,000 |
|
Jacksonville, FL Weekly VRDNs (Metal Sales)/(National City Bank, Kentucky LOC) |
|
|
200,000 |
|
|
3,200,000 |
|
Lee County, FL, IDA, IDRB (Series 1994), Weekly VRDNs (Baader North America Corp.)/(Deutsche Bank AG LOC) |
|
|
3,200,000 |
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Florida--continued |
|
|
|
|
$ |
4,000,000 |
|
Liberty County, FL (Series 2000), Weekly VRDNs (Sunshine State Cypress, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
$ |
4,000,000 |
|
|
1,500,000 |
|
Lynn Haven, FL (Series 1998A), Weekly VRDNs (Merrick Industries, Inc.)/(Regions Bank, Alabama LOC) |
|
|
1,500,000 |
|
|
5,200,000 |
|
Manatee County, FL (Series 1998A), Weekly VRDNs (CFI Manufacturing, Inc. Project)/(Huntington National Bank, Columbus, OH LOC) |
|
|
5,200,000 |
|
|
2,520,000 |
|
Manatee County, FL, Variable/Fixed Rate IDRBs (Series 1998), Weekly VRDNs (Mader Electric, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
2,520,000 |
|
|
2,400,000 |
|
Martin County, FL IDA, Tender Industrial Revenue Bonds (Series 1986), Weekly VRDNs (Tampa Farm Service, Inc. Project)/(SunTrust Bank, Central Florida LOC) |
|
|
2,400,000 |
|
|
1,500,000 |
|
Okeechobee County, FL (Series 1992), Weekly VRDNs (Chambers Waste Systems)/(Morgan Guaranty Trust Co., New York LOC) |
|
|
1,500,000 |
|
|
4,915,000 |
|
Orange County, FL, HFA, (Series 1998D), Weekly VRDNs (Falcon Trace Apartments)/(Amsouth Bank N.A., Birmingham LOC) |
|
|
4,915,000 |
|
|
1,500,000 |
|
Orange County, FL, HFA, (Series 2000A), Weekly VRDNs (Florida Hospital Association Health Facilities Loan Program)/(Caisse des Depots et Consignations (CDC), Paris INV)/(BNP Paribas, Bank of New York and Bank of Nova Scotia, Toronto LIQs) |
|
|
1,500,000 |
|
|
9,270,000 |
|
Osceola County, FL, HFA, Multifamily Housing Revenue Bonds (Series 1998A), Weekly VRDNs (Arrow Ridge Apartment)/(Amsouth Bank N.A., Birmingham LOC) |
|
|
9,270,000 |
|
|
5,750,000 |
2 |
Pasco County, FL Solid Waste Authority, MERLOTS (Series 2000-A17), 4.45% TOBs (AMBAC INS)/(First Union National Bank, Charlotte, NC LIQ), Optional Tender 10/1/2001 |
|
|
5,750,000 |
|
|
3,685,000 |
|
Pinellas County Industry Council, FL, Weekly VRDNs (Loulourgas Properties)/(First Union National Bank, Charlotte, NC LOC) |
|
|
3,685,000 |
|
|
3,500,000 |
|
Pinellas County Industry Council, FL, IDRB (Series 1994), Weekly VRDNs (Genca Corp. Project)/(PNC Bank, N.A. LOC) |
|
|
3,500,000 |
|
|
2,058,000 |
|
Pinellas County Industry Council, FL, IDRB (Series 1995), Weekly VRDNs (ATR International, Inc., Project)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,058,000 |
|
|
1,805,000 |
|
Pinellas County Industry Council, FL, Variable/Fixed Rate Development Revenue Bonds (Series 1997), Weekly VRDNs (Boyd Industries, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
1,805,000 |
|
|
3,000,000 |
|
Polk County, FL, IDA, (Series 1999), Weekly VRDNs (Norman Family Partnership)/(Huntington National Bank, Columbus, OH LOC) |
|
|
3,000,000 |
|
|
1,590,000 |
|
St. Petersburg, FL, HFA Weekly VRDNs (Florida Blood Services, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
1,590,000 |
|
|
900,000 |
|
Sumter County, FL, IDA Weekly VRDNs (Great Southern Wood Preserving, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
900,000 |
|
|
3,300,000 |
|
Tamarac, FL, IDRB, (Series 1995), Weekly VRDNs (Arch Aluminum & Glass Co., Inc. Project)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
3,300,000 |
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Florida--continued |
|
|
|
|
$ |
2,495,000 |
|
Tampa Bay Water Utility System, FL, (PA-576), Weekly VRDNs (FGIC INS)/(Merrill Lynch & Co., Inc. LIQ) |
|
$ |
2,495,000 |
|
|
2,400,000 |
|
Wakulla County, FL IDA Weekly VRDNs (Winco Utilities, Inc. Project)/(Bank of America, N.A. LOC) |
|
|
2,400,000 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
225,198,000 |
|
|
||||||
|
|
|
|
Georgia--0.7% |
|
|
|
|
|
2,000,000 |
|
Cherokee County, GA School System, (Series 2000), 4.60% TANs, 12/29/2000 |
|
|
2,000,000 |
|
|
||||||
|
|
|
|
Hawaii--1.3% |
|
|
|
|
|
4,000,000 |
|
Honolulu, HI City & County, (Series 1999) Block J, 5.605% TOBs (Bayerische Landesbank Girozentrale), Mandatory Tender 12/1/2000 |
|
|
4,000,000 |
|
|
||||||
|
|
|
|
Indiana--1.2% |
|
|
|
|
|
1,390,000 |
|
Poseyville, IN (Series 1998B), Weekly VRDNs (North America Green, Inc.)/(Harris Trust & Savings Bank, Chicago LOC) |
|
|
1,390,000 |
|
|
2,315,000 |
|
Poseyville, IN (Series 1998-A), Weekly VRDNs (North America Green, Inc.)/(Harris Trust & Savings Bank, Chicago LOC) |
|
|
2,315,000 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
3,705,000 |
|
|
||||||
|
|
|
|
Kansas--0.9% |
|
|
|
|
|
2,750,000 |
|
Burlington, KS (Series B) Weekly VRDNs (Kansas City Power and Light Co.) |
|
|
2,750,000 |
|
|
||||||
|
|
|
|
Louisiana--0.8% |
|
|
|
|
|
2,500,000 |
|
New Orleans, LA, IDB Weekly VRDNs (Home Furnishings Store)/(Bank One, Louisiana LOC) |
|
|
2,500,000 |
|
|
||||||
|
|
|
|
Maryland--2.3% |
|
|
|
|
|
3,140,000 |
|
Maryland EDC (Series 1996), Weekly VRDNs (Atlantic Pharmaceutical Services, Inc.)/(Allfirst LOC) |
|
|
3,140,000 |
|
|
1,000,000 |
|
Maryland EDC (Series 2000), Weekly VRDNs (AFCO Cargo BWI II LLC)/ (SunTrust Bank LOC) |
|
|
1,000,000 |
|
|
1,000,000 |
|
Maryland EDC (Series 2000), Weekly VRDNs (Hunter Douglas Northeast, Inc.)/(SunTrust Bank LOC) |
|
|
1,000,000 |
|
|
1,750,000 |
|
Maryland State Community Development Administration, (Series 1990B) Weekly VRDNs (Cherry Hill Apartment Ltd.)/(Bank of America, N.A. LOC) |
|
|
1,750,000 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
6,890,000 |
|
|
||||||
|
|
|
|
Mississippi--2.5% |
|
|
|
|
|
7,500,000 |
|
Mississippi Home Corp. (Series 1997), Weekly VRDNs (Windsor Park Apartments)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
7,500,000 |
|
|
||||||
|
|
|
|
Multi State--6.6% |
|
|
|
|
|
15,000,000 |
|
Charter Mac Floater Certificates Trust I, (First Tranche) Weekly VRDNs (MBIA INS)/(Bayerische Landesbank Girozentrale, Credit Communal de Belgique, Brussels and Toronto Dominion Bank LIQs) |
|
|
15,000,000 |
|
|
4,951,000 |
|
Clipper Tax-Exempt Certificates Trust (AMT MultiState)/(Series 1999-3), Weekly VRDNs (AMBAC INS)/(State Street Bank and Trust Co. LIQ) |
|
|
4,951,000 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
19,951,000 |
|
|
||||||
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Oklahoma--1.0% |
|
|
|
|
$ |
3,100,000 |
|
Cleveland County, OK Home Loan Authority, Tecumseh Pointe Apartments, 5.70% TOBs (HSBC Bank USA), 3/1/2001 |
|
$ |
3,100,000 |
|
|
||||||
|
|
|
|
Pennsylvania--0.7% |
|
|
|
|
|
2,000,000 |
|
Clinton County, PA, IDA, (Series 1992A), 4.70% TOBs (International Paper Co.), Optional Tender 1/15/2001 |
|
|
2,000,000 |
|
|
||||||
|
|
|
|
Wisconsin--4.3% |
|
|
|
|
|
4,000,000 |
|
Ashland, WI School District, 4.625% TRANs, 8/30/2001 |
|
|
4,005,861 |
|
|
1,465,000 |
|
Dodgeland, WI School District, 5.20% BANs, 4/1/2001 |
|
|
1,465,000 |
|
|
2,900,000 |
|
Oregon, WI School District, 4.70% TRANs, 9/11/2001 |
|
|
2,907,164 |
|
|
3,150,000 |
|
Port Washington-Saukville, WI School District, 4.75% TRANs, 10/30/2001 |
|
|
3,157,788 |
|
|
1,500,000 |
|
Weyauwega-Fremont, WI School District, 5.00% TRANs, 8/30/2001 |
|
|
1,504,134 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
13,039,947 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
|
|
$298,243,947 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 71.8% of the portfolio based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
97.74% |
|
2.26% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $13,750,000, which represents 4.6% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($302,182,594) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
AMT |
--Alternative Minimum Tax |
|
BANs |
--Bond Anticipation Notes |
|
COL |
--Collateralized |
|
CP |
--Commercial Paper |
|
EDC |
--Economic Development Corp. |
|
FGIC |
--Financial Guaranty Insurance Company |
|
FNMA |
--Federal National Mortgage Association |
|
GNMA |
--Government National Mortgage Association |
|
GTD |
--Guaranteed |
|
HFA |
--Housing Finance Authority |
|
IDA |
--Industrial Development Authority |
|
IDB |
--Industrial Development Bond |
|
IDRB |
--Industrial Development Revenue Bond |
|
INS |
--Insured |
|
IRDB |
--Industrial Revenue Development Bond |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
PAC |
--Planned Amortization Class |
|
SFM |
--Single Family Mortgage |
|
TANs |
--Tax Anticipation Notes |
|
TOBs |
--Tender Option Bonds |
|
TRANs |
--Tax and Revenue Anticipation Notes |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
298,243,947 |
|
Cash |
|
|
|
|
|
452,983 |
|
Income receivable |
|
|
|
|
|
1,469,343 |
|
Receivable for shares sold |
|
|
|
|
|
3,451,436 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
303,617,709 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
647,399 |
|
|
|
|
Income distribution payable |
|
|
694,714 |
|
|
|
|
Accrued expenses |
|
|
93,002 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
1,435,115 |
|
|
||||||
|
Net assets for 302,182,594 shares outstanding |
|
|
|
|
$ |
302,182,594 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
$189,580,023 ÷ 189,580,023 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Cash II Shares: |
|
|
|
|
|
|
|
$112,602,571 ÷ 112,602,571 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
16,681,414 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
1,617,187 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
304,488 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
33,327 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
47,029 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
3,861 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,190 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
15,216 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
82,122 |
|
|
|
|
|
Distribution services fee--Cash II Shares |
|
|
|
|
|
|
584,629 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
426,113 |
|
|
|
|
|
Shareholder services fee--Cash II Shares |
|
|
|
|
|
|
584,629 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
30,808 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
21,705 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
20,967 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
2,082 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
3,785,353 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(555,007 |
) |
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Cash II Shares |
|
|
(116,926 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(102,267 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(774,200 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
3,011,153 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
$13,670,261 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
13,670,261 |
|
|
$ |
7,416,155 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(6,192,193 |
) |
|
|
(4,318,011 |
) |
|
Cash II Shares |
|
|
(7,478,068 |
) |
|
|
(3,098,144 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(13,670,261 |
) |
|
|
(7,416,155 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
1,708,554,247 |
|
|
|
1,426,334,652 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
3,159,629 |
|
|
|
1,899,046 |
|
|
Cost of shares redeemed |
|
|
(1,763,298,342 |
) |
|
|
(1,303,499,628 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(51,584,466 |
) |
|
|
124,734,070 |
|
|
|
||||||||
|
Change in net assets |
|
|
(51,584,466 |
) |
|
|
124,734,070 |
|
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
353,767,060 |
|
|
|
229,032,990 |
|
|
|
||||||||
|
End of period |
|
$ |
302,182,594 |
|
|
$ |
353,767,060 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statement
October 31, 2000
Effective February 1, 2000, Florida Municipal Cash Trust (the "Fund") became a portfolio of the Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The fund offers two classes of shares: Institutional Shares and Cash II Shares. The investment objective of the Fund is to provide current income exempt from federal regular income tax consistent with stability of principal and liquidity and to maintain an investment portfolio that will cause its shares to be exempt from the Florida state intangibles tax.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund/Trust based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
At October 31, 2000, the Fund, for federal tax purposes, had a capital loss carryforward of $9,492, which will reduce the Fund's taxable income arising from the future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the code, such capital loss carryforward will expire as follows:
|
Expiration Year |
|
Expiration Amount |
|
2006 |
|
$3,329 |
|
|
||
|
2007 |
|
$6,163 |
|
|
||
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees (the "Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares.
At October 31, 2000, capital paid-in aggregated $302,182,594.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
915,172,677 |
|
|
669,367,832 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
2,769,718 |
|
|
1,698,610 |
|
|
Shares redeemed |
|
(865,203,693 |
) |
|
(691,418,704 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
52,738,702 |
|
|
(20,352,262 |
) |
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Cash II Shares: |
|
|
|
|
|
|
|
Shares sold |
|
793,381,570 |
|
|
756,966,820 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
389,911 |
|
|
200,436 |
|
|
Shares redeemed |
|
(898,094,649 |
) |
|
(612,080,924 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM CASH II SHARE TRANSACTIONS |
|
(104,323,168 |
) |
|
145,086,332 |
|
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(51,584,466 |
) |
|
124,734,070 |
|
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment Adviser fee equal to 0.40% of the Fund's average daily net assets.The Adviser may voluntarily choose to waive any portion of its fee and/or reimburse certain operating expenses of the Fund. The Adviser can modify or terminate this voluntary waiver and/or reimbursement at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Institutional Shares and Cash II Shares. The Plan provides that the Fund may incur distribution expenses according to the following schedule annually, to compensate FSC.
|
Share Class |
|
Percentage of Average Daily |
|
Institutional Shares |
|
0.25% |
|
Cash II Shares |
|
0.25% |
The distributor may voluntarily choose to waive any portion of its fee. The distributor can modify or terminate this voluntary waiver at any time at its sole discretion.
For the period ended October 31, 2000, the Fund's Institutional Shares did not incur a distribution services fee.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $1,328,761,594 and $1,273,025,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 48.4% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 8.00% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Florida Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Florida Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as it becomes available. To obtain the SAI, the Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Florida Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N336
005392 (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
[Graphic Representation Omitted--See Appendix]
A Portfolio of Money Market Obligations Trust
A money market mutual fund seeking to provide dividend income exempt from federal regular income taxes while seeking relative stability of principal by investing in a portfolio of short-term, high-quality tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Not FDIC Insured
May Lose Value
No Bank Guarantee
| Risk/Return Summary | 1 | |
| What are the Fund's Fees and Expenses? | 3 | |
| What are the Fund's Investment Strategies? | 4 | |
| What are the Principal Securities in Which the Fund Invests? | 5 | |
| What are the Specific Risks of Investing in the Fund? | 6 | |
| What do Shares Cost? | 6 | |
| How is the Fund Sold? | 7 | |
| How to Purchase Shares | 7 | |
| How to Redeem Shares | 9 | |
| Account and Share Information | 11 | |
| Who Manages the Fund? | 12 | |
| Financial Information | 12 | |
| Independent Auditor's Report | 29 |
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide dividend income exempt from federal regular income taxes while seeking relative 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.
The Fund invests in a portfolio of short-term, high-quality tax exempt securities. At least 80% of the Fund's annual interest income will be exempt from federal regular income tax. Interest income from the Fund's investments may be subject to federal alternative minimum tax for individuals and corporations (AMT). The Fund's dollar-weighted average portfolio maturity will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, 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.
[Graphic Representation Omitted--See Appendix]
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's total returns on a calendar year-end basis.
The Fund's Shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.80%.
Within the period shown in the Chart, the Fund's highest quarterly return was 1.43% (quarter ended December 31, 1990). Its lowest quarterly return was 0.49% (quarter ended March 31, 1994).
The following table represents the Fund's Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
3.00% |
|
|
5 Years |
3.24% |
|
|
10 Years |
3.36% |
The Fund's 7-Day Net Yield as of December 31, 1999 was 4.23%. You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund.
| Shareholder Fees | ||
| Fees Paid Directly From Your Investment | ||
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | None | |
| Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) | None | |
| Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) | None | |
| Redemption Fee (as a percentage of amount redeemed, if applicable) | None | |
| Exchange Fee | None | |
| Annual Fund Operating Expenses (Before Waivers) | ||
| Expenses That are Deducted From Fund Assets (as a percentage of average net assets) | ||
| Management Fee1 | 0.40% | |
| Distribution (12b-1) Fee | None | |
| Shareholder Services Fee2 | 0.25% | |
| Other Expenses | 0.12% | |
| Total Annual Fund Operating Expenses (before waivers) | 0.77% | |
| Total Waiver of Fund Operating Expenses (contractual) | 0.32% | |
| Total Actual Annual Fund Operating Expenses (after waivers) | 0.45% | |
| 1 Pursuant to the investment advisory contract, the adviser waived a portion of the management fee. The management fee paid by the Fund (after the contractual waiver) was 0.28% for the period ended October 31, 2000. Shareholders must approve any change to the contractual waiver. | ||
| 2 A portion of the shareholder services fee has been waived. The shareholder services fee paid by the Fund (after the voluntary waiver) was 0.05% for the period ended October 31, 2000. | ||
This Example is intended to help you compare the cost of investing in the Fund's Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's Shares operating expenses as shown in the table remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
| 1 Year | $ 46 | |
| 3 Years | $144 | |
| 5 Years | $252 | |
| 10 Years | $567 |
The Fund invests primarily in a portfolio of high-quality tax exempt securities maturing in 397 days or less. At least 80% of the Fund's annual interest income will be exempt from federal regular income tax. Interest from the Fund's investments may be subject to AMT. The Fund will have an average portfolio maturity of 90 days or less. The Fund's investment adviser (Adviser) actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors, such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash or securities subject to federal regular income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Temporary investments will be of comparable quality to other securities in which the Fund invests.
Tax exempt securities are fixed income securities that pay interest that is not subject to regular federal income taxes. 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. The issuer of a fixed income security must also repay the principal amount of the security, normally within a specified time.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
The following describes the types of tax exempt securities in which the Fund may invest.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests will be rated in the highest short-term rating category by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Services. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely upon the Adviser's credit assessment.
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.
A substantial part of the Fund's portfolio may be comprised of securities that are credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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. When the Fund receives your transaction request in proper form (as described in this prospectus) it is processed at the next determined NAV. 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 $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.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals.
The Distributor and its affiliates may pay out of their assets other amounts (including items of material value) to investment professionals for marketing and servicing Shares. The Distributor is a subsidiary of Federated Investors, Inc. (Federated).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
You may establish an account with your financial institution to automatically purchase Shares on predetermined 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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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.
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
PO 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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
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.
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.
You will receive periodic statements reporting all account activity, including dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
The Adviser receives an annual investment advisory fee of 0.40% of the Fund's average daily net assets. Under the investment advisory contract, which is subject to annual renewal by the Fund's Board of Trustees, the Adviser will waive the amount, limited to the amount of the advisory fee, by which the Fund's aggregate annual operating expenses, including the investment advisory fee but excluding interest, taxes, brokerage commissions, expenses of registering or qualifying the Fund and its shares under federal and state laws and regulations, expenses of withholding taxes, and extraordinary expenses exceed 0.45% of its average daily net assets.
The Financial Highlights will help you understand the Fund's financial performance for its past six fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Deloitte & Touche LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
| Period Ended 10/31/2000 |
|
Year Ended November 30, |
||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | 1999 | 1998 | 1997 | 1996 | 1995 | |||||||||||||
| Net Asset Value, Beginning of Period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | ||||||||||||
| Income from Investment Operations: | ||||||||||||||||||
| Net investment income | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | 0.04 | ||||||||||||
| Less Distributions: | ||||||||||||||||||
| Distributions from net investment income | (0.03 | ) | (0.03 | ) | (0.03 | ) | (0.03 | ) | (0.03 | ) | (0.04 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
| Net Asset Value, End of Period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
| Total Return2 | 3.46 | % | 2.95 | % | 3.21 | % | 3.31 | % | 3.18 | % | 3.57 | % | ||||||
| Ratios to Average Net Assets: | ||||||||||||||||||
| Expenses | 0.45 | %3 | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | ||||||
| Net investment income | 3.70 | %3 | 2.90 | % | 3.17 | % | 3.25 | % | 3.12 | % | 3.51 | % | ||||||
| Supplemental Data: | ||||||||||||||||||
| Net assets, end of period (000 omitted) | $559,520 | $527,071 | $517,887 | $635,519 | $747,785 | $807,369 | ||||||||||||
1 The Fund has changed its fiscal year-end from November 30 to October 31.
2 Based on NAV, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 Computed on an annualized basis.
See Notes which are an integral part of the Financial Statements
| Principal Amount |
Value | ||||||
|---|---|---|---|---|---|---|---|
| SHORT-TERM MUNICIPALS--99.4%1 | |||||||
| Alaska--2.3% | |||||||
| $ | 10,000,000 | Alaska State Housing Finance Corp., MERLOTS (Series 1999D), Weekly VRDNs (First Union National Bank, Charlotte, NC LIQ) | $ | 10,000,000 | |||
| 3,000,000 | Alaska State Housing Finance Corp., State Capital Project (Series A-2), 5.00% Bonds, 12/1/2000 | 3,002,025 | |||||
|
|
|
||||||
| TOTAL | 13,002,025 | ||||||
|
|
|
||||||
| Arizona--1.2% | |||||||
| 6,650,000 | Arizona School District, Certificates of Participation (Series 2000), 4.875% TANs (AMBAC INS), 7/31/2001 | 6,675,779 | |||||
|
|
|
||||||
| Colorado--0.4% | |||||||
| 2,130,000 | Loveland, CO, IDR (Series 1993S), 4.75% TOBs (Safeway, Inc.)/(Bankers Trust Co., New York LOC), Mandatory Tender 12/1/2000 | 2,130,000 | |||||
|
|
|
||||||
| Connecticut--0.9% | |||||||
| 5,000,000 | 2 | Connecticut State HFA, Variable Rate Certificates (Series 1998S), 4.35% TOBs (Bank of America, N.A. LIQ), Optional Tender 3/15/2001 | 5,000,000 | ||||
|
|
|
||||||
| District Of Columbia--1.3% | |||||||
| 7,020,000 | District of Columbia,Variable Rate Demand/Fixed Rate Revenue Bonds (Series 1997), Weekly VRDNs (Children's Defense Fund)/(Allfirst LOC) | 7,020,000 | |||||
|
|
|
||||||
| Florida--8.5% | |||||||
| 11,000,000 | ABN AMRO MuniTOPS Certificates Trust (Florida Non-AMT)/(Series 1998-8), Weekly VRDNs (Dade County, FL Water & Sewer System)/(FGIC INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) | 11,000,000 | |||||
| 10,325,000 | ABN AMRO MuniTOPS Certificates Trust (Florida Non-AMT)/(Series 1998-9), Weekly VRDNs (Florida State Board of Education Capital Outlay)/(FSA INS)/(ABN AMRO Bank NV, Amsterdam LIQ) | 10,325,000 | |||||
| 5,000,000 | 2 | ABN AMRO MuniTOPS Certificates Trust (Florida Non-AMT)/(Series 1999-11), 4.45% TOBs (Tampa Bay Water Utility System, FL)/(FGIC INS)/(ABN AMRO Bank NV, Amsterdam LIQ), Optional Tender 4/1/2001 | 5,000,000 | ||||
| 3,685,000 | Florida Housing Finance Corp., MERLOTs (Series 1998B), Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) | 3,685,000 | |||||
| 8,000,000 | Highlands County, FL, Health Facilities, (Series 1996A), Weekly VRDNs (Adventist Health System)/(MBIA INS)/(Bank One, NA LIQ) | 8,000,000 | |||||
| 25,000 | Highlands County, FL, Health Facilities, (Series 1997-A), Weekly VRDNs (Adventist Health System)/(SunTrust Bank, Central Florida LOC) | 25,000 | |||||
| 5,780,000 | Orange County, FL, HFA, Variable Rate Certificates (Series 1997G), Weekly VRDNs (GNMA COL)/(Bank of America, NA LIQ) | 5,780,000 | |||||
| 4,000,000 | Orange County, FL, Health Facilities Authority, (Series 2000A), Weekly VRDNs (Florida Hospital Association Health Facilities Loan Program)/(Caisse des Depots et Consignations, Paris INV)/(BNP Paribas, Bank of New York and Bank of Nova Scotia, Toronto LIQs) | 4,000,000 | |||||
|
|
|
||||||
| TOTAL | 47,815,000 | ||||||
|
|
|
||||||
| Georgia--2.7% | |||||||
| 5,000,000 | Gainesville and Hall County, GA Development Authority, (Series 1999A), Weekly VRDNs (Lanier Village Estates, Inc.)/(Regions Bank, Alabama LOC) | 5,000,000 | |||||
| 10,000,000 | Macon-Bibb County, GA Hospital Authority, (Series 2000), Daily VRDNs (Central Georgia Senior Health, Inc.)/(SunTrust Bank, Atlanta LOC) | 10,000,000 | |||||
|
|
|
||||||
| TOTAL | 15,000,000 | ||||||
|
|
|
||||||
| Illinois--5.9% | |||||||
| 10,000,000 | ABN AMRO MuniTOPS Certificates Trust (Multistate Non-AMT)/(Series 1998-14), Weekly VRDNs (Cook County, IL)/(FGIC INS)/(ABN AMRO Bank NV, Amsterdam LIQ) | 10,000,000 | |||||
| 10,000,000 | Chicago, IL Board of Education, Variable Rate Certificates (Series 1996BB), Weekly VRDNs (MBIA INS)/(Bank of America, NA LIQ) | 10,000,000 | |||||
| 4,995,000 | 2 | Chicago, IL, Variable Rate Certificates (Series 1998M), 4.45% TOBs (FGIC INS)/(Bank of America, NA LIQ), Optional Tender 3/22/2001 | 4,995,000 | ||||
| 8,295,000 | Illinois Health Facilities Authority, (Series 1997B), Weekly VRDNs (Advocate Health Care Network)/(Bank One, NA, Bank of America, NA and Northern Trust Co., Chicago, IL LIQs) | 8,295,000 | |||||
|
|
|
||||||
| TOTAL | 33,290,000 | ||||||
|
|
|
||||||
| Indiana--0.9% | |||||||
| 5,000,000 | Frankfort, IN EDR Weekly VRDNs (Wesley Manor, Inc.)/ (Allied Irish Banks PLC LOC) | 5,000,000 | |||||
|
|
|
||||||
| Kentucky--2.2% | |||||||
| 7,500,000 | Boone County, KY Weekly VRDNs (Bemis Co., Inc.) | 7,500,000 | |||||
| 4,935,000 | Kentucky Economic Development Finance Authority, (Series 1999B), Weekly VRDNs (Baptist Healthcare System)/(MBIA INS)/(Bank One, NA Michigan LIQ) | 4,935,000 | |||||
|
|
|
||||||
| TOTAL | 12,435,000 | ||||||
|
|
|
||||||
| Maryland--6.5% | |||||||
| 800,000 | Baltimore County, MD, (Series 1992), Weekly VRDNs (Sheppard & Enoch Pratt Hospital Facility)/(Bank of America, NA LOC) | 800,000 | |||||
| 1,500,000 | Frederick County, MD, (Series 1997E), Weekly VRDNs (Buckinghams Choice, Inc.)/(Lasalle Bank, NA LOC) | 1,500,000 | |||||
| 2,000,000 | Maryland Health & Higher Educational Facilities Authority, Facility Authority Revenue Bonds (Series 1998), Weekly VRDNs (Woodbourne Foundation, Inc.)/(Allfirst LOC) | 2,000,000 | |||||
| 7,350,000 | Maryland Health & Higher Educational Facilities Authority, Variable Rate Demand/Fixed Rate Revenue Bonds Weekly VRDNs (Capitol College)/(Allfirst LOC) | 7,350,000 | |||||
| 11,000,000 | Maryland Health & Higher Educational Facilities Authority, (Series 1999), Weekly VRDNs (Landon School)/(Crestar Bank LOC) | 11,000,000 | |||||
| 2,250,000 | Maryland Health & Higher Educational Facilities Authority, (Series A), 7.00% Bonds (University of Maryland Medical System)/(United States Treasury PRF), 7/1/2001 (@102) | 2,327,445 | |||||
| 8,200,000 | Montgomery County, MD, EDR Weekly VRDNs (U.S. Pharmacopeial Convention Facility)/(Chase Manhattan Bank NA, New York LOC) | 8,200,000 | |||||
| 3,430,000 | Prince Georges County, MD, (Series 1997), Weekly VRDNs (Mona Branch Avenue LP)/(Allfirst LOC) | 3,430,000 | |||||
|
|
|
||||||
| TOTAL | 36,607,445 | ||||||
|
|
|
||||||
| Michigan--6.7% | |||||||
| 2,400,000 | ABN AMRO MuniTOPS Certificates Trust (Michigan Non-AMT)/(Series 1998-11), Weekly VRDNs (DeWitt, MI Public Schools)/(FSA INS)/(ABN AMRO Bank NV, Amsterdam LIQ) | 2,400,000 | |||||
| 9,200,000 | ABN AMRO MuniTOPS Certificates Trust (Michigan Non-AMT)/(Series 1998-13), Weekly VRDNs (Michigan State Trunk Line)/(MBIA INS)/(ABN AMRO Bank NV, Amsterdam LIQ) | 9,200,000 | |||||
| 5,000,000 | 2 | Detroit, MI City School District, MERLOTS (Series 2000 A8), 4.40% TOBs (FGIC INS)/(First Union National Bank, Charlotte, NC LIQ), Optional Tender 10/1/2001 | 5,000,000 | ||||
| 2,000,000 | Detroit, MI Sewage Disposal System, MERLOTS (Series 2000-I), Weekly VRDNs (FGIC INS)/(First Union National Bank, Charlotte, NC LIQ) | 2,000,000 | |||||
| 6,000,000 | Detroit, MI Water Supply System, MERLOTS (Series 2000 D), Weekly VRDNs (FGIC INS)/(First Union National Bank, Charlotte, NC LIQ) | 6,000,000 | |||||
| 1,000,000 | Lake Orion, MI School District, 5.125% RANs, 8/22/2001 | 1,005,601 | |||||
| 5,285,000 | Oakland County, MI EDC, (Series 1998), Weekly VRDNs (Lourdes Assisted Living, Inc.)/(Allied Irish Banks PLC LOC) | 5,285,000 | |||||
| 2,695,000 | Ottawa County, MI Economic Development Corp., (Series 1995B), Weekly VRDNs (Sunset Manor, Inc.)/(Old Kent Bank & Trust Co., Grand Rapids LOC) | 2,695,000 | |||||
| 3,995,000 | Wayne Westland Community Schools, MI, Floater Certificates (Series 1998-67), Weekly VRDNs (FGIC INS)/(Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ) | 3,995,000 | |||||
|
|
|
||||||
| TOTAL | 37,580,601 | ||||||
|
|
|
||||||
| Minnesota--5.2% | |||||||
| 11,000,000 | ABN AMRO MuniTOPS Certificates Trust (Minnesota Non-AMT)/(Series 2000-8), Weekly VRDNs (Minneapolis/St. Paul, MN Airport Commission)/(FGIC INS)/(ABN AMRO Bank NV, Amsterdam LIQ) | 11,000,000 | |||||
| 5,000,000 | Becker, MN, (Series 2000-A), Weekly VRDNs (Northern States Power Co.) | 5,000,000 | |||||
| 3,500,000 | Minneapolis, MN, (Series 1993), Weekly VRDNs (Market Square Real Estate, Inc.)/(Wells Fargo Bank Minnesota, NA LOC) | 3,500,000 | |||||
| 4,810,000 | 2 | Minnesota State, (PT-400), 4.50% TOBs (Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 6/14/2001 | 4,810,000 | ||||
| 4,600,000 | St. Paul, MN Port Authority, (Series 1991), Weekly VRDNs (West Gate Office)/(U.S. Bank, NA, Minneapolis LOC) | 4,600,000 | |||||
|
|
|
||||||
| TOTAL | 28,910,000 | ||||||
|
|
|
||||||
| Missouri--2.0% | |||||||
| 3,035,000 | Howell County, MO IDA, (Series 1992), 4.40% TOBs (Safeway, Inc.)/(Deutsche Bank AG LOC), Mandatory Tender 2/1/2001 | 3,035,000 | |||||
| 3,950,000 | Missouri State HEFA, (Series I), 4.75% RANs (William Jewell College), 4/20/2001 | 3,956,862 | |||||
| 4,000,000 | St. Louis, (Series 2000), 5.25% TRANs, 6/28/2001 | 4,016,783 | |||||
|
|
|
||||||
| TOTAL | 11,008,645 | ||||||
|
|
|
||||||
| Multi State--5.4% | |||||||
| 5,162,121 | ABN AMRO Chicago Corp. (Series 1997-1), LeaseTOPS Trust Weekly VRDNs (Lasalle Bank, NA LIQ)/(Lasalle Bank, NA LOC) | 5,162,121 | |||||
| 11,312,000 | Clipper Tax-Exempt Certificates Trust (Non-AMT Multistate)/(Series A), Weekly VRDNs (State Street Bank and Trust Co. LIQ) | 11,312,000 | |||||
| 13,782,040 | Equity Trust I, (Series 1996), Weekly VRDNs (Bayerische Hypotheken-und Vereinsbank AG LOC) | 13,782,040 | |||||
|
|
|
||||||
| TOTAL | 30,256,161 | ||||||
|
|
|
||||||
| New Jersey--1.8% | |||||||
| 10,000,000 | New Jersey State, (Series Fiscal 2001A), 4.25% CP, Mandatory Tender 11/6/2000 | 10,000,000 | |||||
|
|
|
||||||
| New York--4.2% | |||||||
| 5,000,000 | Nassau County, NY, (Series A), 6.00% RANs (Bank of Nova Scotia, Toronto and First Union National Bank, Charlotte, NC LOCs), 3/20/2001 | 5,028,090 | |||||
| 8,500,000 | New York City, NY Transitional Finance Authority, BANs (Series 2000 FR/RI-A16), Daily VRDNs (Bayerische Hypotheken-und Vereinsbank AG LIQ) | 8,500,000 | |||||
| 10,000,000 | 2 | Triborough Bridge & Tunnel Authority, NY, Trust Receipt (Series 2000 FR/RI-N16), 4.45% TOBs (Bank of New York LIQ) 1/1/2001 | 10,000,000 | ||||
|
|
|
||||||
| TOTAL | 23,528,090 | ||||||
|
|
|
||||||
| North Carolina--4.7% | |||||||
| 20,000,000 | Martin County, NC IFA, (Series 1993), Weekly VRDNs (Weyerhaeuser Co.) | 20,000,000 | |||||
| 6,500,000 | North Carolina Medical Care Commission, Revenue Bonds (Series 1992B), Weekly VRDNs (North Carolina Baptist)/(Wachovia Bank of NC, NA LIQ) | 6,500,000 | |||||
|
|
|
||||||
| TOTAL | 26,500,000 | ||||||
|
|
|
||||||
| Ohio--3.4% | |||||||
| 13,300,000 | Clark County, OH, (Series 1999), Weekly VRDNs (Ohio Masonic Home)/(AMBAC INS)/(Harris Trust & Savings Bank, Chicago LIQ) | 13,300,000 | |||||
| 1,450,000 | Cleveland State University, OH, (Series 1999), 3.85% Bans, 1/16/2001 | 1,443,417 | |||||
| 4,370,000 | Cuyahoga County, OH Health Care Facilities, (Series 1999), Weekly VRDNs (Hospice of the Western Reserve)/(Fifth Third Bank, Cincinnati LOC) | 4,370,000 | |||||
|
|
|
||||||
| TOTAL | 19,113,417 | ||||||
|
|
|
||||||
| Oklahoma--1.2% | |||||||
| 1,000,000 | Claremore, OK Public Works Authority, 5.50% Bonds (FSA INS), 6/1/2001 | 1,003,348 | |||||
| 2,440,000 | Muskogee, OK Industrial Trust, (Series 1985), Weekly VRDNs (Muskogee Mall LP)/(Bank of America, NA LOC) | 2,440,000 | |||||
| 3,110,000 | Muskogee, OK Industrial Trust, (Series 1985), Weekly VRDNs (Warmack Muskogee LP)/(Bank of America, NA LOC) | 3,110,000 | |||||
|
|
|
||||||
| TOTAL | 6,553,348 | ||||||
|
|
|
||||||
| Pennsylvania--6.6% | |||||||
| 8,300,000 | Dauphin County, PA General Authority, (Education and Health Loan Program)/(Series 1997), Weekly VRDNs (AMBAC INS)/(Chase Manhattan Bank NA, New York LIQ) | 8,300,000 | |||||
| 3,000,000 | Doylestown Hospital Authority, PA, (Series 1998 B), Weekly VRDNs (AMBAC INS)/(PNC Bank, NA LIQ) |
|
3,000,000 | ||||
| 5,000,000 | Doylestown Hospital Authority, PA, Hospital Revenue Bonds (Series 1998C), Weekly VRDNs (Doylestown Hospital, PA)/(AMBAC INS)/(PNC Bank, NA LIQ) |
|
5,000,000 | ||||
| 3,500,000 | East Hempfield Township, PA IDA, (Series 1997), Weekly VRDNs (Mennonite Home)/(Allfirst LOC) |
|
3,500,000 | ||||
| 9,000,000 | Erie County, PA Hospital Authority Weekly VRDNs (St. Vincent Health System)/(Mellon Bank NA, Pittsburgh LOC) |
|
9,000,000 | ||||
| 3,000,000 | Lebanon County, PA Health Facilities Authority, (Series 1999), Weekly VRDNs (United Church of Christ Homes, Inc.)/(Allfirst LOC) |
|
3,000,000 | ||||
| 5,000,000 | Mercersburg Borough, PA General Purpose Authority, (Series 2000B), Weekly VRDNs (Regents of the Mercersburg College)/(First Union National Bank, Charlotte, NC LOC) | 5,000,000 | |||||
|
|
|
||||||
| TOTAL | 36,800,000 | ||||||
|
|
|
||||||
| South Dakota--0.5% | |||||||
| 2,520,000 | South Dakota Housing Development Authority, (Series F), 4.50% Bans, 6/28/2001 | 2,520,000 | |||||
|
|
|
||||||
| Tennessee--2.5% | |||||||
| 1,500,000 | Metropolitan Government Nashville & Davidson County, TN HEFA, (Series 1997), Weekly VRDNs (Belmont University)/(SunTrust Bank, Nashville LOC) |
|
1,500,000 | ||||
| 2,050,000 | Sevier County, TN Public Building Authority, (Series IV-2), Daily VRDNs (Bradley County, TN)/(FSA INS)/(Morgan Guaranty Trust Co., New York LIQ) |
|
2,050,000 | ||||
| 3,000,000 | Shelby County, TN Health Education & Housing Facilities Board, (Series 2000), 4.45% CP (Baptist Memorial Hospital)/(Bank of America, NA LOC), Mandatory Tender 3/27/2001 |
|
3,000,000 | ||||
| 5,000,000 | Shelby County, TN Health Education & Housing Facilities Board, (Series 2000), 4.65% CP (Baptist Memorial Hospital)/(Bank of America, NA LOC), Mandatory Tender 11/20/2000 |
|
5,000,000 | ||||
| 2,500,000 | Shelby County, TN Health Education & Housing Facilities Board, (Series 2000), 4.65% CP (Baptist Memorial Hospital)/(Bank of America, NA LOC), Mandatory Tender 11/21/2000 | 2,500,000 | |||||
|
|
|
||||||
| TOTAL | 14,050,000 | ||||||
|
|
|
||||||
| Texas--13.1% | |||||||
| 3,528,000 | ABN AMRO MuniTOPS Certificates Trust (Multi-State Non-AMT)/(Series 1998-24), Weekly VRDNs (Barbers Hill, TX ISD)/(Texas Permanent School Fund Guarantee Program GTD)/(ABN AMRO Bank NV, Amsterdam LIQ) |
|
3,528,000 | ||||
| 1,735,000 | Bank One, TX Pooled Tax Exempt Trust, Certificates of Participation (Series 1996), Weekly VRDNs (Bank One, Texas NA LOC) | 1,735,000 | |||||
| 875,000 | College Station, TX, 6.50% Bonds (FGIC INS), 2/15/2001 | 880,000 | |||||
| 5,000,000 | 2 | Conroe, TX ISD, (PT-1168), 4.50% TOBs (Texas Permanent School Fund Guarantee Program GTD)/(Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 7/26/2001 |
|
5,000,000 | |||
| 7,785,000 | 2 | Dallas, TX, (PT-369), 4.50% TOBs (Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 6/14/2001 | 7,785,000 | ||||
| 2,575,000 | Ector County, TX Hospital District, 5.25% Bonds (MBIA INS), 4/15/2001 | 2,584,204 | |||||
| 10,750,000 | Harris County, TX HFDC, (Series 2000), Weekly VRDNs (Brazos Presbyterian Homes, Inc.)/(Allied Irish Banks PLC LOC) |
|
10,750,000 | ||||
| 5,205,000 | Houston, TX ISD, Morgan Stanley Floater Certificates (Series 1998-133), Weekly VRDNs (Texas Permanent School Fund Guarantee Program GTD)/(Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ) |
|
5,205,000 | ||||
| 3,100,000 | Houston, TX Water & Sewer System, FR/RI (Series 1999A-29), Weekly VRDNs (Bank of New York, New York LIQ)/(United States Treasury PRF) |
|
3,100,000 | ||||
| 3,985,000 | 2 | Lower Colorado River Authority, TX, MERLOTS (Series 2000 RRR), 4.40% TOBs (FSA INS)/(First Union National Bank, Charlotte, NC LIQ), Optional Tender 8/1/2001 |
|
3,985,000 | |||
| 3,500,000 | 2 | Lower Colorado River Authority, TX, MERLOTS (Series 2000 ZZZ), 4.40% TOBs (FSA INS)/(First Union National Bank, Charlotte, NC LIQ), Optional Tender 9/4/2001 |
|
3,500,000 | |||
| 8,560,000 | 2 | McKinney, TX ISD, (PT-1180), 4.45% TOBs (Texas Permanent School Fund Guarantee Program GTD)/(Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 8/9/2001 |
|
8,560,000 | |||
| 4,945,000 | 2 | Round Rock ISD, TX, (PT-1138), 4.20% TOBs (Texas Permanent School Fund Guarantee Program GTD)/(Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 11/9/2000 |
|
4,945,000 | |||
| 4,935,000 | 2 | San Antonio ISD, TX, (PT-1184), 4.40% TOBs (Texas Permanent School Fund Guarantee Program GTD)/(Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 9/13/2001 |
|
4,935,000 | |||
| 7,000,000 | San Antonio, TX Electric & Gas, Municipal Securities Trust Receipts (Series 1997 SG 101), Weekly VRDNs (Societe Generale, Paris LIQ) | 7,000,000 | |||||
|
|
|
||||||
| TOTAL | 73,492,204 | ||||||
|
|
|
||||||
| Utah--0.2% | |||||||
| 1,175,000 | Castle Dale, UT IDR, (Series 1992), 4.40% TOBs (Safeway, Inc.)/(Deutsche Bank AG LOC), Mandatory Tender 2/1/2001 | 1,175,000 | |||||
|
|
|
||||||
| Virginia--4.0% | |||||||
| 2,000,000 | Alexandria, VA IDA, (Series 1999), Weekly VRDNs (Church Schools in the Diocese of Virginia)/(Crestar Bank of Virginia, Richmond LOC) |
|
2,000,000 | ||||
| 1,000,000 | Fairfax County, VA IDA, 1998 Trust Receipts (FR/RI-A35), Weekly VRDNs (Fairfax Hospital System)/(Bayerische Hypotheken-und Vereinsbank AG LIQ)/(United States Treasury PRF) |
|
1,000,000 | ||||
| 6,510,000 | Newport News, VA Redevelopment & Housing Authority, (PA-152), Weekly VRDNs (Indian Lakes Apartments)/(Merrill Lynch Capital Services, Inc. LIQ)/(Merrill Lynch Capital Services, Inc. LOC) | 6,510,000 | |||||
| 13,065,000 | Virginia Resources Authority, Water and Sewer (Series 1997), Weekly VRDNs (Henrico County, VA)/(Crestar Bank LIQ) | 13,065,000 | |||||
|
|
|
||||||
| TOTAL | 22,575,000 | ||||||
|
|
|
||||||
| West Virginia--1.6% | |||||||
| 6,230,000 | Cabell County Commission, WV, (Series 1995), Weekly VRDNs (Foster Foundation)/(Huntington National Bank, Columbus, OH LOC) | 6,230,000 | |||||
| 2,765,000 | Oak Hill, WV, (Series 1991A), Weekly VRDNs (Fayette Plaza)/(PNC Bank, NA LOC) | 2,765,000 | |||||
|
|
|
||||||
| TOTAL | 8,995,000 | ||||||
|
|
|
||||||
| Wisconsin--3.5% | |||||||
| 5,735,000 | 2 | Durand, WI, CDC (Series 2000E), 4.40% TOBs (Chippewa Valley Hospital and Nursing Home)/(United States Treasury COL)/(Caisse Des Depots et Consignations, Paris LIQ), Optional Tender 2/8/2001 |
|
5,735,000 | |||
| 4,000,000 | Fond Du Lac, WI School District, 4.65% Bans, 12/1/2000 | 4,000,939 | |||||
| 7,000,000 | University of Wisconsin Hospital and Clinics Authority, MERLOTS (Series 2000RR), Weekly VRDNs (FSA INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
7,000,000 | ||||
| 2,600,000 | Wisconsin HEFA, (Series 2000), Weekly VRDNs (Grace Lutheran Foundation, Inc.)/(Firstar Bank, NA LOC) | 2,600,000 | |||||
|
|
|
||||||
| TOTAL | 19,335,939 | ||||||
|
|
|
||||||
| TOTAL INVESTMENTS (AT AMORTIZED COST)3 | $ | 556,368,654 | |||||
|
|
|
||||||
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+ , SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 and F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Percentage Based on Total Market Value (Unaudited)
| First Tier | Second Tier | |
| 100.00% | 0.00% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $79,250,000 which represents 14.2% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($559,520,025) at October 31, 2000.
The following acronyms are used throughout this portfolio:
| AMBAC | --American Municipal Bond Assurance Corporation |
| AMT | --Alternative Minimum Tax |
| BANs | --Bond Anticipation Notes |
| COL | --Collateralized |
| CP | --Commercial Paper |
| EDC | --Economic Development Commission |
| EDR | --Economic Development Revenue |
| FGIC | --Financial Guaranty Insurance Company |
| FSA | --Financial Security Assurance |
| GNMA | --Government National Mortgage Association |
| GTD | --Guaranteed |
| HEFA | --Health and Education Facilities Authority |
| HFA | --Housing Finance Authority |
| HFDC | --Health Facility Development Corporation |
| IDA | --Industrial Development Authority |
| IDR | --Industrial Development Revenue |
| IFA | --Industrial Finance Authority |
| INS | --Insured |
| INV | --Investment Agreement |
| ISD | --Independent School District |
| LIQ | --Liquidity Agreement |
| LOC | --Letter of Credit |
| MBIA | --Municipal Bond Investors Assurance |
| MERLOTS | --Municipal Exempt Receipts--Liquidity Optional Tender Series |
| PRF | --Prerefunded |
| RANs | --Revenue Anticipation Notes |
| TANs | --Tax Anticipation Notes |
| TOBs | --Tender Option Bonds |
| TOPs | --Tender Option Payments |
| TRANs | --Tax and Revenue Anticipation Notes |
| VRDNs | --Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
| Assets: | |||||||
| Total investments in securities, at amortized cost and value | $ | 556,368,654 | |||||
| Cash | 591,748 | ||||||
| Income receivable | 4,354,953 | ||||||
| Receivable for shares sold | 1,750 | ||||||
|
|
|
|
|||||
| TOTAL ASSETS | 561,317,105 | ||||||
|
|
|
|
|||||
| Liabilities: | |||||||
| Payable for shares redeemed | $ | 3,401 | |||||
| Income distribution payable | 1,761,113 | ||||||
| Accrued expenses | 32,566 | ||||||
|
|
|
||||||
| TOTAL LIABILITIES | 1,797,080 | ||||||
|
|
|
|
|||||
| Net assets for 559,509,787 shares outstanding | $ | 559,520,025 | |||||
|
|
|
|
|||||
| Net Assets Consist of: | |||||||
| Paid in capital | $ | 559,501,926 | |||||
| Accumulated net realized loss on investments | (47,234 | ) | |||||
| Undistributed net investment income | 65,333 | ||||||
|
|
|
|
|||||
| TOTAL NET ASSETS | $ | 559,520,025 | |||||
|
|
|
|
|||||
| Net Asset Value, Offering Price and Redemption Proceeds Per Share: | |||||||
| $559,520,025 ÷ 559,509,787 shares outstanding | $1.00 | ||||||
|
|
|
|
See Notes which are an integral part of the Financial Statements
| Investment Income: | |||||||||||
| Interest | $ | 21,418,811 | |||||||||
|
|
|
||||||||||
| Expenses: | |||||||||||
| Investment adviser fee | $ | 2,061,910 | |||||||||
| Administrative personnel and services fee | 388,162 | ||||||||||
| Custodian fees | 24,622 | ||||||||||
| Transfer and dividend disbursing agent fees and expenses | 24,336 | ||||||||||
| Directors'/Trustees' fees | 5,280 | ||||||||||
| Auditing fees | 11,998 | ||||||||||
| Legal fees | 12,195 | ||||||||||
| Portfolio accounting fees | 88,412 | ||||||||||
| Shareholder services fee | 1,288,694 | ||||||||||
| Share registration costs | 13,520 | ||||||||||
| Printing and postage | 17,549 | ||||||||||
| Insurance premiums | 28,146 | ||||||||||
| Miscellaneous | 13,273 | ||||||||||
|
|
|
|
|||||||||
| TOTAL EXPENSES | 3,978,097 | ||||||||||
|
|
|
|
|||||||||
| Waivers: | |||||||||||
| Waiver of investment adviser fee | $ | (613,973 | ) | ||||||||
| Waiver of shareholder services fee | (1,030,955 | ) | |||||||||
|
|
|
|
|||||||||
| TOTAL WAIVERS | (1,644,928 | ) | |||||||||
|
|
|
|
|||||||||
| Net expenses | 2,333,169 | ||||||||||
|
|
|
||||||||||
| Net investment income | 19,085,642 | ||||||||||
| Net realized gain on investments | 1,100 | ||||||||||
|
|
|
||||||||||
| Change in net assets resulting from operations | $ | 19,086,742 | |||||||||
|
|
|
1 The Fund has changed its fiscal year-end from November 30 to October 31.
See Notes which are an integral part of the Financial Statements
| Investment Income: | |||||||||||
| Interest | $ | 18,550,666 | |||||||||
|
|
|
||||||||||
| Expenses: | |||||||||||
| Investment adviser fee | $ | 2,212,024 | |||||||||
| Administrative personnel and services fee | 416,967 | ||||||||||
| Custodian fees | 19,965 | ||||||||||
| Transfer and dividend disbursing agent fees and expenses | 55,848 | ||||||||||
| Directors'/Trustees' fees | 14,987 | ||||||||||
| Auditing fees | 14,985 | ||||||||||
| Legal fees | 9,493 | ||||||||||
| Portfolio accounting fees | 94,119 | ||||||||||
| Shareholder services fee | 1,382,515 | ||||||||||
| Share registration costs | 8,412 | ||||||||||
| Printing and postage | 18,745 | ||||||||||
| Insurance premiums | 45,560 | ||||||||||
| Taxes | 75 | ||||||||||
| Miscellaneous | 8,329 | ||||||||||
|
|
|
||||||||||
| TOTAL EXPENSES | 4,302,024 | ||||||||||
|
|
|
||||||||||
| Waivers: | |||||||||||
| Waiver of investment adviser fee | $ | (698,998 | ) | ||||||||
| Waiver of shareholder services fee | (1,106,012 | ) | |||||||||
|
|
|
|
|||||||||
| TOTAL WAIVERS | (1,805,010 | ) | |||||||||
|
|
|
||||||||||
| Net expenses | 2,497,014 | ||||||||||
|
|
|
||||||||||
| Net investment income | 16,053,652 | ||||||||||
| Net realized gain on investments | 28,087 | ||||||||||
|
|
|
||||||||||
| Change in net assets resulting from operations | $ | 16,081,739 | |||||||||
|
|
|
See Notes which are an integral part of the Financial Statements
| Period Ended 10/31/2000 |
1 | Year Ended 11/30/1999 |
Year Ended 11/30/1998 |
|||||||||
| Increase (Decrease) in Net Assets: | ||||||||||||
| Operations: | ||||||||||||
| Net investment income | $ | 19,085,642 | $ | 16,053,652 | $ | 17,911,917 | ||||||
| Net realized gain (loss) on investments ($1,100, $28,087, and ($53,876) respectively, as computed for federal tax purposes) | 1,100 | 28,087 | 11,456 | |||||||||
|
|
|
|
|
|
|
|
|
|
||||
| CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | 19,086,742 | 16,081,739 | 17,923,373 | |||||||||
|
|
|
|
|
|
|
|
|
|
||||
| Distributions to Shareholders: | ||||||||||||
| Distributions from net investment income | (19,085,642 | ) | (16,053,652 | ) | (17,911,917 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
||||
| Share Transactions: | ||||||||||||
| Proceeds from sale of shares | 1,591,932,172 | 1,674,871,084 | 1,890,281,389 | |||||||||
| Net asset value of shares issued to shareholders in payment of distributions declared | 1,512,230 | 1,164,731 | 1,421,172 | |||||||||
| Cost of shares redeemed | (1,560,996,089 | ) | (1,666,879,961 | ) | (2,009,346,623 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
||||
| CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | 32,448,313 | 9,155,854 | (117,644,062 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
||||
| Change in net assets | 32,449,413 | 9,183,941 | (117,632,606 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
||||
| Net Assets: | ||||||||||||
| Beginning of period | 527,070,612 | 517,886,671 | 635,519,277 | |||||||||
|
|
|
|
|
|
|
|
|
|
||||
| End of period | $ | 559,520,025 | $ | 527,070,612 | $ | 517,886,671 | ||||||
|
|
|
|
|
|
|
|
|
|
||||
1 The Fund has changed its fiscal year-end from November 30 to October 31.
See Notes which are an integral part of the Financial Statements
Money Market Obligations Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of Federated Tax-free Trust (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholders interest is limited to the portfolio in which the shares are held. The investment objective of the Fund is to provide dividend income exempt from federal regular income tax while seeking relative stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
At October 31, 2000, the Fund, for federal tax purposes, had a capital loss carryforward of $47,234, which will reduce the Fund's taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire as follows:
| Expiration Year | Expiration Amount | |
| 2004 | $2,012 | |
| 2005 | $14,032 | |
| 2006 | $31,190 |
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees (The "Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The Fund has changed its fiscal year-end from November 30 to October 31.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). At October 31, 2000, capital paid-in aggregated $559,501,926.
Transactions in Shares were as follows:
| Period Ended 10/31/2000 |
1 | Year Ended 11/30/1999 |
Year Ended 11/30/1998 |
||||||
| Shares sold | 1,591,932,172 | 1,674,871,084 | 1,890,281,389 | ||||||
| Shares issued to shareholders in payment of distributions declared | 1,512,230 | 1,164,731 | 1,421,172 | ||||||
| Shares redeemed | (1,560,996,089 | ) | (1,666,879,961 | ) | (2,009,346,623 | ) | |||
|
|
|
|
|
|
|
||||
| NET CHANGE RESULTING FROM SHARE TRANSACTIONS | 32,448,313 | 9,155,854 | (117,644,062 | ) | |||||
|
|
|
|
|
|
|
1 The Fund has changed its fiscal year-end from November 30 to October 31.
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser will waive, to the extent of its adviser fee, the amount, if any, by which the Fund's aggregate annual operating expenses exceed 0.45% of average daily net assets of the Fund.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act, and amounted to $896,683,000 and $767,763,000, respectively.
Certain of the Officers and Directors of the Trust are Officers and Directors or Trustees of the above companies.
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Federated Tax-Free Trust (the "Fund") as of October 31, 2000, and the related statement of operations for the period then ended and the year ended November 30, 1999, the statement of changes in net assets for the period ended October 31, 2000 and the years ended November 30, 1999 and 1998, and the financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to provide reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of the securities owned at October 31, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of Federated Tax-Free Trust as of October 31, 2000, the results of its operations, the changes in its net assets and its financial highlights for the respective stated periods in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Boston, Massachusetts
December 8, 2000
A Statement of Additional Information (SAI) dated December 31, 2000, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as they become available. To obtain the SAI, the Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
[Graphic Representation Omitted--See Appendix]
Federated Tax-Free Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated Securities Corp., Distributor
Investment Company Act File No. 811-2891
Cusip 60934N666
8010414A (12/00)
Federated is a registered mark of Federated Investors, Inc.
2000 (c)Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and the personal income tax imposed by the State of Georgia consistent with stability of principal and liquidity by investing in a portfolio of short-term, high-quality Georgia tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 8
How to Redeem Shares 9
Account and Share Information 12
Who Manages the Fund? 13
Financial Information 13
Report of Ernst & Young LLP, Independent Auditors 26
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is current income exempt from federal regular income tax and the income tax imposed by the State of Georgia 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.
The Fund invests in short-term, high-quality Georgia tax exempt securities. The Fund will invest so that at least 80% of its annual interest income is exempt from federal regular income tax and Georgia state income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single issuer, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's total returns on a calendar year-end basis.
The Fund's shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.87%.
Within the period shown in the Chart, the Fund's Shares highest quarterly return was 0.89% (quarter ended June 30, 1997). Its lowest quarterly return was 0.66% (quarter ended March 31, 1999).
The following table represents the Fund's Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
One Year |
|
3.00% |
|
Start of Performance1 |
|
3.29% |
1 The Fund's Shares start of performance date was August 22, 1995.
The Fund's 7-Day Net Yield as of December 31, 1999 was 4.21%. You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.50% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee3 |
|
0.25% |
|
Other Expenses |
|
0.15% |
|
Total Annual Fund Operating Expenses |
|
0.90% |
|
1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts during the fiscal year ended October 31, 2000. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waivers of Fund Expenses |
|
0.41% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.49% |
|
2 The adviser voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.15% for the fiscal year ended October 31, 2000. |
||
|
3 The shareholder services provider voluntarily waived a portion of the shareholder services fee. The shareholder services provider can terminate this voluntary waiver at any time. The shareholder services fee paid by the Fund (after the voluntary waiver) was 0.19% for the fiscal year ended October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's Shares operating expenses are before waivers as shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
|
$ |
92 |
|
|
|||
|
3 Years |
|
$ |
287 |
|
|
|||
|
5 Years |
|
$ |
498 |
|
|
|||
|
10 Years |
|
$ |
1,108 |
|
|
|||
The Fund invests in a portfolio of high-quality Georgia tax exempt securities maturing in 397 days or less. The Fund will invest so that at least 80% of its annual interest income is exempt from federal regular income tax and Georgia state income tax. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal and Georgia income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Georgia issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Georgia, the Fund may be subject to additional risks compared to funds that invest in multiple states. Georgia's stable and broad-based manufacturing (textiles, food products, paper products, electronic equipment and aircraft), trade, service and transportation oriented economy has produced steady economic growth. The diversity of the state's economy has also produced strong employment growth fueled by the fast-growing service sector, which more than offsets certain manufacturing sector losses. These trends, supported by strong migration to Georgia, are expected to continue.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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.
When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. 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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Georgia taxpayers because it invests in Georgia municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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).
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Georgia taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 26.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.04 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.04 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.82 |
% |
|
2.94 |
% |
|
3.33 |
% |
|
3.38 |
% |
|
3.37 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.49 |
% |
|
0.49 |
% |
|
0.49 |
% |
|
0.49 |
% |
|
0.46 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.72 |
% |
|
2.90 |
% |
|
3.28 |
% |
|
3.33 |
% |
|
3.31 |
% |
|
|
|||||||||||||||
|
Expense waiver/reimbursement3 |
|
0.41 |
% |
|
0.42 |
% |
|
0.44 |
% |
|
0.43 |
% |
|
0.52 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$218,297 |
|
$267,132 |
|
$168,098 |
|
$121,858 |
|
$122,940 |
|
||||
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--99.3%1 |
|
|
|
|
|
|
|
Georgia--99.3% |
|
|
|
|
$ |
5,000,000 |
|
Albany, GA, (Series 2000), 4.75% TANs, 12/29/2000 |
|
$ |
5,000,000 |
|
|
5,300,000 |
|
Athens-Clarke County, GA, IDA, (Series 1988), 4.30% CP (Rhone Merieux, Inc. Project)/(Societe Generale, Paris LOC), Mandatory Tender 11/7/2000 |
|
|
5,300,000 |
|
|
1,300,000 |
|
Athens-Clarke County, GA, IDA, (Series 1997), Weekly VRDNs (Armagh Capital Resource LLC)/(Wachovia Bank of NC, N.A. LOC) |
|
|
1,300,000 |
|
|
2,700,000 |
|
Atlanta, GA, Airport Facilities Refunding Revenue Board, 5.50% Bonds (AMBAC INS), 1/1/2001 |
|
|
2,706,517 |
|
|
4,495,000 |
|
Bartow County School District, GA, (Series 2000), 4.50% TANs, 12/29/2000 |
|
|
4,495,000 |
|
|
2,000,000 |
|
Bartow County, GA, IDA, (Series 2000), Weekly VRDNs (Eagle Solutions LLC)/(AmSouth Bank N.A., Birmingham LOC) |
|
|
2,000,000 |
|
|
3,650,000 |
|
Brunswick, GA, Housing Authority, (Series S93), Weekly VRDNs (Island Square Apartments)/(Columbus Bank and Trust Co., GA LOC) |
|
|
3,650,000 |
|
|
2,000,000 |
|
Carrollton, GA, Redevelopment Authority, (Series 2000), 5.00% Bonds, 8/1/2001 |
|
|
2,009,774 |
|
|
4,990,000 |
|
Cartersville, GA, 5.25% TANs, 12/29/2000 |
|
|
4,993,473 |
|
|
805,000 |
|
Cherokee County, GA, Development Authority, IDRB Weekly VRDNs (Morrison Products, GA)/(KeyBank, N.A. LOC) |
|
|
805,000 |
|
|
4,000,000 |
|
Cherokee County, GA, School System, (Series 2000), 4.60% TANs, 12/29/2000 |
|
|
4,000,000 |
|
|
2,400,000 |
|
Clayton County, GA, Development Authority, (Series 1994), Weekly VRDNs (Lear Seating Corp.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
2,400,000 |
|
|
550,000 |
|
Clayton County, GA, Housing Authority, Refunding Revenue Bonds (Series 1992), Weekly VRDNs (Oxford Townhomes)/(AmSouth Bank N.A., Birmingham LOC) |
|
|
550,000 |
|
|
645,000 |
|
Cobb County, GA, IDA Weekly VRDNs (Atlanta RDC Co.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
645,000 |
|
|
670,000 |
|
Columbia County, GA, Development Authority, (Series 1991), Weekly VRDNs (Augusta Sportswear, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
670,000 |
|
|
3,000,000 |
|
Coweta County, GA, IDA, (Series 1995), Weekly VRDNs (Lanelco LLC Project)/(Bank One, Michigan LOC) |
|
|
3,000,000 |
|
|
6,000,000 |
|
Crisp County - Cordele, GA, IDA, (Series 2000), Weekly VRDNs (Georgia Ductile Foundries LLC)/(Columbus Bank and Trust Co., GA LOC) |
|
|
6,000,000 |
|
|
7,500,000 |
|
Dade County, GA, IDA, (Series 1997), Weekly VRDNs (Bull Moose Tube Co.)/ (Firstar Bank, N.A. LOC) |
|
|
7,500,000 |
|
|
2,000,000 |
|
Dawson County, GA, Development Authority, (Series 1999), Weekly VRDNs (Impulse Investments LLC)/(Wachovia Bank of NC, N.A. LOC) |
|
|
2,000,000 |
|
|
1,250,000 |
|
De Kalb County, GA, Development Authority Weekly VRDNs (Rock-Tenn Co., Inc. Project)/(SunTrust Bank, Atlanta LOC) |
|
|
1,250,000 |
|
|
1,050,000 |
|
De Kalb County, GA, Development Authority, (Series 1992), Weekly VRDNs (House of Cheatham, Inc. Project)/(Bank of America, N.A. LOC) |
|
|
1,050,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Georgia--continued |
|
|
|
|
$ |
600,000 |
|
De Kalb County, GA, Development Authority, (Series 1993), Weekly VRDNs (Pet, Inc.)/(PNC Bank, N.A. LOC) |
|
$ |
600,000 |
|
|
2,300,000 |
|
De Kalb County, GA, Development Authority, (Series 1995), Weekly VRDNs (Rock-Tenn Converting Co.)/(SunTrust Bank, Atlanta LOC) |
|
|
2,300,000 |
|
|
1,140,000 |
|
De Kalb County, GA, Development Authority, (Series 1996), Weekly VRDNs (DeKalb Steel, Inc.)/(SouthTrust Bank of Georgia, Atlanta LOC) |
|
|
1,140,000 |
|
|
3,565,000 |
|
Dekalb County, GA, SFM, Roaring Fork (Series 2000-9), Weekly VRDNs (GNMA COL)/(Bank of New York LIQ) |
|
|
3,565,000 |
|
|
5,000,000 |
|
Doughery County, GA, School System, 4.74% TANs, 12/29/2000 |
|
|
5,001,833 |
|
|
640,000 |
|
Douglas County, GA, Development Authority, (Series 1997), Weekly VRDNs (Paul B. Goble)/(Wachovia Bank of NC, N.A. LOC) |
|
|
640,000 |
|
|
5,585,000 |
|
Douglas County, GA, Development Authority, (Series 1998A), Weekly VRDNs (Heritage Bag)/(Wachovia Bank of NC, N.A. LOC) |
|
|
5,585,000 |
|
|
11,000,000 |
|
Douglas County, GA, Development Authority, Rubber Recovery Ltd., (Series 2000A), 6.00% BANs (Salomon Smith Barney Holdings, Inc.), 4/1/2001 |
|
|
11,000,000 |
|
|
1,215,000 |
|
Douglas County, GA, School District, 5.00% Bonds, 1/1/2001 |
|
|
1,216,470 |
|
|
1,240,000 |
|
Franklin County, GA, Industrial Building Authority, (Series 1995), Weekly VRDNs (Bosal Industries, Inc.)/(Bank of New York, New York LOC) |
|
|
1,240,000 |
|
|
4,500,000 |
|
Fulton County, GA, Housing Authority, (Series 1999), Weekly VRDNs (Walton Falls Apartments)/(Wachovia Bank of NC, N.A. LOC) |
|
|
4,500,000 |
|
|
2,160,000 |
|
Fulton County, GA, IDA Weekly VRDNs (C.K.S. Packaging, Inc.)/(SouthTrust Bank of Georgia, Atlanta LOC) |
|
|
2,160,000 |
|
|
1,400,000 |
|
Fulton County, GA, IDA, (Series 1997), Weekly VRDNs (In-Store Media Corp.)/(SunTrust Bank, Atlanta LOC) |
|
|
1,400,000 |
|
|
4,500,000 |
|
Gainesville and Hall County, GA, Development Authority, (Series 2000), Weekly VRDNs (ATEX, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
4,500,000 |
|
|
4,500,000 |
|
Gainesville and Hall County, GA, Development Authority, (Series 2000), Weekly VRDNs (ReConserve, Inc.)/(Branch Banking & Trust Co., Winston-Salem LOC) |
|
|
4,500,000 |
|
|
2,600,000 |
|
Gainesville, GA, Redevelopment Authority, Downtown Developments Ltd. (Series 1987), Weekly VRDNs (Downtown Developments Ltd.)/(Regions Bank, Alabama LOC) |
|
|
2,600,000 |
|
|
2,360,000 |
|
Gainesville, GA, Redevelopment Authority, IDRB (Series 1986), Weekly VRDNs (Hotel of Gainesville Associates Project)/(Regions Bank, Alabama LOC) |
|
|
2,360,000 |
|
|
1,500,000 |
|
Georgia Port Authority, (Series 1996A), Weekly VRDNs (Colonel's Island Terminal)/(SunTrust Bank, Atlanta LOC) |
|
|
1,500,000 |
|
|
4,000,000 |
|
Glynn County, GA, 4.80% TANs, 12/29/2000 |
|
|
4,000,304 |
|
|
2,805,000 |
|
Gwinnett County, GA, IDA, (Series 1996), Weekly VRDNs (Sidel, Inc. Project)/(Bank of America, N.A. LOC) |
|
|
2,805,000 |
|
|
530,000 |
|
Gwinnett County, GA, IDA, (Series 1997), Weekly VRDNs (Virgil R. Williams, Jr.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
530,000 |
|
|
2,200,000 |
|
Gwinnett County, GA, IDA, (Series 1998), Weekly VRDNs (Pace Manufacturing, Inc.)/(AmSouth Bank N.A., Birmingham LOC) |
|
|
2,200,000 |
|
|
3,000,000 |
|
Gwinnett County, GA, IDA, (Series 2000), Weekly VRDNs (Maltese Signs, Inc.)/(SunTrust Bank, Atlanta LOC) |
|
|
3,000,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Georgia--continued |
|
|
|
|
$ |
5,000,000 |
2 |
Gwinnett County, GA, Water and Sewer Authority, (PT-1169), 4.50% TOBs (Gwinnett County, GA)/(Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 7/26/2001 |
|
$ |
5,000,000 |
|
|
1,500,000 |
|
Hart County, GA, IDA, Revenue Bonds (Series 1996), Weekly VRDNs (Rock-Tenn Converting Co. Project)/(SunTrust Bank, Atlanta LOC) |
|
|
1,500,000 |
|
|
4,000,000 |
|
Jackson County, GA, IDA, (Series 1996), Weekly VRDNs (Buhler Quality Yarns Corp. Project)/(UBS AG LOC) |
|
|
4,000,000 |
|
|
1,150,000 |
|
Jackson County, GA, IDA, (Series 1997), Weekly VRDNs (Mullett Co.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
1,150,000 |
|
|
800,000 |
|
Jefferson, GA, Development Authority, (Series 1997), Weekly VRDNs (Ringwood Containers LP/(Wachovia Bank of NC, N.A. LOC) |
|
|
800,000 |
|
|
2,895,000 |
|
La Grange, GA, Multifamily Housing Authority Revenue Bonds, 4.90% TOBs (Lee's Crossing Project Phase I)/(Columbus Bank and Trust Co., GA LOC), Optional Tender 11/1/2000 |
|
|
2,895,000 |
|
|
3,075,000 |
|
La Grange, GA, Multifamily Housing Authority Revenue Bonds, 4.90% TOBs (Lee's Crossing Project Phase II)/(Columbus Bank and Trust Co., GA LOC), Optional Tender 11/1/2000 |
|
|
3,075,000 |
|
|
3,630,000 |
|
LaGrange, GA, Multifamily Housing Authority Refunding Revenue Bonds (Series 1997), Weekly VRDNs (Greenwood Park)/(Columbus Bank and Trust Co., GA LOC) |
|
|
3,630,000 |
|
|
3,465,000 |
|
LaGrange, GA, Multifamily Housing Authority Refunding Revenue Bonds (Series 1997), Weekly VRDNs (Meadow Terrace)/(Columbus Bank and Trust Co., GA LOC) |
|
|
3,465,000 |
|
|
4,300,000 |
|
Macon-Bibb County, GA, Hospital Authority, (Series 2000), Daily VRDNs (Central Georgia Senior Health, Inc.)/(SunTrust Bank LOC) |
|
|
4,300,000 |
|
|
7,770,000 |
|
Marietta, GA, Multifamily Housing Authority, Revenue Bonds (Series 1995), Weekly VRDNs (Chalet Apartments Project)/(General Electric Capital Corp. LOC) |
|
|
7,770,000 |
|
|
1,990,000 |
|
McDuffie County, GA, Development Authority Weekly VRDNs (Thomson Plastics)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
1,990,000 |
|
|
2,000,000 |
|
McDuffie County, GA, Development Authority, (Series 1998), 4.70% CP (Temple-Inland Forest Products Corp.)/(Temple-Inland, Inc. GTD), Mandatory Tender 12/5/2000 |
|
|
2,000,000 |
|
|
565,000 |
|
Milledgeville & Baldwin County, GA, Development Authority, (Series 1997), Weekly VRDNs (Oconee Area Properties, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
565,000 |
|
|
4,457,000 |
|
Milledgeville & Baldwin County, GA, Development Authority, (Series 2000), Weekly VRDNs (Vernay Manufacturing, Inc.)/(Firstar Bank, N.A., Cincinnati LOC) |
|
|
4,457,000 |
|
|
4,000,000 |
|
Monroe County, GA, Development Authority, (Series 2000), Weekly VRDNs (Old Tift College)/(First Union National Bank, Charlotte, NC LOC) |
|
|
4,000,000 |
|
|
6,220,000 |
|
Richmond County, GA, Board of Education, 4.50% Bonds (Georgia State GTD), 9/1/2001 |
|
|
6,226,814 |
|
|
2,500,000 |
|
Richmond County, GA, Development Authority, (Series 1999), Weekly VRDNs (Rock-Tenn Converting Co.)/(SunTrust Bank, Atlanta LOC) |
|
|
2,500,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Georgia--continued |
|
|
|
|
$ |
2,565,000 |
|
Rockdale County, GA, Development Authority, (Series 1995), Weekly VRDNs (Great Southern Wood Preserving Inc.)/(SunTrust Bank, Central Florida LOC) |
|
$ |
2,565,000 |
|
|
2,000,000 |
|
Rome-Floyd County, GA, Development Authority, (Series 2000), Weekly VRDNs (Steel King Industries, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,000,000 |
|
|
6,000,000 |
|
Rome-Floyd County, GA, Development Authority, (Series 2000), Weekly VRDNs (VTI of Georgia)/(Wells Fargo Bank, Minnesota N.A. LOC) |
|
|
6,000,000 |
|
|
3,000,000 |
|
Savannah, GA, EDA, (Series 1995A), Weekly VRDNs (Home Depot, Inc.) |
|
|
3,000,000 |
|
|
2,950,000 |
|
Stephens County, GA, Development Authority, (Series 1999), Weekly VRDNs (Toccoa Packaging, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
2,950,000 |
|
|
2,431,000 |
|
Upson County, GA, (Series A), 4.95% TANs, 12/29/2000 |
|
|
2,431,562 |
|
|
2,395,000 |
|
Upson County, GA, 4.55% TANs, 12/29/2000 |
|
|
2,395,179 |
|
|
4,100,000 |
|
Valdosta, GA, City Schools, (Series 2000), 4.60% TANs, 12/29/2000 |
|
|
4,101,244 |
|
|
1,000,000 |
|
Wayne County, GA, IDA, Revenue Bonds (Series 1995), Weekly VRDNs (Harsco Corp.)/(Bank of America, N.A. LOC) |
|
|
1,000,000 |
|
|
1,410,000 |
|
Whitfield County, GA, Development Authority, (Series 1996), Weekly VRDNs (AMC International, Inc. Project)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
1,410,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
|
$ |
216,845,170 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 68.2% of the portfolio based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
96.77% |
|
3.23% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. This security has been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $5,000,000, which represents 2.3% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($218,297,302) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
BANs |
--Bond Anticipation Notes |
|
COL |
--Collateralized |
|
CP |
--Commercial Paper |
|
EDA |
--Economic Development Authority |
|
GNMA |
--Government National Mortgage Association |
|
GTD |
--Guaranteed |
|
IDA |
--Industrial Development Authority |
|
IDRB |
--Industrial Development Revenue Bond |
|
INS |
--Insured |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
SFM |
--Single Family Mortgage |
|
TANs |
--Tax Anticipation Notes |
|
TOBs |
--Tender Option Bonds |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
216,845,170 |
|
Cash |
|
|
|
|
|
428,882 |
|
Income receivable |
|
|
|
|
|
1,881,914 |
|
Receivable for shares sold |
|
|
|
|
|
160 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
219,156,126 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
499,090 |
|
|
|
|
Income distribution payable |
|
|
312,998 |
|
|
|
|
Accrued expenses |
|
|
46,736 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
858,824 |
|
|
||||||
|
Net assets for 218,297,302 shares outstanding |
|
|
|
|
$ |
218,297,302 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share: |
|
|
|
|
|
|
|
$218,297,302 ÷ 218,297,302 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statement
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
10,021,643 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
1,190,811 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
179,362 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
15,637 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
22,996 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
2,262 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,758 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
11,018 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
44,708 |
|
|
|
|
|
Shareholder services fee |
|
|
|
|
|
|
595,405 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
22,584 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
17,294 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
12,795 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
6,748 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
2,133,378 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(823,486 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee |
|
|
(142,897 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(966,383 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
1,166,995 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
8,854,648 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
8,854,648 |
|
|
$ |
6,672,078 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
(8,854,648 |
) |
|
|
(6,672,078 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
739,251,553 |
|
|
|
720,843,748 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
4,612,361 |
|
|
|
3,573,586 |
|
|
Cost of shares redeemed |
|
|
(792,698,941 |
) |
|
|
(625,382,790 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(48,835,027 |
) |
|
|
99,034,544 |
|
|
|
||||||||
|
Change in net assets |
|
|
(48,835,027 |
) |
|
|
99,034,544 |
|
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
267,132,329 |
|
|
|
168,097,785 |
|
|
|
||||||||
|
End of period |
|
$ |
218,297,302 |
|
|
$ |
267,132,329 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Effective February 1, 2000, Georgia Municipal Cash Trust (the "Fund") became a portfolio of the Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to provide current income exempt from federal regular income tax and the personal income tax imposed by the State of Georgia consistent with stability of principal and liquidity.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees (the "Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). At October 31, 2000, capital paid-in aggregated $218,297,302.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Shares sold |
|
739,251,553 |
|
|
720,843,748 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
4,612,361 |
|
|
3,573,586 |
|
|
Shares redeemed |
|
(792,698,941 |
) |
|
(625,382,790 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(48,835,027 |
) |
|
99,034,544 |
|
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee and/or reimburse certain operating expenses of the Fund. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Trust's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $461,460,000 and $579,405,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 67.5% of the securities in the portfolio of investments were backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 10.5% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Georgia Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Georgia Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000 is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as it becomes available. To obtain the SAI, the Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Georgia Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N328
G01204-01 (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
[Galaxy Funds Logo here]
As with all mutual funds, the Securities and Exchange Commission has not approved or disapproved of these securities or passed upon the adequacy of this prospectus, and any representation to the contrary is a criminal offense.
December 31, 2000
A Statement of Additional Information (SAI) dated January 31, 2000, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund’s SAI and Semi-Annual Reports to shareholders as they become available. To obtain the SAI, the Semi-Annual Report and other information without charge, and make inquiries, call your investment professional or the Fund at 1-877-BUY-GALAXY (1-877-289-4252).
You can obtain information about the Fund (including the SAI) by writing to or visiting the Public Reference Room of the Securities and Exchange Commission in Washington, DC. You may also access fund information from the SEC’s Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at [email protected]. or by writing to the SEC’s Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room’s operations and copying fees.
[Galaxy Funds Logo here]
THE GALAXY FUNDS
P.O. BOX 6520
PROVIDENCE, RI 02940-6520
www.galaxyfunds.com
FEDERATED
World-Class Investment Manager
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 60934N237
G00507-01 (12/00)
FILE NO. 811-5950
MF-0136
| MASSACHUSETTS MUNICIPAL CASH TRUST—GALAXY-BKB SHARES | 1 | |
| SHAREHOLDER SERVICES | 4 | |
| How to reach the Fund | 4 | |
| Pricing of Fund shares | 4 | |
| How the Fund is sold | 4 | |
| How to open an account and purchase shares | 4 | |
| How to sell and exchange shares | 6 | |
| Account and share information | 8 | |
| TAX INFORMATION | 9 | |
| MORE ABOUT MASSACHUSETTS MUNICIPAL CASH TRUST— | ||
| GALAXY-BKB SHARES | 10 | |
| MANAGEMENT | 12 | |
| FINANCIAL HIGHLIGHTS | 13 |
This summary briefly describes the principal risks of investing in the Fund. For further information on the Fund, please read the section entitled More About Massachusetts Municipal Cash Trust—Galaxy-BKB Shares.
[Graphic Representation Omitted--See Appendix]
Massachusetts Municipal Cash Trust is a money market fund which seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund’s investment objective is to provide current income which is exempt from federal regular income tax and Massachusetts state income tax 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.
[Graphic Representation Omitted--See Appendix]
The Fund invests in short-term, high-quality Massachusetts tax-exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Massachusetts state income tax.
Interest from the Fund’s investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund’s portfolio will be 90 days or less.
[Graphic Representation Omitted--See Appendix]
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single issuer, an investment in the Fund may involve additional risks compared to a fully diversified money market fund. An investment in the Fund is not a deposit of Fleet National Bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other governmental agency.
[Graphic Representation Omitted--See Appendix]
The Bar Chart and Performance Table below reflect historical performance data for Galaxy-BKB Shares of Massachusetts Municipal Cash Trust prior to it’s reorganization into the Fund, which is a newly created portfolio of Money Market Obligations Trust (the “Trust”).
When you consider this information, please remember that the Fund’s performance in past years is not necessarily an indication of how the Fund will do in the future.
Total Return
(per calendar year)
[Graphic Representation Omitted--See Appendix]
The Fund’s Galaxy-BKB Shares 7-Day Net Yield as of December 31, 1999 was 3.88%.
| Highest and Lowest Return (Quarterly 1994-1999) |
|||||
| Quarter Ended | |||||
| Highest | 0.88 | % | June 30, 1995 | ||
| Lowest | 0.43 | % | March 31, 1994 | ||
| Average Annual Total Returns (through December 31, 1999) |
||||||
| 1 Year | 5 Years | Life of Fund | ||||
| (since 2/22/93) | ||||||
| MA Municipal Cash Trust — Galaxy- BKB Shares |
2.77% | 3.03% | 2.77% | |||
For up-to-date yield information, please call 1-877-BUY-GALAXY.
[Graphic Representation Omitted--See Appendix]
This table describes the fees and expenses that you may pay if you buy and hold Galaxy-BKB Shares of the Fund.
| SHAREHOLDER FEES (fees paid directly from your investment) | ||
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | None | |
| Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) | None | |
| Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) | None | |
| Redemption Fee (as a percentage of amount redeemed, if applicable) | None | |
| Exchange Fee | None | |
| ANNUAL FUND OPERATING EXPENSES (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 waived certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. | ||
| Total Waivers of Fund Expenses | 0.31% | |
| Total Actual Annual Fund Operating Expenses (after waivers) | 0.57% | |
| (2) The adviser has voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the fund (after the voluntary waiver) was 0.44% for the fiscal year ended October 31, 2000. | ||
| (3) The shareholder services fee has been voluntarily waived. This voluntary waiver can be terminated at any time. The shareholder services fee paid by the Fund’s Institutional Services Shares (after the voluntary waiver) was 0.00% for the fiscal year ended October 31, 2000. | ||
This Example is intended to help you compare the cost of investing in the Fund’s Galaxy-BKB Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund’s Galaxy-BKB 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 Galaxy-BKB Shares operating expenses are before waivers as shown above 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 | |||||||
| $90 | $281 | $488 | $1,084 | |||||||
| By telephone | 1-877-BUY-GALAXY (1-877-289-4252) Call for account or Fund information or an account application. |
| By regular mail | The Galaxy Funds | |
| and express or | P.O. Box 6520 | |
| overnight service | Providence, RI 02940-6520 |
You can purchase, redeem, or exchange shares any day the New York Stock Exchange (NYSE) and the Federal Reserve Bank of Boston are open, except Columbus Day and Veteran’s Day. The Fund does not impose a sales charge.
The Fund attempts to maintain the NAV of its shares at $1.00 by valuing the portfolio securities using the amortized cost method, which is approximately equal to market value. The Fund cannot guarantee that its NAV will always remain at $1.00 per share. 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 $1,000. Subsequent investments must be in amounts of at least $250. If you participate in the automatic investment program, the minimum for additional share purchases is $50. The Fund may waive any investment minimums from time to time.
The Fund offers two share classes: Galaxy-BKB Shares and Institutional Service Shares, each representing interests in a single portfolio of securities. This prospectus relates only to Galaxy-BKB Shares. Each share class has other expenses that affect their performance. Please call 1-800-341-7400 for more information concerning Institutional Service Shares.
The Fund’s Distributor, Federated Securities Corp., markets the shares described in this prospectus to financial institutions or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Massachusetts taxpayers because it invests in Massachusetts municipal securities.
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).
As a holder of Galaxy-BKB Shares, you may purchase Galaxy-BKB Shares of any other Galaxy Fund without paying a sales charge. Additionally, you may purchase Retail A Shares of any of the Galaxy Funds that do not offer Galaxy-BKB Shares without paying a sales charge.
You may purchase shares through an investment professional or through an exchange from another fund in the Galaxy-BKB family. You may also purchase shares through certain financial institutions, including Fleet National Bank. These institutions may have their own procedures for buying and selling shares, and may charge fees. Contact your financial institution for more information. The Fund and the Distributor reserve the right to reject any request to purchase or exchange shares, and will do so when it believes that a purchase is part of a market-timing strategy.
Complete and sign the appropriate account application. Purchase orders must be received by 11:30 a.m. (Eastern time) in order to receive that day’s dividend. You will become the owner of shares and receive dividends when the Fund receives your payment.
By Wire. Purchases may also be made by wiring money from your bank account to your Fund account. Each time you wish to send a wire, you must call 1-877-BUY-GALAXY (1-877-289-4252) to receive wiring instructions before you send money. All wire transfers and instructions should be sent to Fleet National Bank, Boston, MA 02109, ABA #011-000-138, DDA #79673-5702, Ref: The Galaxy Fund, Account Number and Account Registration. Once the money has been wired, please call 1-877-BUY-GALAXY (1-877-289-4252) to purchase your shares.
By Check. If you wish to make your purchase by mail, please send a completed application and check payable to “The Galaxy Funds-Massachusetts Municipal Cash Trust” to:
The Galaxy Funds
P.O. Box 6520
Providence, RI 02940-6520
If you send your check by express or overnight service and require a street address, see “How to Reach the Fund.”
By Electronic Transfer. Once you have opened an account, you may purchase additional shares by debiting your designated bank account. You can establish this option by completing the “Electronic Transfer and Bank Wire” section of the application.
By Automatic Investment. Automatic investing is an easy way to add to your account on a regular basis. Galaxy-BKB Shares offer an automatic investment plan to help you achieve your financial goals as simply and conveniently as possible. Please note that minimum purchase amounts apply. Call 1-877-BUY-GALAXY (1-877-289-4252) for information.
Through An Exchange. On any business day, you may exchange your shares for Galaxy-BKB Shares of any of the Galaxy Funds without paying a sales charge. Additionally, you may exchange your shares for Retail A Shares of any of the Galaxy Funds that do not offer Galaxy-BKB Shares without paying a sales charge. To make exchanges, call 1-877-BUY-GALAXY (1-877-289-4252). Exchanges are processed at the NAV next calculated after an exchange request in good order is received and approved. Please read the prospectus for the Fund into which you are exchanging. The Fund reserves the right to reject any exchange request or to change or terminate the exchange privilege at any time. An exchange is the sale of shares of one Fund and purchase of shares of another Fund, and could result in taxable gains or losses.
Paying for Shares
Submit your redemption or exchange request by the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time). Redemption or exchange requests received by the Fund before 12:00 noon (Eastern time) will not include that day’s dividend. Requests for redemptions over $100,000 must be in writing with signatures guaranteed (see below).
Please note that your redemption proceeds may be delayed for up to ten business days after purchase. This is to assure that money from the purchase of shares being redeemed has been received and collected. You may gain or lose money when you redeem shares.
By Telephone. If you selected this option on your account application, you may make redemptions from your account by calling 1-877-BUY-GALAXY (1-877-289-4252). You may not close your account by telephone. If you would like to establish this option on an existing account, please call 1-877-BUY-GALAXY (1-877-289-4252).
By Mail. To redeem all or part of your shares by mail, please send your request in writing to one of the addresses listed above under “How To Open An Account” and include the following information:
By Wire. You may redeem shares by wire by calling 1-877-BUY-GALAXY (1-877-289-4252). All wire transfers and instructions should be sent to Fleet National Bank, Boston, MA 02109, ABA #011-000-138, DDA #79673-5702, Ref: The Galaxy Fund, Account Number and Account Registration. Redemption proceeds will be wired directly to the domestic commercial bank account you designated on your account application. You will be charged a fee for each wire redemption, which will be deducted from your redemption proceeds.
Signature Guarantees
Signatures must be guaranteed if:
The Fund may also require signature guarantees for other redemptions. 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, broker, dealer, or securities exchange member. A notary public cannot provide a signature guarantee.
Payment Methods For Redemptions
Redemption proceeds may be credited to your designated bank account, paid by
check, or paid by wire or electronic transfer as you previously designated on
your account application.
By Check. Redemption proceeds will be sent to the shareholder(s) on our records at the address on our records within seven days after receipt of a valid redemption request.
By Wire. If you have selected this option, your redemption proceeds will be wired directly into your designated bank account, normally within one business day. There is no limitation on the number of redemption transactions by wire. However, there is a fee for each wire and your bank may charge an additional fee to receive the wire. If you would like to establish this option on an existing account, please call 1-877-BUY-GALAXY (1-877-289-4252) to sign up for this service.
By Electronic Transfer. If you have established this option, your redemption proceeds will be transferred electronically to your designated bank account. To establish this option on an existing account, please call 1-877-BUY-GALAXY (1-877-289-4252) to request the appropriate form.
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:
You will not accrue interest or dividends on uncashed checks from the Fund. If those checks are undeliverable and returned to the Fund, the proceeds will be reinvested in shares.
Additional Conditions
Telephone Transactions. The Fund and its agents will each follow reasonable procedures to confirm that instructions received by telephone are genuine, which may include taping telephone conversations. The Fund and its agents will not be responsible for any losses that may result from acting on telephone instructions that it reasonably believes to be genuine. The Fund may refuse any telephone transaction for any reason.
Share Certificates. The Fund does not issue share certificates.
Account Activity. You will receive periodic statements reporting all account activity, including dividends and capital gains paid.
Taxpayer Identification Number. On your account application or other appropriate form, you will be asked to certify that your social security or taxpayer identification number is correct and that you are not subject to backup withholding for failing to report income to the IRS. If you are subject to backup withholding or you did not certify your taxpayer identification number, the IRS requires the Fund to withhold 31% of any dividends and redemption or exchange proceeds. The Fund reserves the right to reject any application that does not include a certified social security or taxpayer identification number.
Address Changes. A change in address on your account must be made in writing with your signature guaranteed, and be signed by all account owners. Include the name of the Fund, the account number(s), the name(s) on the account and both the old and new addresses. Call 1-877-BUY-GALAXY (1-877-289-4252) if you need more information.
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. If you elect cash payments and the payment is returned as undeliverable, your cash payment will be reinvested in shares and your distribution option will convert to automatic reinvestment. If any distribution check remains uncashed for six months the check will no longer be honored, the check amount will be reinvested in shares, and you will not accrue any interest or dividends on this amount prior to the reinvestment.
Accounts With Low Balances. 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 60 days to purchase additional shares to meet the minimum.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund’s dividends may not be exempt. Dividends may be subject to state and local taxes. The Fund’s dividends will be exempt from Massachusetts state personal income tax if they are derived from interest on obligations exempt from Massachusetts personal income taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions and exchanges are taxable sales. Please consult your tax preparer regarding your federal, state and local tax liability.
Principal Investment Strategies
The Fund invests in a portfolio of high-quality Massachusetts tax-exempt securities maturing in 397 days or less. The Fund will invest so that at least 80% of its annual interest income is exempt from federal regular income tax and Massachusetts state income taxes. Interest from the Fund’s investments may be subject to AMT. The dollar-weighted average maturity of the Fund’s portfolio will be 90 days or less. The portfolio manager actively manages the Fund’s portfolio, seeking to select investments with enhanced yields and to limit credit risk.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser’s standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The portfolio manager targets an average portfolio maturity based on interest rate outlook and the tax-exempt securities available. The portfolio manager formulates interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth, current and expected interest rates and inflation, and the Federal Reserve Board’s monetary policy. The portfolio manager structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The portfolio manager generally shortens the portfolio’s maturity when interest rates are expected to rise and extends the maturity when interest rates are expected to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
Temporary Defensive Investments. The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal and Massachusetts income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Principal Securities In Which The Fund Invests
Tax-Exempt Securities. Tax-exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax-exempt securities, which are categorized by their source of repayment.
Variable Rate Demand Instruments. Variable rate demand instruments are tax-exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal Notes. Municipal notes are short-term tax-exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit Enhancement
Credit enhancement consists of an arrangement in which a company agrees to pay
amounts due on a fixed income security if the issuer defaults. In some cases,
the company providing credit enhancement makes all payments directly to the
security holders and receives reimbursement from the issuer. Normally, the credit
enhancer has greater financial resources and liquidity than the issuer. For
this reason, the Adviser usually evaluates the credit risk of a fixed income
security based solely on its credit enhancement.
Investment Ratings
The securities in which the Fund invests must be rated in one of the two highest
short-term rating categories by one or more NRSROs or be of comparable quality
to securities having such rating.
Specific Risks Of Investing In The Fund
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. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor’s and Moody’s Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser’s credit assessment.
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, the prices of fixed income securities fall. However, market factors, such as the demand for particular fixed income securities, may cause the price of certain fixed income securities to fall while the prices of other securities rise or remain unchanged.
Interest rate changes have a greater effect on the price of fixed income securities with longer maturities. Money market funds try to minimize this risk by purchasing short-term securities.
Sector Risks. A substantial part of the Fund’s portfolio may be comprised of securities issued by Massachusetts issuers or credit enhanced by insurance companies or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Massachusetts Risk. Since the Fund invests primarily in issuers from Massachusetts, the Fund may be subject to additional risks compared to Funds that invest in multiple states. Massachusetts’ economy is relatively diversified across the manufacturing, trade, finance insurance and real estate and services sectors. Any downturn in these industries may adversely affect the economy of the state.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The Financial Highlights will help you understand the Fund’s financial performance for the past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund’s audited financial statements, is included in this prospectus.
(For a Share outstanding throughout each period)
| Year Ended October 31, | ||||||||||||||||||||
| 2000 | 19991 | 1998 | 1997 | 1996 | ||||||||||||||||
| Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||
| Income from Investment Operations: | ||||||||||||||||||||
| Net investment income | 0.03 | 0.03 | 0.03 | 0.03 | 0.03 | |||||||||||||||
| Less Distributions: | ||||||||||||||||||||
| Distributions from net investment income | (0.03 | ) | (0.03 | ) | (0.03 | ) | (0.03 | ) | (0.03 | ) | ||||||||||
| Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||||||
| Total Return2 | 3.48 | % | 2.70 | % | 3.03 | % | 3.07 | % | 3.05 | % | ||||||||||
| Ratios to Average Net Assets: | ||||||||||||||||||||
| Expenses | 0.57 | % | 0.56 | % | 0.57 | % | 0.57 | % | 0.58 | % | ||||||||||
| Net investment income | 3.38 | % | 2.67 | % | 2.97 | % | 3.03 | % | 3.01 | % | ||||||||||
| Expense waiver/reimbursement3 | 0.31 | % | 0.35 | % | 0.36 | % | 0.39 | % | 0.42 | % | ||||||||||
| Supplemental Data: | ||||||||||||||||||||
| Net assets, end of period (000 omitted) | $ | 92,810 | $ | 199,860 | $ | 162,557 | $ | 73,837 | $ | 54,667 | ||||||||||
(1) For the year ended October 31, 1999, the Fund was audited by Ernst &
Young LLP. Each of the previous years was audited by other auditors.
(2) Based on net asset value, which does not reflect the sales charge or contingent
deferred sales charge, if applicable.
(3) This voluntary expense decrease is reflected in both the expense and the
net investment income ratios shown above.
October 31, 2000
| Principal Amount |
Value |
|||||
|
(1) Short-Term Municipals–98.8% |
||||||
|
Massachusetts–96.5% |
||||||
|
$ |
23,166,000 |
ABN AMRO MuniTOPS Certificates Trust (Massachusetts Non-AMT) (Series 1998-12) Weekly VRDNs (Massachusetts Water Resources Authority)/(MBIA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) |
$ |
23,166,000 |
||
|
25,360,000 |
ABN AMRO MuniTOPS Certificates Trust (Massachusetts Non-AMT) (Series 2000-2) Weekly VRDNs (Massachusetts Water Resources Authority)/(FGIC INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) |
25,360,000 |
||||
|
5,014,000 |
Bedford, MA, 4.25% BANs, 12/4/2000 |
5,015,307 |
||||
|
1,500,000 |
Boston, MA Water & Sewer Commission, General Revenue Bonds (Series 1994A) Weekly VRDNs (State Street Bank and Trust Co. LOC) |
1,500,000 |
||||
|
7,995,000 |
Bridgewater-Raynham, MA Regional School District, 5.00% BANs, 7/6/2001 |
8,010,474 |
||||
|
2,533,000 |
Cambridge, MA, 4.75% Bonds, 11/1/2000 |
2,533,000 |
||||
|
7,496,500 |
Canton, MA, 5.25% BANs, 6/8/2001 |
7,518,826 |
||||
|
9,731,000 |
Clipper Tax-Exempt Certificates Trust (Massachusetts Non-AMT) (Series 1999-1) Weekly VRDNs (Massachusetts State HFA)/(MBIA INS)/(State Street Bank and Trust Co. LIQ) |
9,731,000 |
||||
|
7,500,000 |
Clipper Tax-Exempt Certificates Trust (Massachusetts Non-AMT) (Series 2000-2) Weekly VRDNs (Massachusetts Turnpike Authority)/(MBIA INS)/(State Street Bank and Trust Co. LIQ) |
7,500,000 |
||||
|
54,047,162 |
Clipper Tax-Exempt Certificates Trust, (Series A) Weekly VRDNs (Massachusetts State Lottery Commission)/(AMBAC INS)/(State Street Bank and Trust Co. LIQ) |
54,047,162 |
||||
|
3,000,000 |
Commonwealth of Massachusetts Weekly VRDNs (AMBAC INS)/(Citibank NA, New York LIQ) |
3,000,000 |
||||
|
6,062,000 |
Dighton-Rehobeth, MA Regional School District, 5.00% BANs, 7/6/2001 |
6,073,732 |
||||
|
8,000,000 |
Fall River, MA, 5.25% BANs, 6/1/2001 |
8,015,510 |
||||
|
2,900,000 |
Freetown-Lakeville, MA Regional School District, 4.75% BANs, 9/28/2001 |
2,909,573 |
||||
|
6,630,000 |
Gardner, MA, 4.70% BANs, 4/6/2001 |
6,638,133 |
||||
|
10,000,000 |
Marshfield, MA, 5.00% BANs, 6/20/2001 |
10,042,958 |
||||
|
3,325,000 |
Mashpee, MA, 4.30% BANs, 12/1/2000 |
3,325,000 |
||||
|
33,485,000 |
Massachusetts Bay Transportation Authority, (Series 1999) Weekly VRDNs (Commerzbank AG, Frankfurt LIQ) |
33,485,000 |
||||
|
15,000,000 |
Massachusetts Bay Transportation Authority, MERLOTS (Series 2000H) Weekly VRDNs (FGIC INS)/(First Union National Bank, Charlotte, NC LIQ) |
15,000,000 |
||||
|
7,700,000 |
(2) Massachusetts Bay Transportation Authority, PT-1218, 4.20% TOBs (FGIC INS)/(Merrill Lynch & Co., Inc. LIQ), Optional Tender 1/18/2001 |
7,700,000 |
||||
|
3,000,000 |
Massachusetts Development Finance Agency, (Series 1998A) Weekly VRDNs (Shady Hill School)/(State Street Bank and Trust Co. LOC) |
3,000,000 |
||||
|
7,420,000 |
Massachusetts Development Finance Agency, (Series 1999) Weekly VRDNs (Dean College)/(Fleet National Bank, Springfield, MA LOC) |
7,420,000 |
||||
|
9,000,000 |
Massachusetts Development Finance Agency, (Series 2000) Weekly VRDNs (Draper Laboratory)/(MBIA INS)/(Morgan Guaranty Trust Co., New York LIQ) |
9,000,000 |
||||
|
4,000,000 |
Massachusetts Development Finance Agency, (Series 2000) Weekly VRDNs (Marine Biological Laboratory)/(Allied Irish Banks PLC LOC) |
4,000,000 |
||||
|
10,000,000 |
Massachusetts Development Finance Agency, (Series 2000) Weekly VRDNs (Wentworth Institute of Technology, Inc.)/(AMBAC INS)/(State Street Bank and Trust Co. LIQ) |
10,000,000 |
||||
|
3,500,000 |
Massachusetts Development Finance Agency, (Series 2000) Weekly VRDNs (Worcester Academy)/(Allied Irish Banks PLC LOC) |
3,500,000 |
||||
|
9,955,000 |
Massachusetts Development Finance Agency, (Series B) Weekly VRDNs (Edgewood Retirement Community Project)/(Fleet National Bank, Springfield, MA LOC) |
9,955,000 |
||||
|
4,178,000 |
Massachusetts HEFA, Weekly VRDNs (Harvard University) |
4,178,000 |
||||
|
11,000,000 |
Massachusetts HEFA, Weekly VRDNs (Harvard University) |
11,000,000 |
||||
|
27,700,000 |
Massachusetts HEFA, (Series 1985H) Weekly VRDNs (Boston University)/(State Street Bank and Trust Co. LOC) |
27,700,000 |
||||
|
1,740,000 |
Massachusetts HEFA, (Series 1999) Weekly VRDNs (CIL Reality of Massachusetts)/(Dexia Public Finance Bank S.A. LOC) |
1,740,000 |
||||
|
15,100,000 |
Massachusetts HEFA, (Series A) Weekly VRDNs (Brigham & Women’s Hospital)/(Landesbank Hessen-Thueringen, Frankfurt LOC) |
15,100,000 |
||||
|
8,000,000 |
Massachusetts HEFA, (Series A) Weekly VRDNs (University of Massachusetts)/(Dexia Public Finance Bank S.A. LOC) |
8,000,000 |
||||
|
5,000,000 |
Massachusetts HEFA, (Series A), 10.25% Bonds (Fairview Extended Care Services, Inc.)/(United States Treasury PRF), 1/1/2001 (@103) |
5,197,943 |
||||
|
1,500,000 |
Massachusetts HEFA, (Series B) Weekly VRDNs (Clark University)/(Fleet Bank N.A. LOC) |
1,500,000 |
||||
|
8,940,000 |
Massachusetts HEFA, (Series B) Weekly VRDNs (Endicott College)/(BankBoston, N.A. LOC) |
8,940,000 |
||||
|
23,320,000 |
Massachusetts HEFA, (Series B) Weekly VRDNs (Hallmark Health System)/(FSA INS)/(Fleet National Bank, Springfield, MA LIQ) |
23,320,000 |
||||
|
13,600,000 |
Massachusetts HEFA, (Series F) Weekly VRDNs (Children’s Hospital of Boston)/(Landesbank Hessen-Thueringen, Frankfurt LIQ) |
13,600,000 |
||||
|
17,070,000 |
Massachusetts HEFA, (Series I) Weekly VRDNs (Harvard University) |
17,070,000 |
||||
|
5,700,000 |
Massachusetts HEFA, (Series R) Weekly VRDNs (Harvard University) |
5,700,000 |
||||
|
6,200,000 |
Massachusetts HEFA, MERLOTS (Series 2000-T) Weekly VRDNs (Simmons College)/(AMBAC INS)/(First Union National Bank, Charlotte, NC LIQ) |
6,200,000 |
||||
|
18,500,000 |
Massachusetts HEFA, MERLOTs (Series 2000WW) Weekly VRDNs (Harvard University)/(First Union National Bank, Charlotte, NC LIQ) |
18,500,000 |
||||
|
1,800,000 |
Massachusetts IFA, (Series 1992) Weekly VRDNs (Holyoke Water Power Co.)/(Canadian Imperial Bank of Commerce LOC) |
1,800,000 |
||||
|
14,250,000 |
Massachusetts IFA, (Series 1992B), 4.15% CP (New England Power Co.), Mandatory Tender 12/6/2000 |
14,250,000 |
||||
|
10,000,000 |
Massachusetts IFA, (Series 1992B), 4.25% CP (New England Power Co.), Mandatory Tender 1/17/2001 |
10,000,000 |
||||
|
10,000,000 |
Massachusetts IFA, (Series 1992B), 4.30% CP (New England Power Co.), Mandatory Tender 1/16/2001 |
10,000,000 |
||||
|
5,900,000 |
Massachusetts IFA, (Series 1994) Weekly VRDNs (Nova Realty Trust)/(Fleet National Bank, Springfield, MA LOC) |
5,900,000 |
||||
|
7,740,000 |
Massachusetts IFA, (Series 1995) Weekly VRDNs (Goddard House)/(Fleet Bank N.A. LOC) |
7,740,000 |
||||
|
7,200,000 |
Massachusetts IFA, (Series 1995) Weekly VRDNs (Whitehead Institute for Biomedical Research) |
7,200,000 |
||||
|
7,184,000 |
Massachusetts IFA, (Series 1996) Weekly VRDNs (Newbury College)/(BankBoston, N.A. LOC) |
7,184,000 |
||||
|
2,675,000 |
Massachusetts IFA, (Series 1997) Weekly VRDNs (Massachusetts Society for the Prevention of Cruelty to Animals)/(Fleet National Bank, Springfield, MA LOC) |
2,675,000 |
||||
|
5,760,000 |
Massachusetts IFA, (Series 1997) Weekly VRDNs (Mount Ida College)/(Dexia Public Finance Bank S.A. LOC) |
5,760,000 |
||||
|
5,965,000 |
Massachusetts IFA, (Series 1998A) Weekly VRDNs (JHC Assisted Living Corp.)/(Fleet National Bank, Springfield, MA LOC) |
5,965,000 |
||||
|
1,125,000 |
Massachusetts IFA, (Series A) Weekly VRDNs (Hockomock YMCA)/(Bank of Nova Scotia, Toronto LOC) |
1,125,000 |
||||
|
9,600,000 |
Massachusetts IFA, (Series B) Weekly VRDNs (Williston North Hampton School)/(Fleet National Bank, Springfield, MA LOC) |
9,600,000 |
||||
|
2,700,000 |
Massachusetts IFA, 5.00% Bonds (Museum of Fine Arts, Boston)/(MBIA INS), 1/1/2001 |
2,704,276 |
||||
|
10,625,000 |
Massachusetts Municipal Wholesale Electric Co., Trust Receipts (Series 2000 FR/RI- L3) Weekly VRDNs (Lehman Brothers, Inc. LIQ)/(MBIA LOC) |
10,625,000 |
||||
|
10,000,000 |
Massachusetts State HFA, MERLOTS (Series 1999H) Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
10,000,000 |
||||
|
9,290,000 |
(2) Massachusetts State HFA, (PT-162) 4.20% TOBs (MBIA INS)/(BNP Paribas LIQ), Optional Tender 1/25/2001 |
9,290,000 |
||||
|
4,835,000 |
Massachusetts State, (PA-647) Weekly VRDNs (Merrill Lynch & Co., Inc. LIQ) |
4,835,000 |
||||
|
3,255,000 |
Massachusetts State, (Series 1999 SG 126) Weekly VRDNs (Societe Generale, Paris LIQ) |
3,255,000 |
||||
|
27,545,000 |
Massachusetts Turnpike Authority, Variable Rate Certificates (Series 1997N) Weekly VRDNs (MBIA INS)/(Bank of America, N.A. LIQ) |
27,545,000 |
||||
|
10,090,000 |
(2) Massachusetts Water Pollution Abatement Trust Pool, (PT-1185) 4.40% TOBs (Merrill Lynch & Co., Inc. LIQ), Optional Tender 9/13/2001 |
10,090,000 |
||||
|
11,300,000 |
Massachusetts Water Pollution Abatement Trust Pool, SGA (Series 87) Daily VRDNs (Societe Generale, Paris LIQ) |
11,300,000 |
||||
|
16,500,000 |
Massachusetts Water Pollution Abatement Trust Pool, Subordinate, MERLOTS (Series 1999N) Weekly VRDNs (First Union National Bank, Charlotte, N.C. LIQ) |
16,500,000 |
||||
|
9,000,000 |
Massachusetts Water Resources Authority, (Series 1994), 4.30% CP (Morgan Guaranty Trust Co., New York LOC), Mandatory Tender 1/19/2001 |
9,000,000 |
||||
|
8,000,000 |
Massachusetts Water Resources Authority, (Series 1994), 4.35% CP (Morgan Guaranty Trust Co., New York LOC), Mandatory Tender 12/21/2000 |
8,000,000 |
||||
|
20,050,000 |
Massachusetts Water Resources Authority, (Series 1998D) Weekly VRDNs (FGIC INS)/(FGIC Securities Purchase, Inc. LIQ) |
20,050,000 |
||||
|
14,200,000 |
Massachusetts Water Resources Authority, (Series 2000B) Weekly VRDNs (FGIC INS)/(FGIC Securities Purchase, Inc. LIQ) |
14,200,000 |
||||
|
19,500,000 |
Monson, MA, 5.00% BANs, 8/9/2001 |
19,571,701 |
||||
|
3,000,000 |
New Bedford, MA, 5.50% BANs (Fleet National Bank, Springfield, MA LOC), 12/1/2000 |
3,001,800 |
||||
|
3,679,000 |
North Andover, MA, 5.00% BANs, 6/21/2001 |
3,684,121 |
||||
|
2,000,000 |
Oxford, MA, 4.75% BANs, 1/18/2001 |
2,001,233 |
||||
|
10,000,000 |
Plainville, MA, 4.25% BANs, 12/15/2000 |
10,002,881 |
||||
|
9,500,000 |
Springfield, MA, 4.75% BANs (Fleet National Bank, Springfield, MA LOC), 1/12/2001 |
9,508,983 |
||||
|
3,390,000 |
Springfield, MA, 5.00% BANs (Fleet National Bank, Springfield, MA LOC), 6/22/2001 |
3,400,351 |
||||
|
20,000,000 |
Sudbury, MA, 4.75% BANs, 12/29/2000 |
20,017,151 |
||||
|
4,688,700 |
Watertown, MA, 4.25% BANs, 11/16/2000 |
4,689,384 |
||||
|
6,120,000 |
Weymouth, MA Housing Authority, PT 1062, Weekly VRDNs (Queen Ann Apartments)/(Merrill Lynch & Co., Inc. LIQ)/(Merrill Lynch & Co., Inc. LOC) |
6,120,000 |
||||
|
5,985,000 |
Wilmington, MA, 4.80% BANs, 6/29/2001 |
5,997,042 |
||||
|
|
|
|||||
|
Total |
789,780,541 |
|||||
|
|
|
|||||
|
Puerto Rico–2.3% |
||||||
|
5,100,000 |
Puerto Rico Highway and Transportation Authority, (Series A) Weekly VRDNs (AMBAC INS)/(Bank of Nova Scotia, Toronto LIQ) |
5,100,000 |
||||
|
5,335,000 |
Puerto Rico Municipal Finance Agency, (PA-638) Weekly VRDNs (FSA INS)/(Merrill Lynch & Co., Inc. LIQ) |
5,335,000 |
||||
|
8,360,000 |
Puerto Rico Municipal Finance Agency, (PA-645) Weekly VRDNs (FSA INS)/(Merrill Lynch & Co., Inc. LIQ) |
8,360,000 |
||||
|
|
|
|||||
|
Total |
18,795,000 |
|||||
|
|
|
|||||
|
Total Investments (at amortized cost)(3) |
$ |
808,575,541 |
||||
|
|
|
|||||
(1) The Fund may only invest in securities rated in one of the two highest short-term rating categories by NRSROs or unrated securities of comparable quality. An NRSRO’s two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor’s, MIG-1, or MIG-2 by Moody’s Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
TIER RATING BASED ON TOTAL MARKET VALUE (UNAUDITED)
| First Tier | Second Tier | |||
| 99.01% | 0.99% | |||
(2) Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the fund’s Board of Trustees. At October 31, 2000, these securities amounted to $27,080,000 which represents 3.3% of net assets.
(3) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($818,605,895) at October 31, 2000.
The following acronyms are used throughout this portfolio:
AMBAC—American Municipal Bond Assurance Corporation
AMT—Alternative Minimum Tax
BANs—Bond Anticipation Notes
CP—Commercial Paper
FGIC—Financial Guaranty Insurance Company
FSA—Financial Security Assurance
HEFA—Health and Education Facilities Authority
HFA—Housing Finance Authority
IFA—Industrial Finance Authority
INS—Insured
LIQ—Liquidity Agreement
LOC—Letter of Credit
MBIA—Municipal Bond Investors Assurance
MERLOTs—Municipal Exempt Receipts-Liquidity Optional Tender Series
PLC—Public Limited Company
PRF—Prerefunded
TOBs—Tender Option Bonds
VRDNs—Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
| October 31, 2000 | |||||||
| Assets: | |||||||
| Total investments in securities, at amortized cost and value | $ | 808,575,541 | |||||
| Cash | 3,816,471 | ||||||
| Income receivable | 7,205,727 | ||||||
| Receivable for shares sold | 121,184 | ||||||
| Other assets | 47,166 | ||||||
|
|
|
||||||
| Total assets | 819,766,089 | ||||||
| Liabilities: | |||||||
| Payable for shares redeemed | $ | 19,690 | |||||
| Income distribution payable | 1,140,504 | ||||||
|
|
|
||||||
| Total liabilities | 1,160,194 | ||||||
|
|
|
||||||
| Net Assets for 818,605,895 shares outstanding | $ | 818,605,895 | |||||
|
|
|
||||||
| Net Asset Value, Offering Price and Redemption Proceeds Per Share: | |||||||
| Institutional Service Shares: | |||||||
| $ 725,795,731 ÷ 725,795,731 shares outstanding | $1.00 | ||||||
|
|
|
||||||
| Galaxy-BKB Shares: | |||||||
| $ 92,810,164 ÷ 92,810,164 shares outstanding | $1.00 | ||||||
|
|
|
||||||
| (See Notes which are an integral part of the Financial Statements) | |||||||
Year Ended October 31, 2000
| Investment Income: | |||||||||||
| Interest | $ | 31,221,452 | |||||||||
| Expenses: | |||||||||||
| Investment adviser fee | $ | 3,886,409 | |||||||||
| Administrative personnel and services fee | 585,353 | ||||||||||
| Custodian fees | 38,123 | ||||||||||
| Transfer and dividend disbursing agent fees and expenses | 56,112 | ||||||||||
| Directors’/Trustees’ fees | 3,934 | ||||||||||
| Auditing fees | 12,093 | ||||||||||
| Legal fees | 14,301 | ||||||||||
| Portfolio accounting fees | 118,643 | ||||||||||
| Shareholder services fee—Institutional Service Shares | 1,443,581 | ||||||||||
| Shareholder services fee—Galaxy-BKB Shares | 499,623 | ||||||||||
| Share registration costs | 36,519 | ||||||||||
| Printing and postage | 29,353 | ||||||||||
| Insurance premiums | 41,457 | ||||||||||
| Miscellaneous | 14,697 | ||||||||||
|
|
|
||||||||||
| Total expenses | 6,780,198 | ||||||||||
| Waivers— | |||||||||||
| Waiver of investment adviser fee | $ | (495,788 | ) | ||||||||
| Waiver of shareholder services fee— | |||||||||||
| Institutional Service Shares | (1,385,838 | ) | |||||||||
| Waiver of shareholder services fee— | |||||||||||
| Galaxy-BKB Shares | (499,623 | ) | |||||||||
|
|
|
||||||||||
| Total waivers | (2,381,249 | ) | |||||||||
|
|
|
||||||||||
| Net expenses | 4,398,949 | ||||||||||
|
|
|
||||||||||
| Net investment income | $ | 26,822,503 | |||||||||
|
|
|
(See Notes which are an integral part of the Financial Statements)
| Year Ended October 31, | ||||||||
| 2000 | 1999 | |||||||
| Increase (Decrease) in Net Assets: | ||||||||
| Operations— | ||||||||
| Net investment income | $ | 26,822,503 | $ | 13,865,946 | ||||
|
|
|
|
|
|
|
|||
| Distributions to Shareholders— | ||||||||
| Distributions from net investment income | ||||||||
| Institutional Service Shares | (20,058,641 | ) | (8,784,162 | ) | ||||
| Galaxy-BKB Shares | (6,763,862 | ) | (5,081,784 | ) | ||||
|
|
|
|
|
|
|
|||
| CHANGE IN NET ASSETS RESULTING FROM | ||||||||
| DISTRIBUTIONS TO SHAREHOLDERS | (26,822,503 | ) | (13,865,946 | ) | ||||
|
|
|
|
|
|
|
|||
| Share Transactions— | ||||||||
| Proceeds from sale of shares | 2,218,359,202 | 1,530,820,679 | ||||||
| Net asset value of shares issued to shareholders in payment of distributions declared | 17,276,382 | 8,213,858 | ||||||
| Cost of shares redeemed | (2,028,180,962 | ) | (1,346,826,355 | ) | ||||
|
|
|
|
|
|
|
|||
| Change in net assets resulting from share transactions | 207,454,622 | 192,208,182 | ||||||
|
|
|
|
|
|
|
|||
| Change in net assets | 207,454,622 | 192,208,182 | ||||||
| Net Assets: | ||||||||
| Beginning of period | 611,151,273 | 418,943,091 | ||||||
|
|
|
|
|
|
|
|||
| End of period | $ | 818,605,895 | $ | 611,151,273 | ||||
|
|
|
|
|
|
|
|||
(See Notes which are an integral part of the Financial Statements)
October 31, 2000
Effective February 1, 2000, Massachusetts Municipal Cash Trust (the “Fund”) became a portfolio of the Money Market Obligations Trust (the “Trust”). The Trust is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder’s interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Service Shares and Galaxy-BKB Shares (formerly, Boston 1784 Shares). The investment objective of the Fund is to provide current income exempt from federal regular income tax and Massachusetts state income tax consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
Investment Valuation
The Fund uses the amortized cost method to value its portfolio securities in
accordance with Rule 2a-7 under the Act.
Investment Income, Expenses and Distributions
Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the “Code”). Dividend income and distributions to shareholders are
recorded on the ex-dividend date. Non-cash dividends included in dividend income,
if any, are recorded at fair value. The Fund offers multiple classes of shares,
which differ in their respective distribution and service fees. All shareholders
bear the common expenses of the Fund based on average daily net assets of each
class, without distinction between share classes. Dividends are declared separately
for each class. No class has preferential dividend rights; differences in per
share dividend rates are generally due to differences in separate class expenses.
Federal Taxes
It is the Fund’s policy to comply with the provisions of the Code applicable
to regulated investment companies and to distribute to shareholders each year
substantially all of its income. Accordingly, no provision for federal tax is
necessary.
At October 31, 2000, the Fund for federal tax purposes had a capital loss carryforward of $5,315, which will reduce taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and this will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire in 2007.
When-Issued and Delayed Delivery Transactions
The Fund may engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintains security positions
such that sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed delivery
basis are marked to market daily and begin earning interest on the settlement
date. Losses may occur on these transactions due to changes in market conditions
or the failure of counterparties to perform under the contract.
Restricted Securities
Restricted securities are securities that may only be resold upon registration
under federal securities laws or in transactions exempt from such registration.
Many restricted securities may be resold in the secondary market in transactions
exempt from registration. In some cases, the restricted securities may be resold
without registration upon exercise of a demand feature. Such restricted securities
may be determined to be liquid under criteria established by the Board of Trustees
(“Trustees”). The Fund will not incur any registration costs upon
such resales. Restricted securities are valued at amortized cost in accordance
with Rule 2a-7 under the Act.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts of assets, liabilities, expenses and revenues reported
in the financial statements. Actual results could differ from those estimated.
Other
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At October 31, 2000, capital paid-in aggregated $818,605,895.
Transactions in shares were as follows:
| Year Ended October 31 | 2000 | 1999 | ||||
| Institutional Service Shares: | ||||||
| Shares sold | 1,963,348,217 | 1,280,366,882 | ||||
| Shares issued to shareholders | ||||||
| in payment of distributions | ||||||
| declared | 10,519,214 | 3,158,407 | ||||
| Shares redeemed | (1,659,363,250 | ) | (1,128,619,379 | ) | ||
|
|
|
|
|
|||
| Net Change Resulting From | ||||||
| Institutional Service Share | ||||||
| Transactions | 314,504,181 | 154,905,910 | ||||
|
|
|
|
|
|||
| Year Ended October 31 | 2000 | 1999 | ||||
| Galaxy-BKB Shares: | ||||||
| Shares sold | 255,010,985 | 250,453,797 | ||||
| Shares issued to shareholders | ||||||
| in payment of distributions | ||||||
| declared | 6,757,168 | 5,055,451 | ||||
| Shares redeemed | (368,817,712 | ) | (218,206,976 | ) | ||
|
|
|
|
|
|||
| Net Change Resulting from | ||||||
| Galaxy-BKB Share | ||||||
| Transactions | (107,049,559 | ) | 37,302,272 | |||
|
|
|
|
|
|||
| Net Change Resulting from | ||||||
| Share Transactions | 207,454,622 | 192,208,182 | ||||
|
|
|
|
|
Investment Adviser Fee
Federated Investment Management Company, the Fund’s investment adviser
(the “Adviser”), receives for its services an annual investment adviser
fee equal to 0.50% of the Fund’s average daily net assets. The Adviser
may voluntarily choose to waive any portion of its fee. The Adviser can modify
or terminated this voluntary waiver at any time at its sole discretion.
Administrative Fee
Federated Services Company (“FServ”), under the Administrative Services
Agreement, provides the Funds with administrative personnel and services. The
fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the
average aggregate daily net assets of all funds advised by subsidiaries of
Federated
Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per
each additional class.
Shareholder Services Fee
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services Company (“FSSC”), the Fund will pay FSSC up to 0.25% of average
daily net assets of the Institutional Service Shares for the period. Under the
terms of a Shareholder Services Agreement with Fleet National Bank, the Fund
will pay Fleet National Bank, up to 0.25% of average daily net assets of Galaxy-BKB
Shares for the period. These fees are used to finance certain services for
shareholders
and to maintain shareholder accounts. FSSC and Fleet National Bank, may voluntarily
choose to waive any portion of their fees. FSSC and Fleet National Bank, can
modify or terminate these voluntary waivers at any time at their sole discretion.
Transfer and Dividend Disbursing Agent Fees and Expenses
FServ, though it’s subsidiary FSSC, serves as transfer and dividend disbursing
agent for the Fund. The fee paid to FSSC is based on the size, type, and number
of accounts and transactions made by shareholders.
Portfolio Accounting Fees
FServ maintains the Fund’s accounting records for which it receives a fee.
The fee is based on the level of the Fund’s average daily net assets for
the period, plus out-of-pocket expenses.
Interfund Transactions
During the period ended October 31, 2000, the Fund engaged in purchase and sale
transactions with funds that have a common investment adviser (or affiliated
investment advisers), common Directors/Trustees, and/or common Officers. These
purchase and sale transactions complied with Rule 17a-7 under the Act and amounted
$1,033,071,000 and $807,486,000, respectively.
General
Certain of the Officers and Trustees of the Trust are Officers and Directors
or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 64.50% of the securities in the portfolio of investments were backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 13.55% of total investments.
TO THE BOARD OF TRUSTEES OF MONEY MARKET OBLIGATIONS TRUST AND SHAREHOLDERS OF MASSACHUSETTS MUNICIPAL CASH TRUST:
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Massachusetts Municipal Cash Trust (one of the portfolios constituting Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Massachusetts Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
/s/Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and Massachusetts state income tax consistent with stability of principal by investing in a portfolio of short-term, high-quality Massachusetts tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 8
How to Redeem Shares 9
Account and Share Information 12
Who Manages the Fund? 13
Financial Information 13
Report of Ernst & Young LLP, Independent Auditors 28
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and Massachusetts state income tax 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.
The Fund invests in short-term, high-quality Massachusetts tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Massachusetts state income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Service Shares total returns on a calendar year-end basis.
The Fund's Institutional Service Shares are sold without a sales charge (load). The total returns displayed above are upon net asset value.
The Fund's Institutional Service Shares total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.61%.
Within the period shown in the chart, the Fund's Institutional Service Shares highest quarterly return was 1.14% (quarter ended March 31, 1991). Its lowest quarterly return was 0.46% (quarter ended March 31, 1993).
The following table represents the Fund's Institutional Service Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.78% |
|
5 Years |
|
3.05% |
|
Start of Performance1 |
|
3.12% |
1 The Fund's Institutional Service Shares start of performance date was May 18, 1990.
The Fund's Institutional Service Shares 7-Day Net Yield as of December 31, 1999 was 3.89%.
You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund's Institutional Service Shares.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waiver)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.50% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee3 |
|
0.25% |
|
Other Expenses |
|
0.11% |
|
Total Annual Fund Operating Expenses |
|
0.86% |
|
1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waivers of Fund Expenses |
|
0.30% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.56% |
|
2 The adviser has voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.44% for the fiscal year ended October 31, 2000. |
||
|
3 The shareholder services fee has been voluntarily waived. This voluntary waiver can be terminated at any time. The shareholder services fee paid by the Fund's Institutional Services Shares (after the voluntary waiver) was 0.01% for the fiscal year ended October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Institutional Service Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's 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 shown above and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
|
Calendar Period |
|
Fund |
|
1 Year |
|
$ 88 |
|
|
||
|
3 Years |
|
$ 274 |
|
|
||
|
5 Years |
|
$ 477 |
|
|
||
|
10 Years |
|
$1,061 |
|
|
||
The Fund invests in a portfolio of high-quality Massachusetts tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Massachusetts state income tax. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal and Massachusetts income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. Fixed income securities pay interest, dividends or distributions at a specified rate. The rate may be a fixed percentage of the principal or adjusted periodically. In addition, the issuer must repay the principal amount of the security, normally within a specified time.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Massachusetts issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Massachusetts, the Fund may be subject to additional risks compared to Funds that invest in multiple states. Massachusetts' economy is relatively diversified across the manufacturing, trade, finance, insurance and real estate and services sectors. Any downturn in these industries may adversely affect the economy of the state.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
The Fund offers two share classes: Institutional Service Shares and Galaxy-BKB 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-BUY-GALAXY (1-877-289-4252) for more information concerning the other class.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Massachusetts taxpayers because it invests in Massachusetts municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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.
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Massachusetts taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance since inception. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 28.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.49 |
% |
|
2.71 |
% |
|
3.04 |
% |
|
3.09 |
% |
|
3.07 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.56 |
% |
|
0.56 |
% |
|
0.55 |
% |
|
0.55 |
% |
|
0.55 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.47 |
% |
|
2.69 |
% |
|
2.98 |
% |
|
3.05 |
% |
|
3.02 |
% |
|
|
|||||||||||||||
|
Expense waiver/reimbursement3 |
|
0.30 |
% |
|
0.34 |
% |
|
0.36 |
% |
|
0.40 |
% |
|
0.42 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$725,796 |
|
|
$411,292 |
|
|
$256,386 |
|
|
$141,869 |
|
|
$119,739 |
|
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--98.8%1 |
|
|
|
|
|
|
|
Massachusetts--96.5% |
|
|
|
|
$ |
23,166,000 |
|
ABN AMRO MuniTOPS Certificates Trust (Massachusetts Non-AMT) (Series 1998-12) Weekly VRDNs (Massachusetts Water Resources Authority)/(MBIA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) |
|
$ |
23,166,000 |
|
|
25,360,000 |
|
ABN AMRO MuniTOPS Certificates Trust (Massachusetts Non-AMT) (Series 2000-2) Weekly VRDNs (Massachusetts Water Resources Authority)/(FGIC INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) |
|
|
25,360,000 |
|
|
5,014,000 |
|
Bedford, MA, 4.25% BANs, 12/4/2000 |
|
|
5,015,307 |
|
|
1,500,000 |
|
Boston, MA Water & Sewer Commission, General Revenue Bonds (Series 1994A) Weekly VRDNs (State Street Bank and Trust Co. LOC) |
|
|
1,500,000 |
|
|
7,995,000 |
|
Bridgewater-Raynham, MA Regional School District, 5.00% BANs, 7/6/2001 |
|
|
8,010,474 |
|
|
2,533,000 |
|
Cambridge, MA, 4.75% Bonds, 11/1/2000 |
|
|
2,533,000 |
|
|
7,496,500 |
|
Canton, MA, 5.25% BANs, 6/8/2001 |
|
|
7,518,826 |
|
|
9,731,000 |
|
Clipper Tax-Exempt Certificates Trust (Massachusetts Non-AMT) (Series 1999-1) Weekly VRDNs (Massachusetts State HFA)/(MBIA INS)/(State Street Bank and Trust Co. LIQ) |
|
|
9,731,000 |
|
|
7,500,000 |
|
Clipper Tax-Exempt Certificates Trust (Massachusetts Non-AMT) (Series 2000-2) Weekly VRDNs (Massachusetts Turnpike Authority)/(MBIA INS)/(State Street Bank and Trust Co. LIQ) |
|
|
7,500,000 |
|
|
54,047,162 |
|
Clipper Tax-Exempt Certificates Trust, (Series A) Weekly VRDNs (Massachusetts State Lottery Commission)/(AMBAC INS)/(State Street Bank and Trust Co. LIQ) |
|
|
54,047,162 |
|
|
3,000,000 |
|
Commonwealth of Massachusetts Weekly VRDNs (AMBAC INS)/(Citibank N.A., New York LIQ) |
|
|
3,000,000 |
|
|
6,062,000 |
|
Dighton-Rehobeth, MA Regional School District, 5.00% BANs, 7/6/2001 |
|
|
6,073,732 |
|
|
8,000,000 |
|
Fall River, MA, 5.25% BANs, 6/1/2001 |
|
|
8,015,510 |
|
|
2,900,000 |
|
Freetown-Lakeville, MA Regional School District, 4.75% BANs, 9/28/2001 |
|
|
2,909,573 |
|
|
6,630,000 |
|
Gardner, MA, 4.70% BANs, 4/6/2001 |
|
|
6,638,133 |
|
|
10,000,000 |
|
Marshfield, MA, 5.00% BANs, 6/20/2001 |
|
|
10,042,958 |
|
|
3,325,000 |
|
Mashpee, MA, 4.30% BANs, 12/1/2000 |
|
|
3,325,000 |
|
|
33,485,000 |
|
Massachusetts Bay Transportation Authority, (Series 1999) Weekly VRDNs (Commerzbank AG, Frankfurt LIQ) |
|
|
33,485,000 |
|
|
15,000,000 |
|
Massachusetts Bay Transportation Authority, MERLOTS (Series 2000H) Weekly VRDNs (FGIC INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
15,000,000 |
|
|
7,700,000 |
2 |
Massachusetts Bay Transportation Authority, PT-1218, 4.20% TOBs (FGIC INS)/(Merrill Lynch & Co., Inc. LIQ), Optional Tender 1/18/2001 |
|
|
7,700,000 |
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Massachusetts--continued |
|
|
|
|
$ |
3,000,000 |
|
Massachusetts Development Finance Agency, (Series 1998A) Weekly VRDNs (Shady Hill School)/(State Street Bank and Trust Co. LOC) |
|
$ |
3,000,000 |
|
|
7,420,000 |
|
Massachusetts Development Finance Agency, (Series 1999) Weekly VRDNs (Dean College)/(Fleet National Bank, Springfield, MA LOC) |
|
|
7,420,000 |
|
|
9,000,000 |
|
Massachusetts Development Finance Agency, (Series 2000) Weekly VRDNs (Draper Laboratory)/(MBIA INS)/(Morgan Guaranty Trust Co., New York LIQ) |
|
|
9,000,000 |
|
|
4,000,000 |
|
Massachusetts Development Finance Agency, (Series 2000) Weekly VRDNs (Marine Biological Laboratory)/(Allied Irish Banks PLC LOC) |
|
|
4,000,000 |
|
|
10,000,000 |
|
Massachusetts Development Finance Agency, (Series 2000) Weekly VRDNs (Wentworth Institute of Technology, Inc.)/(AMBAC INS)/(State Street Bank and Trust Co. LIQ) |
|
|
10,000,000 |
|
|
3,500,000 |
|
Massachusetts Development Finance Agency, (Series 2000) Weekly VRDNs (Worcester Academy)/(Allied Irish Banks PLC LOC) |
|
|
3,500,000 |
|
|
9,955,000 |
|
Massachusetts Development Finance Agency, (Series B) Weekly VRDNs (Edgewood Retirement Community Project)/(Fleet National Bank, Springfield, MA LOC) |
|
|
9,955,000 |
|
|
4,178,000 |
|
Massachusetts HEFA, Weekly VRDNs (Harvard University) |
|
|
4,178,000 |
|
|
11,000,000 |
|
Massachusetts HEFA, Weekly VRDNs (Harvard University) |
|
|
11,000,000 |
|
|
27,700,000 |
|
Massachusetts HEFA, (Series 1985H) Weekly VRDNs (Boston University)/(State Street Bank and Trust Co. LOC) |
|
|
27,700,000 |
|
|
1,740,000 |
|
Massachusetts HEFA, (Series 1999) Weekly VRDNs (CIL Reality of Massachusetts)/(Dexia Public Finance Bank S.A. LOC) |
|
|
1,740,000 |
|
|
15,100,000 |
|
Massachusetts HEFA, (Series A) Weekly VRDNs (Brigham & Women's Hospital)/(Landesbank Hessen-Thueringen, Frankfurt LOC) |
|
|
15,100,000 |
|
|
8,000,000 |
|
Massachusetts HEFA, (Series A) Weekly VRDNs (University of Massachusetts)/(Dexia Public Finance Bank S.A. LOC) |
|
|
8,000,000 |
|
|
5,000,000 |
|
Massachusetts HEFA, (Series A), 10.25% Bonds (Fairview Extended Care Services, Inc.)/(United States Treasury PRF), 1/1/2001 (@103) |
|
|
5,197,943 |
|
|
1,500,000 |
|
Massachusetts HEFA, (Series B) Weekly VRDNs (Clark University)/(Fleet Bank N.A. LOC) |
|
|
1,500,000 |
|
|
8,940,000 |
|
Massachusetts HEFA, (Series B) Weekly VRDNs (Endicott College)/(BankBoston, N.A. LOC) |
|
|
8,940,000 |
|
|
23,320,000 |
|
Massachusetts HEFA, (Series B) Weekly VRDNs (Hallmark Health System)/(FSA INS)/(Fleet National Bank, Springfield, MA LIQ) |
|
|
23,320,000 |
|
|
13,600,000 |
|
Massachusetts HEFA, (Series F) Weekly VRDNs (Children's Hospital of Boston)/(Landesbank Hessen-Thueringen, Frankfurt LIQ) |
|
|
13,600,000 |
|
|
17,070,000 |
|
Massachusetts HEFA, (Series I) Weekly VRDNs (Harvard University) |
|
|
17,070,000 |
|
|
5,700,000 |
|
Massachusetts HEFA, (Series R) Weekly VRDNs (Harvard University) |
|
|
5,700,000 |
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Massachusetts--continued |
|
|
|
|
$ |
6,200,000 |
|
Massachusetts HEFA, MERLOTS (Series 2000-T) Weekly VRDNs (Simmons College)/(AMBAC INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
$ |
6,200,000 |
|
|
18,500,000 |
|
Massachusetts HEFA, MERLOTS (Series 2000WW) Weekly VRDNs (Harvard University)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
18,500,000 |
|
|
1,800,000 |
|
Massachusetts IFA, (Series 1992) Weekly VRDNs (Holyoke Water Power Co.)/(Canadian Imperial Bank of Commerce LOC) |
|
|
1,800,000 |
|
|
14,250,000 |
|
Massachusetts IFA, (Series 1992B), 4.15% CP (New England Power Co.), Mandatory Tender 12/6/2000 |
|
|
14,250,000 |
|
|
10,000,000 |
|
Massachusetts IFA, (Series 1992B), 4.25% CP (New England Power Co.), Mandatory Tender 1/17/2001 |
|
|
10,000,000 |
|
|
10,000,000 |
|
Massachusetts IFA, (Series 1992B), 4.30% CP (New England Power Co.), Mandatory Tender 1/16/2001 |
|
|
10,000,000 |
|
|
5,900,000 |
|
Massachusetts IFA, (Series 1994) Weekly VRDNs (Nova Realty Trust)/(Fleet National Bank, Springfield, MA LOC) |
|
|
5,900,000 |
|
|
7,740,000 |
|
Massachusetts IFA, (Series 1995) Weekly VRDNs (Goddard House)/(Fleet Bank N.A. LOC) |
|
|
7,740,000 |
|
|
7,200,000 |
|
Massachusetts IFA, (Series 1995) Weekly VRDNs (Whitehead Institute for Biomedical Research) |
|
|
7,200,000 |
|
|
7,184,000 |
|
Massachusetts IFA, (Series 1996) Weekly VRDNs (Newbury College)/(BankBoston, N.A. LOC) |
|
|
7,184,000 |
|
|
2,675,000 |
|
Massachusetts IFA, (Series 1997) Weekly VRDNs (Massachusetts Society for the Prevention of Cruelty to Animals)/(Fleet National Bank, Springfield, MA LOC) |
|
|
2,675,000 |
|
|
5,760,000 |
|
Massachusetts IFA, (Series 1997) Weekly VRDNs (Mount Ida College)/(Dexia Public Finance Bank S.A. LOC) |
|
|
5,760,000 |
|
|
5,965,000 |
|
Massachusetts IFA, (Series 1998A) Weekly VRDNs (JHC Assisted Living Corp.)/(Fleet National Bank, Springfield, MA LOC) |
|
|
5,965,000 |
|
|
1,125,000 |
|
Massachusetts IFA, (Series A) Weekly VRDNs (Hockomock YMCA)/(Bank of Nova Scotia, Toronto LOC) |
|
|
1,125,000 |
|
|
9,600,000 |
|
Massachusetts IFA, (Series B) Weekly VRDNs (Williston North Hampton School)/(Fleet National Bank, Springfield, MA LOC) |
|
|
9,600,000 |
|
|
2,700,000 |
|
Massachusetts IFA, 5.00% Bonds (Museum of Fine Arts, Boston)/(MBIA INS), 1/1/2001 |
|
|
2,704,276 |
|
|
10,625,000 |
|
Massachusetts Municipal Wholesale Electric Co., Trust Receipts (Series 2000 FR/RI- L3) Weekly VRDNs (Lehman Brothers, Inc. LIQ)/(MBIA LOC) |
|
|
10,625,000 |
|
|
10,000,000 |
|
Massachusetts State HFA, MERLOTS (Series 1999H) Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
10,000,000 |
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Massachusetts--continued |
|
|
|
|
$ |
9,290,000 |
2 |
Massachusetts State HFA, (PT-162) 4.20% TOBs (MBIA INS)/(BNP Paribas LIQ), Optional Tender 1/25/2001 |
|
$ |
9,290,000 |
|
|
4,835,000 |
|
Massachusetts State, (PA-647) Weekly VRDNs (Merrill Lynch & Co., Inc. LIQ) |
|
|
4,835,000 |
|
|
3,255,000 |
|
Massachusetts State, (Series 1999 SG 126) Weekly VRDNs (Societe Generale, Paris LIQ) |
|
|
3,255,000 |
|
|
27,545,000 |
|
Massachusetts Turnpike Authority, Variable Rate Certificates (Series 1997N) Weekly VRDNs (MBIA INS)/(Bank of America, N.A. LIQ) |
|
|
27,545,000 |
|
|
10,090,000 |
2 |
Massachusetts Water Pollution Abatement Trust Pool, (PT-1185) 4.40% TOBs (Merrill Lynch & Co., Inc. LIQ), Optional Tender 9/13/2001 |
|
|
10,090,000 |
|
|
11,300,000 |
|
Massachusetts Water Pollution Abatement Trust Pool, SGA (Series 87) Daily VRDNs (Societe Generale, Paris LIQ) |
|
|
11,300,000 |
|
|
16,500,000 |
|
Massachusetts Water Pollution Abatement Trust Pool, Subordinate, MERLOTS (Series 1999N) Weekly VRDNs (First Union National Bank, Charlotte, N.C. LIQ) |
|
|
16,500,000 |
|
|
9,000,000 |
|
Massachusetts Water Resources Authority, (Series 1994), 4.30% CP (Morgan Guaranty Trust Co., New York LOC), Mandatory Tender 1/19/2001 |
|
|
9,000,000 |
|
|
8,000,000 |
|
Massachusetts Water Resources Authority, (Series 1994), 4.35% CP (Morgan Guaranty Trust Co., New York LOC), Mandatory Tender 12/21/2000 |
|
|
8,000,000 |
|
|
20,050,000 |
|
Massachusetts Water Resources Authority, (Series 1998D) Weekly VRDNs (FGIC INS)/(FGIC Securities Purchase, Inc. LIQ) |
|
|
20,050,000 |
|
|
14,200,000 |
|
Massachusetts Water Resources Authority, (Series 2000B) Weekly VRDNs (FGIC INS)/(FGIC Securities Purchase, Inc. LIQ) |
|
|
14,200,000 |
|
|
19,500,000 |
|
Monson, MA, 5.00% BANs, 8/9/2001 |
|
|
19,571,701 |
|
|
3,000,000 |
|
New Bedford, MA, 5.50% BANs (Fleet National Bank, Springfield, MA LOC), 12/1/2000 |
|
|
3,001,800 |
|
|
3,679,000 |
|
North Andover, MA, 5.00% BANs, 6/21/2001 |
|
|
3,684,121 |
|
|
2,000,000 |
|
Oxford, MA, 4.75% BANs, 1/18/2001 |
|
|
2,001,233 |
|
|
10,000,000 |
|
Plainville, MA, 4.25% BANs, 12/15/2000 |
|
|
10,002,881 |
|
|
9,500,000 |
|
Springfield, MA, 4.75% BANs (Fleet National Bank, Springfield, MA LOC), 1/12/2001 |
|
|
9,508,983 |
|
|
3,390,000 |
|
Springfield, MA, 5.00% BANs (Fleet National Bank, Springfield, MA LOC), 6/22/2001 |
|
|
3,400,351 |
|
|
20,000,000 |
|
Sudbury, MA, 4.75% BANs, 12/29/2000 |
|
|
20,017,151 |
|
|
4,688,700 |
|
Watertown, MA, 4.25% BANs, 11/16/2000 |
|
|
4,689,384 |
|
|
6,120,000 |
|
Weymouth, MA Housing Authority, PT 1062, Weekly VRDNs (Queen Ann Apartments)/(Merrill Lynch & Co., Inc. LIQ)/(Merrill Lynch & Co., Inc. LOC) |
|
|
6,120,000 |
|
|
5,985,000 |
|
Wilmington, MA, 4.80% BANs, 6/29/2001 |
|
|
5,997,042 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
789,780,541 |
|
|
||||||
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Puerto Rico--2.3% |
|
|
|
|
$ |
5,100,000 |
|
Puerto Rico Highway and Transportation Authority, (Series A) Weekly VRDNs (AMBAC INS)/(Bank of Nova Scotia, Toronto LIQ) |
|
$ |
5,100,000 |
|
|
5,335,000 |
|
Puerto Rico Municipal Finance Agency, (PA-638) Weekly VRDNs (FSA INS)/(Merrill Lynch & Co., Inc. LIQ) |
|
|
5,335,000 |
|
|
8,360,000 |
|
Puerto Rico Municipal Finance Agency, (PA-645) Weekly VRDNs (FSA INS)/(Merrill Lynch & Co., Inc. LIQ) |
|
|
8,360,000 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
18,795,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
|
$ |
808,575,541 |
|
|
||||||
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by NRSROs or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
99.01% |
|
0.99% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $27,080,000 which represents 3.3% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($818,605,895) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
AMT |
--Alternative Minimum Tax |
|
BANs |
--Bond Anticipation Notes |
|
CP |
--Commercial Paper |
|
FGIC |
--Financial Guaranty Insurance Company |
|
FSA |
--Financial Security Assurance |
|
HEFA |
--Health and Education Facilities Authority |
|
HFA |
--Housing Finance Authority |
|
IFA |
--Industrial Finance Authority |
|
INS |
--Insured |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
PLC |
--Public Limited Company |
|
PRF |
--Prerefunded |
|
TOBs |
--Tender Option Bonds |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
|
$ |
808,575,541 |
|
Cash |
|
|
|
|
|
|
3,816,471 |
|
Income receivable |
|
|
|
|
|
|
7,205,727 |
|
Receivable for shares sold |
|
|
|
|
|
|
121,184 |
|
Other assets |
|
|
|
|
|
|
47,166 |
|
|
|||||||
|
TOTAL ASSETS |
|
|
|
|
|
|
819,766,089 |
|
|
|||||||
|
Liabilities: |
|
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
19,690 |
|
|
|
|
|
Income distribution payable |
|
|
1,140,504 |
|
|
|
|
|
|
|||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
|
1,160,194 |
|
|
|||||||
|
Net assets for 818,605,895 shares outstanding |
|
|
|
|
|
|
$818,605,895 |
|
|
|||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
|
$725,795,731 ÷ 725,795,731 shares outstanding |
|
|
|
|
|
|
$1.00 |
|
|
|||||||
|
Galaxy-BKB Shares: |
|
|
|
|
|
|
|
|
$92,810,164 ÷ 92,810,164 shares outstanding |
|
|
|
|
|
|
$1.00 |
|
|
|||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
31,221,452 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
3,886,409 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
585,353 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
38,123 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
56,112 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
3,934 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
12,093 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
14,301 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
118,643 |
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
1,443,581 |
|
|
|
|
|
Shareholder services fee--Galaxy-BKB Shares |
|
|
|
|
|
|
499,623 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
36,519 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
29,353 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
41,457 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
14,697 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
6,780,198 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(495,788 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(1,385,838 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Galaxy-BKB Shares |
|
|
(499,623 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(2,381,249 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
4,398,949 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
$26,822,503 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
26,822,503 |
|
|
$ |
13,865,946 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Service Shares |
|
|
(20,058,641 |
) |
|
|
(8,784,162 |
) |
|
Galaxy-BKB Shares |
|
|
(6,763,862 |
) |
|
|
(5,081,784 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(26,822,503 |
) |
|
|
(13,865,946 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
2,218,359,202 |
|
|
|
1,530,820,679 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
17,276,382 |
|
|
|
8,213,858 |
|
|
Cost of shares redeemed |
|
|
(2,028,180,962 |
) |
|
|
(1,346,826,355 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
207,454,622 |
|
|
|
192,208,182 |
|
|
|
||||||||
|
Change in net assets |
|
|
207,454,622 |
|
|
|
192,208,182 |
|
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
611,151,273 |
|
|
|
418,943,091 |
|
|
|
||||||||
|
End of period |
|
$ |
818,605,895 |
|
|
$ |
611,151,273 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Effective February 1, 2000, Massachusetts Municipal Cash Trust (the "Fund") became a portfolio of the Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Service Shares and Galaxy-BKB Shares (formerly, Boston 1784 Funds Shares). The investment objective of the Fund is to provide current income exempt from federal regular income tax and Massachusetts state income tax consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
At October 31, 2000, the Fund for federal tax purposes, had a capital loss carryforward of $5,315, which will reduce taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and this will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire in 2007.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees ("Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At October 31, 2000, capital paid-in aggregated $818,605,895.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
|
1999 |
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
|
Shares sold |
|
1,963,348,217 |
|
|
|
1,280,366,882 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
10,519,214 |
|
|
|
3,158,407 |
|
|
Shares redeemed |
|
(1,659,363,250 |
) |
|
|
(1,128,619,379 |
) |
|
|
|||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
314,504,181 |
|
|
|
154,905,910 |
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
|
1999 |
|
|
Galaxy-BKB Shares: |
|
|
|
|
|
|
|
|
Shares sold |
|
255,010,985 |
|
|
|
250,453,797 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
6,757,168 |
|
|
|
5,055,451 |
|
|
Shares redeemed |
|
(368,817,712 |
) |
|
|
(218,206,976 |
) |
|
|
|||||||
|
NET CHANGE RESULTING FROM GALAXY-BKB SHARE TRANSACTIONS |
|
(107,049,559 |
) |
|
|
37,302,272 |
|
|
|
|||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
207,454,622 |
|
|
|
192,208,182 |
|
|
|
|||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminated this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Funds with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Institutional Service Shares for the period. Under the terms of a Shareholder Services Agreement with Fleet National Bank, the Fund will pay Fleet National Bank, up to 0.25% of average daily net assets of Galaxy-BKB Shares for the period. These fees are used to finance certain services for shareholders and to maintain shareholder accounts. FSSC and Fleet National Bank, may voluntarily choose to waive any portion of their fees. FSSC and Fleet National Bank, can modify or terminate these voluntary waivers at any time at their sole discretion.
FServ, though it's subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted $1,033,071,000 and $807,486,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 64.50% of the securities in the portfolio of investments were backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 13.55% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Massachusetts Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Massachusetts Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000 is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as they become available. To obtain the SAI, the Semi-Annual Report and other information without charge, and make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Massachusetts Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N518
0032603A-ISS (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and the personal income taxes imposed by the State of Maryland and Maryland municipalities consistent with stability of principal and liquidity by investing in a portfolio of short-term, high-quality Maryland tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 8
How to Purchase Shares 8
How to Redeem Shares 10
Account and Share Information 13
Who Manages the Fund? 14
Financial Information 14
Report of Ernst & Young LLP, Independent Auditors 25
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is current income exempt from federal regular income taxes and the personal income tax imposed by the State of Maryland and Maryland municipalities 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.
The Fund invests in short-term, high-quality Maryland tax exempt securities. The Fund will invest so that at least 80% of its annual interest income is exempt from federal regular income tax and Maryland state and local income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's total returns on a calendar year-end basis.
The Fund's Shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.64%.
Within the period shown in the Chart, the Fund's highest quarterly return was 0.89% (quarter ended June 30, 1995). Its lowest quarterly return was 0.60% (quarter ended March 31, 1999).
The following table represents the Fund's Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
1 Year |
|
2.76% |
|
5 Years |
|
3.06% |
|
Start of Performance1 |
|
3.04% |
1 The Fund's start of performance date was May 9, 1994.
The Fund's 7-Day Net Yield as of December 31, 1999 was 3.78%. You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers and Reimbursements)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.50% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee3 |
|
0.25% |
|
Other Expenses |
|
0.46% |
|
Total Annual Fund Operating Expenses |
|
1.21% |
|
1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waivers of Fund Expenses |
|
0.51% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.70% |
|
2 The adviser has voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.00% for the fiscal year ended October 31, 2000. |
||
|
3 The shareholder services provider has voluntarily waived a portion of the shareholder services fee. The shareholder services provider can terminate this voluntary reduction at any time. The shareholder services fee paid by the Fund (after the voluntary reduction) was 0.24% for the fiscal year ended October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. Expenses assuming no redemption are also shown. The Example also assumes that your investment has a 5% return each year and that the Fund's Shares operating expenses are before waivers and reimbursements as shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
$ |
123 |
|
|
||
|
3 Years |
$ |
384 |
|
|
||
|
5 Years |
$ |
665 |
|
|
||
|
10 Years |
$ |
1,466 |
|
|
||
The Fund invests in a portfolio of high-quality Maryland tax exempt securities maturing in 397 days or less. The Fund will invest so that at least 80% of its annual interest income is exempt from federal regular income tax and Maryland state and local income tax. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal and Maryland income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Maryland issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Maryland, the Fund may be subject to additional risks compared to funds that invest in multiple states. Maryland's economy is relatively diversified across the services, trade and government sectors. The high proportion of federal government jobs, which contributes to high wealth levels, made the state vulnerable to the recession and concurrent federal downsizing in the early 1990s; however, Maryland's economic growth rate has improved and is nearing the national average.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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.
When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. 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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Maryland taxpayers because it invests in Maryland municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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).
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Maryland taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years, or since inception, if the life of the Fund is shorter. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 25.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.52 |
% |
|
2.69 |
% |
|
3.05 |
% |
|
3.10 |
% |
|
3.11 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.70 |
% |
|
0.70 |
% |
|
0.70 |
% |
|
0.69 |
% |
|
0.65 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.50 |
% |
|
2.66 |
% |
|
3.00 |
% |
|
3.05 |
% |
|
3.09 |
% |
|
|
|||||||||||||||
|
Expense waiver/reimbursement3 |
|
0.51 |
% |
|
0.50 |
% |
|
0.51 |
% |
|
0.63 |
% |
|
0.65 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$68,610 |
|
|
$46,707 |
|
|
$66,136 |
|
|
$45,575 |
|
|
$54,286 |
|
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--97.4%1 |
|
|
|
|
|
|
|
Maryland--97.4% |
|
|
|
|
$ |
1,975,000 |
|
Anne Arundel County, MD, EDRBs, (Series 1996) Weekly VRDNs (Atlas Container Corp. Project)/(Mellon Bank N.A., Pittsburgh LOC) |
|
$ |
1,975,000 |
|
|
2,025,000 |
|
Anne Arundel County, MD, 4.50% TOBs (Baltimore Gas & Electric Co.), Optional Tender 7/1/2001 |
|
|
2,025,000 |
|
|
1,975,000 |
|
Baltimore County, MD, IDA, (Series 1994A) Weekly VRDNs (Pitts Realty Limited Partnership)/(PNC Bank, Delaware LOC) |
|
|
1,975,000 |
|
|
2,100,000 |
|
Baltimore County, MD, Port Facility Monthly VRDNs (Occidental Petroleum Corp.)/(Morgan Guaranty Trust Co., New York LOC) |
|
|
2,100,000 |
|
|
1,350,000 |
|
Baltimore County, MD, Revenue Bonds, (1994 Issue) Weekly VRDNs (Direct Marketing Associates, Inc. Facility)/(Allfirst LOC) |
|
|
1,350,000 |
|
|
2,730,000 |
|
Baltimore, MD, EDA, (Series 1985) Weekly VRDNs (Mt. Washington Hospital, Inc.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
2,730,000 |
|
|
900,000 |
|
Carroll County, MD, Variable Rate Economic Development Refunding Revenue Bonds (Series 1995B) Weekly VRDNs (Evapco, Inc. Project)/(Bank of America, N.A. LOC) |
|
|
900,000 |
|
|
2,500,000 |
|
Frederick County, MD, (Series 1997E) Weekly VRDNs (Buckinghams Choice, Inc.)/(LaSalle National Bank, Chicago LOC) |
|
|
2,500,000 |
|
|
500,000 |
|
Frederick County, MD, Revenue Bonds (Series 1995) Weekly VRDNs (Sheppard Pratt Residential Treatment Facility)/(Societe Generale, Paris LOC) |
|
|
500,000 |
|
|
2,005,000 |
|
Harford County, MD, EDRB (Series 1996) Weekly VRDNs (Citrus and Allied Essences Ltd.)/(Allfirst LOC) |
|
|
2,005,000 |
|
|
1,500,000 |
|
Maryland EDC, (Series 1996) Weekly VRDNs (Atlantic Pharmaceutical Services, Inc.)/(Allfirst LOC) |
|
|
1,500,000 |
|
|
1,750,000 |
|
Maryland EDC, Tax Exempt Adjustable Mode IDRBs, (Series 1998) Weekly VRDNs (Morrison Health Care, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
1,750,000 |
|
|
2,500,000 |
|
Maryland EDC, (Series 2000) Weekly VRDNs (AFCO Cargo BWI II LLC)/(SunTrust Bank LOC) |
|
|
2,500,000 |
|
|
2,400,000 |
|
Maryland EDC, (Series 2000) Weekly VRDNs (Hunter Douglas Northeast, Inc.)/(SunTrust Bank LOC) |
|
|
2,400,000 |
|
|
1,115,000 |
|
Maryland Health & Higher Educational Facilities Authority, (Series 1998) Weekly VRDNs (Woodbourne Foundation, Inc.)/(Allfirst LOC) |
|
|
1,115,000 |
|
|
2,100,000 |
|
Maryland Health & Higher Educational Facilities Authority, Pooled Loan Program Revenue Notes, 4.30% CP (Johns Hopkins University)/(Bank of America, N.A. LIQ), Mandatory Tender 3/8/2001 |
|
|
2,100,000 |
|
|
1,000,000 |
|
Maryland Health & Higher Educational Facilities Authority, (Series 1997) Weekly VRDNs (Augsburg Lutheran Home of MD, Inc.)/(Allfirst LOC) |
|
|
1,000,000 |
|
|
1,890,000 |
|
Maryland State Community Development Administration, (Series 1990A) Weekly VRDNs (College Estates)/(Allfirst LOC) |
|
|
1,890,000 |
|
|
2,000,000 |
|
Maryland State Community Development Administration, (Series 1990B) Weekly VRDNs (Cherry Hill Apartment Ltd.)/(Bank of America, N.A. LOC) |
|
|
2,000,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Maryland--continued |
|
|
|
|
$ |
5,000,000 |
|
Maryland State Community Development Administration, MERLOTS (Series 2000-III) Weekly VRDNs (First Union National Bank, Charlotte, NC LIQ) |
|
$ |
5,000,000 |
|
|
2,465,000 |
2 |
Maryland State Community Development Administration, PT-123, 4.35% TOBs (Commerzbank AG, Frankfurt LIQ), Optional Tender 10/4/2001 |
|
|
2,465,000 |
|
|
3,000,000 |
|
Maryland State Energy Financing Administration, (Series 1988) Weekly VRDNs (Morningstar Foods, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
3,000,000 |
|
|
2,125,000 |
|
Maryland State Energy Financing Administration, Limited ObligationVariable Rate Demand Revenue Bonds, (Series 1996) Weekly VRDNs (Keywell L.L.C.)/(Bank of America, N.A. LOC) |
|
|
2,125,000 |
|
|
2,700,000 |
|
Maryland State IDFA, Economic Development Revenue Refunding Bonds, (Series 1994) Weekly VRDNs (Johnson Controls, Inc.) |
|
|
2,700,000 |
|
|
1,000,000 |
|
Maryland State IDFA, Limited Obligation EDRBs, (Series 1994) Weekly VRDNs (Rock-Tenn Converting Co.)/(SunTrust Bank LOC) |
|
|
1,000,000 |
|
|
4,375,000 |
|
Maryland State IDFA, (Series 1999), 4.70% TOBs (Signature Flight Support Corp.)/(Bayerische Landesbank Girozentrale LOC), Optional Tender 12/1/2000 |
|
|
4,375,000 |
|
|
870,000 |
|
Montgomery County, MD, Weekly VRDNs (Information Systems and Networks Corp.)/(PNC Bank, N.A. LOC) |
|
|
870,000 |
|
|
2,400,000 |
|
Montgomery County, MD, EDR Weekly VRDNs (U.S. Pharmacopeial Convention Facility)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
2,400,000 |
|
|
2,335,000 |
|
Queen Annes County, MD, EDR, (Series 1994), 4.75% TOBs (Safeway, Inc.)/(Bankers Trust Co., New York LOC), Mandatory Tender 12/1/2000 |
|
|
2,335,000 |
|
|
6,260,000 |
|
Wicomico County, MD, EDRB (Series 1994) Weekly VRDNs (Field Container Co. L.P.)/(Northern Trust Co., Chicago, IL LOC) |
|
|
6,260,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
|
$ |
66,845,000 |
|
|
||||||
Securities that are subject to alternate minimum tax represents 64.1% of the portfolio as calculated based on total market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security. At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Percentage Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
100.0% |
|
0.0% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $2,465,000, which represents 3.6% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($68,609,666) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
CP |
--Commercial Paper |
|
EDA |
--Economic Development Authority |
|
EDC |
--Economic Development Corporation |
|
EDR |
--Economic Development Revenue |
|
EDRB(s) |
--Economic Development Revenue Bond(s) |
|
IDA |
--Industrial Development Authority |
|
IDFA |
--Industrial Development Finance Authority |
|
IDRBs |
--Industrial Development Revenue Bonds |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
TOBs |
--Tender Option Bonds |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
66,845,000 |
|
Cash |
|
|
|
|
|
1,471,301 |
|
Income receivable |
|
|
|
|
|
404,298 |
|
Receivable for shares sold |
|
|
|
|
|
29,081 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
68,749,680 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
81,901 |
|
|
|
|
Income distribution payable |
|
|
39,409 |
|
|
|
|
Accrued expenses |
|
|
18,704 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
140,014 |
|
|
||||||
|
Net assets for 68,609,666 shares outstanding |
|
|
|
|
$ |
68,609,666 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share: |
|
|
|
|
|
|
|
$68,609,666 ÷ 68,609,666 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
2,203,682 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
261,907 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
125,000 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
3,230 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
19,909 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
1,065 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,809 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
6,706 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
37,073 |
|
|
|
|
|
Shareholder services fee |
|
|
|
|
|
|
130,954 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
18,629 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
16,962 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
3,438 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
704 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
637,386 |
|
|
|
|
|
|
|||||||||||
|
Waivers and Reimbursement: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(261,907 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee |
|
|
(5,238 |
) |
|
|
|
|
|
|
|
|
Reimbursement of other operating expenses |
|
|
(1,266 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS AND REIMBURSEMENT |
|
|
|
|
|
|
(268,411 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
368,975 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
1,834,707 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
1,834,707 |
|
|
$ |
1,577,891 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
(1,834,707 |
) |
|
|
(1,577,891 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
193,517,974 |
|
|
|
192,137,306 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
1,414,842 |
|
|
|
1,216,922 |
|
|
Cost of shares redeemed |
|
|
(173,030,407 |
) |
|
|
(212,783,291 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
21,902,409 |
|
|
|
(19,429,063 |
) |
|
|
||||||||
|
Change in net assets |
|
|
21,902,409 |
|
|
|
(19,429,063 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
46,707,257 |
|
|
|
66,136,320 |
|
|
|
||||||||
|
End of period |
|
$ |
68,609,666 |
|
|
$ |
46,707,257 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Effective February 1, 2000, Maryland Municipal Cash Trust (the "Fund") became a portfolio of the Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is current income exempt from federal regular income tax and the personal income taxes imposed by the State of Maryland and Maryland municipalities consistent with stability of principal and liquidity.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
At October 31, 2000, the Fund for federal tax purposes, had a capital loss carryforward of $1,519, which will reduce taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and this will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire in 2007.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees (the "Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Shares sold |
|
193,517,974 |
|
|
192,137,306 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
1,414,842 |
|
|
1,216,922 |
|
|
Shares redeemed |
|
(173,030,407 |
) |
|
(212,783,291 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
21,902,409 |
|
|
(19,429,063 |
) |
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment Adviser fee equal to 0.50% of the Trust's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee and/or reimburse certain operating expenses of the Fund. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions compiled with Rule 17a-7 under the Act and amounted to $136,285,000 and $126,805,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 78.6% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 13.3% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Maryland Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The financial highlights for each of the three years in the period ended October 31, 1998, were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Maryland Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000 is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as it becomes available. To obtain the SAI, the Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Maryland Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N286
G00105-01-A (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
[Graphic Representation Omitted--See Appendix]
A Portfolio of Money Market Obligations Trust
A money market mutual fund seeking to provide current income exempt from federal regular income tax and the personal income tax imposed by the State of Michigan consistent with stability of principal and liquidity by investing in a portfolio of short-term, high-quality Michigan tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
| Risk/Return Summary | 1 | |
| What are the Fund's Fees and Expenses? | 3 | |
| What are the Fund's Investment Strategies? | 4 | |
| What are the Principal Securities in Which the Fund Invests? | 5 | |
| What are the Specific Risks of Investing in the Fund? | 6 | |
| What do Shares Cost? | 7 | |
| How is the Fund Sold? | 7 | |
| How to Purchase Shares | 7 | |
| How to Redeem Shares | 9 | |
| Account and Share Information | 11 | |
| Who Manages the Fund? | 12 | |
| Financial Information | 12 |
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and the personal income tax imposed by the State of Michigan 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.
The Fund invests in short-term, high-quality Michigan tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Michigan state income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
[Graphic Representation Omitted--See Appendix]
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Shares total returns on a calendar year-end basis.
1 The Fund's Institutional Shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's Institutional Shares total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.88%.
Within the period shown in the Chart, the Fund's Institutional Shares highest quarterly return was 0.90% (quarter ended June 30, 1997). Its lowest quarterly return was 0.68% (quarter ended March 31, 1999).
The following table represents the Fund's Institutional Shares Average Annual Total Returns, for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
3.07% | |
| Start of Performance1 | 3.29% |
The Fund's Institutional Shares start of performance date was March 4, 1996.
The Fund's Institutional Shares 7-Day Net Yield as of December 31, 1999 was 4.22%.
You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund's Institutional Shares.
| Shareholder Fees | ||
| Fees Paid Directly From Your Investment | ||
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | None | |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
None |
|
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) |
None | |
| Redemption Fee (as a percentage of amount redeemed, if applicable) |
None |
|
|
Exchange Fee |
None |
|
|
Annual Fund Operating Expenses (Before Waiver)1 |
||
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
||
|
Management Fee2 |
0.50% |
|
|
Distribution (12b-1) Fee |
None |
|
|
Shareholder Services Fee3 |
0.25% |
|
|
Other Expenses |
0.22% |
|
|
Total Annual Fund Operating Expenses |
0.97% |
|
|
1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waivers of Fund Expenses |
0.57% |
|
|
Total Actual Annual Fund Operating Expenses (after waivers) |
0.40% |
|
|
2 The adviser voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.18% for the fiscal year ended October 31, 2000. |
||
|
3 The shareholder services fee has been voluntarily waived. This voluntary waiver can be terminated at any time. The shareholder services fee paid by the Fund's Institutional Shares (after the voluntary waiver) was 0.00% for the fiscal year ended October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses are before waivers as shown above and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
| Calendar Period | Fund | |
|
1 Year |
$ 99 | |
|
3 Years |
$ 309 |
|
| 5 Years | $ 536 | |
| 10 Years | $1,190 |
The Fund invests in a portfolio of high-quality Michigan tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Michigan state income tax. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected US economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal and Michigan income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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. Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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.
When the Fund receives your transaction request in proper form, (as described in this prospectus) it is processed at the next determined NAV. 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.
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, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Michigan taxpayers because it invests in Michigan municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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 US dollars and drawn on a US 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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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.
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
PO 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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
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.
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.
You will receive periodic statements reporting all account activity, including dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Michigan taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance since inception. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
|
Year Ended October 31 |
2000 | 1999 | 2 | 1998 | 1997 | 1996 | 1 | ||||||||
| Net Asset Value, Beginning of Period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 |
$ 1.00 |
|
|||||||||
|
Income from Investment Operations: |
|||||||||||||||
|
Net investment income |
0.04 |
0.03 |
0.03 |
0.03 |
0.02 |
||||||||||
|
Less Distributions: |
|||||||||||||||
|
Distributions from net investment income |
(0.04 |
) |
(0.03 |
) |
(0.03 |
) |
(0.03 |
) |
(0.02 |
) |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net Asset Value, End of Period |
$ 1.00 |
|
$ 1.00 |
|
$ 1.00 |
|
$ 1.00 |
|
$ 1.00 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total Return3 |
3.84 |
% |
3.00 |
% |
3.36 |
% |
3.43 |
% |
2.19 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Ratios to Average Net Assets: |
|||||||||||||||
|
Expenses |
0.40 |
% |
0.40 |
% |
0.40 |
% |
0.40 |
% |
0.37 |
%5 |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net investment income |
3.78 |
% |
2.99 |
% |
3.31 |
% |
3.39 |
% |
3.40 |
%5 |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Expense waiver/reimbursement4 |
0.57 |
% |
0.57 |
% |
0.58 |
% |
0.66 |
% |
0.89 |
%5 |
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Supplemental Data: |
|||||||||||||||
|
Net assets, end of period (000omitted) |
$18,604 |
$18,890 |
$19,564 |
$13,370 |
$11,614 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
1 Reflects operations for the period from March 4, 1996 (date of initial public investment) to October 31, 1996.
2 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
3 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
5 Computed on an annualized basis.
See Notes which are an integral part of the Financial Statements
| Principal Amount |
Value | |||||
|---|---|---|---|---|---|---|
|
SHORT-TERM MUNICIPALS--98.9%1 |
||||||
| Michigan--98.9% | ||||||
| $ |
5,178,000 |
ABN AMRO MuniTOPS Certificates Trust (Michigan Non-AMT) (Series 1998-13) Weekly VRDNs (Michigan State Trunk Line)/(MBIA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) |
$ |
5,178,000 |
||
|
3,300,000 |
Auburn Hills, MI EDC, (Series 1995) Weekly VRDNs (Suburban Tool, Inc.)/(Huntington National Bank, Columbus, OH LOC) |
3,300,000 |
||||
| 5,200,000 |
Bruce Township, MI Hospital Finance Authority, Adjustable Rate Tender Securities, (Series 1988B), 4.25% TOBs (Sisters of Charity Health Care System)/(MBIA INS)/(Morgan Guaranty Trust Co., New York LIQ), Optional Tender 11/1/2000 |
5,200,000 |
||||
|
2,800,000 |
Clare, MI Public Schools, 5.15% TRANs, 8/23/2001 |
2,810,795 |
||||
|
1,000,000 |
Dearborn, MI EDC, (Series 1990) Weekly VRDNs (Exhibit Productions, Inc. Project)/(Comerica Bank LOC) |
1,000,000 |
||||
|
5,000,000 |
2 |
Detroit, MI City School District, MERLOTS (Series 2000A8), 4.40% TOBs (FGIC INS)/(First Union National Bank, Charlotte, NC LIQ), Optional Tender 10/1/2001 |
5,000,000 |
|||
|
5,925,000 |
Detroit, MI Sewage Disposal System, MERLOTS (Series 2000-I) Weekly VRDNs (FGIC INS)/(First Union National Bank, Charlotte, NC LIQ) |
5,925,000 |
||||
|
2,500,000 |
Grand Rapids, MI IDR Weekly VRDNs (Precision Aerospace, Inc.)/(Bank One, MI LOC) |
2,500,000 |
||||
|
3,000,000 |
Grand Rapids, MI IDR, (Series 1999) Weekly VRDNs (Kent Quality Foods, Inc.)/(Firstar Bank, N.A. LOC) |
3,000,000 |
||||
|
3,000,000 |
Lake Orion, MI School District, 5.125% RANs, 8/22/2001 |
3,016,804 |
||||
|
1,400,000 |
Michigan Higher Education Student Loan Authority, Refunding Revenue Bonds, (Series X11-B) Weekly VRDNs (AMBAC INS)/(KBC Bank NV LIQ) |
1,400,000 |
||||
|
3,400,000 |
Michigan Higher Education Student Loan Authority, (Series XII-D) Weekly VRDNs (AMBAC INS)/(KBC Bank NV LIQ) |
3,400,000 |
||||
|
3,100,000 |
Michigan Job Development Authority, Limited Obligation Revenue Bonds, Weekly VRDNs (Andersons Project)/(Credit Lyonnais, Paris LOC) |
3,100,000 |
||||
|
8,035,000 |
Michigan State Building Authority, (Series 1), 4.40% CP (Bank of New York, Canadian Imperial Bank of Commerce), Mandatory Tender 1/18/2001 |
8,035,000 |
||||
|
2,815,000 |
Michigan State Hospital Finance Authority, (Series J), 7.50% Bonds (Sisters of Mercy Health Corp. (Michigan & Iowa)/(United States Treasury PRF), 2/15/2001 (@102) |
2,897,095 |
||||
|
2,040,000 |
Michigan State Hospital Finance Authority, (Series A), 7.50% Bonds (McLaren Obligated Group)/(United States Treasury PRF), 9/15/2001 |
2,130,325 |
||||
|
4,200,000 |
Michigan State Housing Development Authority Weekly VRDNs (Woodland Meadows, MI)/(UBS AG LOC) |
4,200,000 |
||||
|
5,940,000 |
Michigan State Housing Development Authority, (PA-635R) Weekly VRDNs (Merrill Lynch & Co., Inc. LIQ) |
5,940,000 |
||||
|
3,845,000 |
Michigan State Housing Development Authority, (Series 1999B), 3.95% TOBs, Mandatory Tender 12/1/2000 |
3,845,000 |
||||
|
|
5,000,000 |
Michigan State Housing Development Authority, (Series 2000) Weekly VRDNs (River Place Plaza Apartments)/(Bank of New York LOC) |
|
5,000,000 |
||
|
7,695,000 |
Michigan State Housing Development Authority, MERLOTS (Series G) Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
7,874,909 |
||||
|
2,100,000 |
Michigan State Housing Development Authority, Revenue Bonds (Series A), 4.30% CP (Landesbank Hessen-Thueringen, Frankfurt LOC), Mandatory Tender 11/7/2000 |
2,100,000 |
||||
|
3,200,000 |
Michigan State Trunk Line, (Series A), 5.40% Bonds, 10/1/2001 |
3,229,689 |
||||
|
6,000,000 |
Michigan State, 5.00% BANs, 4/23/2001 |
6,020,446 |
||||
|
2,470,000 |
Michigan Strategic Fund Weekly VRDNs (Ace Hi Displays, Inc.)/(Firstar Bank, NA LOC) |
2,470,000 |
||||
|
1,300,000 |
Michigan Strategic Fund Weekly VRDNs (Bruin Land Holdings LLC)/(Huntington National Bank, Columbus, OH LOC) |
1,300,000 |
||||
|
4,500,000 |
Michigan Strategic Fund Weekly VRDNs (DSP Technology, Inc.)/(Comerica Bank, Detroit, MI LOC) |
4,500,000 |
||||
|
4,620,000 |
Michigan Strategic Fund Weekly VRDNs (Hess Industries, Inc.)/(Lasalle Bank, NA LOC) |
4,620,000 |
||||
|
5,125,000 |
Michigan Strategic Fund Weekly VRDNs (Tesco Engineering)/(Bank of Tokyo-Mitsubishi Ltd. LOC) |
5,125,000 |
||||
|
5,095,000 |
Michigan Strategic Fund Weekly VRDNs (United Fixtures Co.)/(Deutsche Bank AG LOC) |
5,095,000 |
||||
|
6,835,000 |
Michigan Strategic Fund, (Series 1991) Weekly VRDNs (AGA Gas, Inc.)/(Svenska Handelsbanken, Stockholm LOC) |
6,835,000 |
||||
|
700,000 |
Michigan Strategic Fund, (Series 1994) Weekly VRDNs (Wilkie Metal Products, Inc.)/(Wells Fargo Bank Minnesota, NA LOC) |
700,000 |
||||
|
2,905,000 |
Michigan Strategic Fund, Limited Obligation Revenue Bonds, (Series 1995) Weekly VRDNs (Bear Lake Associates Project)/(Old Kent Bank & Trust Co., Grand Rapids LOC) |
2,905,000 |
||||
|
545,000 |
Michigan Strategic Fund, Limited Obligation Revenue Bonds, (Series 1995) Weekly VRDNs (Hercules Drawn Steel Corporation Project)/(KeyBank, NA LOC) |
545,000 |
||||
|
790,000 |
Michigan Strategic Fund, Limited Obligation Revenue Bonds, (Series 1995) Weekly VRDNs (RSR Project)/(Old Kent Bank & Trust Co., Grand Rapids LOC) |
790,000 |
||||
|
600,000 |
Michigan Strategic Fund, (Series 1995) Weekly VRDNs (Rood Industries, Inc.)/(Bank One, Michigan LOC) |
600,000 |
||||
|
4,710,000 |
Michigan Strategic Fund, Limited Obligation Revenue Bonds, (Series 1995) Weekly VRDNs (Wayne Disposal-Oakland, Inc.)/(Comerica Bank, Detroit, MI LOC) |
4,710,000 |
||||
|
600,000 |
Michigan Strategic Fund, Limited Obligation Revenue Bonds, (Series 1996) Weekly VRDNs (ACI Properties, LLC Project)/(Comerica Bank, Detroit, MI LOC) |
600,000 |
||||
|
740,000 |
Michigan Strategic Fund, Limited Obligation Revenue Bond, (Series 1996) Weekly VRDNs (Akemi, Inc.)/(Comerica Bank, Detroit, MI LOC) |
740,000 |
||||
|
2,500,000 |
Michigan Strategic Fund, Adjustable Rate Limited Obligation Revenue Bonds, (Series 1996) Weekly VRDNs (C-Tec, Inc.)/(SunTrust Bank LOC) |
2,500,000 |
||||
|
835,000 |
Michigan Strategic Fund, (Series 1996) Weekly VRDNs (Echo Properties, LLC Project)/(Comerica Bank, Detroit, MI LOC) |
835,000 |
||||
| 1,900,000 |
Michigan Strategic Fund, Limited Obligation Revenue Bond, (Series 1996) Weekly VRDNs (G & T Real Estate Investments Co., LLC)/(Bank One, Michigan LOC) |
1,900,000 | ||||
|
760,000 |
Michigan Strategic Fund, Limited Obligation Revenue Bond, (Series 1996) Weekly VRDNs (Inalfa-Hollandia, Inc.)/(Comerica Bank, Detroit, MI LOC) |
760,000 |
||||
|
1,725,000 |
Michigan Strategic Fund, Variable Rate Demand Limited Obligation Revenue Bonds, (Series 1996) Weekly VRDNs (R.H. Wyner Associates, Inc.)/(State Street Bank and Trust Co. LOC) |
1,725,000 |
||||
|
2,700,000 |
Michigan Strategic Fund, Limited Obligation Revenue Bond, (Series 1996) Weekly VRDNs (RMT Woodworth, Inc.)/ (Comerica Bank, Detroit, MI LOC) |
2,700,000 |
||||
|
3,000,000 |
Michigan Strategic Fund, (Series 1997) Weekly VRDNs (Enprotech Mechanical Services, Inc.)/(Michigan National Bank, Farmington Hills LOC) |
3,000,000 |
||||
|
2,340,000 |
Michigan Strategic Fund, Variable Rate Demand Limited Obligation Revenue Bond, (Series 1998) Weekly VRDNs (Monroe Publishing Co.)/(Comerica Bank, Detroit, MI LOC) |
2,340,000 |
||||
|
1,530,000 |
Michigan Strategic Fund, (Series 1998) Weekly VRDNs (Wolverine Leasing)/ (Huntington National Bank, Columbus, OH LOC) |
1,530,000 |
||||
|
1,845,000 |
Michigan Strategic Fund, (Series 1998) Weekly VRDNs (Wolverine Printing)/(Huntington National Bank, Columbus, OH LOC) |
1,845,000 |
||||
|
5,135,000 |
Michigan Strategic Fund, (Series 1999) Weekly VRDNs (DW Aluminum, LLC)/(KeyBank, NA LOC) |
5,135,000 |
||||
|
2,710,000 |
Michigan Strategic Fund, (Series 1999) Weekly VRDNs (Fab-All Manufacturing, Inc.)/(Wells Fargo Bank Minnesota, NA LOC) |
2,710,000 |
||||
|
1,600,000 |
Michigan Strategic Fund, (Series 1999) Weekly VRDNs (Globe Apartments)/(Federal Home Loan Bank of Indianapolis LOC) |
1,600,000 |
||||
|
2,300,000 |
Michigan Strategic Fund, (Series 1999) Weekly VRDNs (J.G. Kern Enterprises, Inc.)/Michigan National Bank, Farmington Hills LOC) |
2,300,000 |
||||
|
2,200,000 |
Michigan Strategic Fund, (Series 1999) Weekly VRDNs (R.M.D.H. Properties LLC)/(Huntington National Bank, Columbus, OH LOC) |
2,200,000 |
||||
| 2,905,000 |
Michigan Strategic Fund, Limited Obligation Revenue Bond, (Series 2000) Weekly VRDNs (Imperial Metal Products Co. LLC)/(National City Bank, Michigan/Illinois LOC) |
2,905,000 | ||||
| 7,500,000 |
Michigan Strategic Fund, Limited Obligation Revenue Bond, (Series 2000) Weekly VRDNs (Lee Steel Corp.)/(Comerica Bank, Detroit, MI LOC) |
7,500,000 | ||||
|
2,500,000 |
Michigan Strategic Fund, Limited Obligation Revenue Bond, (Series 2000) Weekly VRDNs (Open Plan Systems, Inc.)/(Wachovia Bank of NC, NA LOC) |
2,500,000 |
||||
|
1,700,000 |
Michigan Strategic Fund, (Series 2000A) Weekly VRDNs (Michigan Turkey Producers, LLC)/(Michigan National Bank, Farmington Hills LOC) |
1,700,000 |
||||
|
1,000,000 |
Michigan Strategic Fund, (Series 2000B) Weekly VRDNs (Michigan Turkey Producers, LLC)/(Michigan National Bank, Farmington Hills LOC) |
1,000,000 |
||||
|
6,575,000 |
Michigan Strategic Fund, (Series A) Weekly VRDNs (Teal Run Apartments)/(Federal Home Loan Bank of Indianapolis LOC) |
6,575,000 |
||||
|
775,000 |
Michigan Strategic Fund, (Series B) Weekly VRDNs (Teal Run Apartments)/(Federal Home Loan Bank of Indianapolis LOC) |
775,000 |
||||
|
685,000 |
Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series 1995) Weekly VRDNs (Rowe Thomas Company)/(Comerica Bank, Detroit, MI LOC) |
685,000 |
||||
|
|
3,230,000 |
Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series 1995) Weekly VRDNs (J.R. Automation Technologies Project)/(Old Kent Bank & Trust Co., Grand Rapids LOC) |
|
3,230,000 |
||
|
1,450,000 |
Michigan Strategic Fund, Limited Obligation Revenue Bonds, (Series 1995) Weekly VRDNs (Welch Properties)/(Old Kent Bank & Trust Co., Grand Rapids LOC) |
1,450,000 |
||||
|
2,200,000 |
Mount Morris, MI CSD, 4.95% RANs, 8/30/2001 |
2,203,484 |
||||
|
2,820,000 |
Oakland County, MI EDC, Limited Obligation Revenue Bonds, (Series 1997) Weekly VRDNs (Stone Soap Company, Inc.)/(Michigan National Bank, Farmington Hills LOC) |
2,820,000 |
||||
|
2,110,000 |
Oakland County, MI EDC, Limited Obligation Revenue Bonds, (Series 1998) Weekly VRDNs (Fox Manor, Inc.)/(Allied Irish Banks PLC LOC) |
2,110,000 |
||||
|
4,200,000 |
Owosso Public School, MI, 4.75% RANs, 8/22/2001 |
4,211,330 |
||||
|
|
|
|||||
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
$ |
210,382,877 |
||||
|
|
|
|||||
Securities that are subject to alternative minimum tax represent 65.0% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by NRSROs or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+ , SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
| First Tier | Second Tier | |
|
100.0% |
0.0% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $5,000,000 which represents 2.4% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($212,661,646) at October 31, 2000.
The following acronyms are used throughout this portfolio:
| AMBAC | --American Municipal Bond Assurance Corporation |
| AMT | --Alternative Minimum Tax |
| BANS | --Bond Anticipation Notes |
| CP | --Commercial Paper |
| CSD | --Central School District |
|
EDC |
--Economic Development Commission |
| FGIC | --Financial Guaranty Insurance Company |
| IDR | --Industrial Development Revenue |
| INS | --Insured |
| LIQ | --Liquidity Agreement |
| LOCs | --Letter(s) of Credit |
| MBIA | --Municipal Bond Investors Assurance |
| MERLOTS | --Municipal Exempt Receipts -- Liquidity Optional Tender Series |
| PRF | --Prerefunded |
| RANs | --Revenue Anticipation Notes |
| TOBs | --Tender Option Bonds |
| TRANs | --Tax and Revenue Anticipation Notes |
| VRDNs | --Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
| Assets: | ||||||
| Total investments in securities, at amortized cost and value | $ | 210,382,877 | ||||
| Cash | 929,720 | |||||
| Income receivable | 1,419,359 | |||||
| Receivable for shares sold | 204,819 | |||||
|
|
|
|||||
| Total assets | 212,936,775 | |||||
|
|
|
|||||
| Liabilities: | ||||||
| Payable for shares redeemed | $ | 85,374 | ||||
| Income distribution payable | 148,694 | |||||
| Accrued expenses | 41,061 | |||||
|
|
|
|
|
|||
| Total liabilities | 275,129 | |||||
|
|
|
|||||
| Net Assets for 212,661,646 shares outstanding | $ | 212,661,646 | ||||
|
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|
|||||
| Net Asset Value, Offering Price and Redemption Proceeds Per Share | ||||||
| Institutional Service Shares: | ||||||
| $194,058,115 ÷ 194,058,115 shares outstanding | $1.00 | |||||
|
|
|
|||||
| Institutional Shares: | ||||||
| $18,603,531 ÷ 18,603,531 shares outstanding | $1.00 | |||||
|
|
|
See Notes which are an integral part of the Financial Statements
| Investment Income: | |||||||||||
| Interest | $ | 8,598,757 | |||||||||
|
|
|
||||||||||
| Expenses: | |||||||||||
| Investment adviser fee | $ | 1,028,908 | |||||||||
| Administrative personnel and services fee | 155,000 | ||||||||||
| Custodian fees | 12,449 | ||||||||||
| Transfer and dividend disbursing agent fees and expenses | 120,011 | ||||||||||
| Directors'/Trustees' fees | 1,917 | ||||||||||
| Auditing fees | 11,823 | ||||||||||
| Legal fees | 18,198 | ||||||||||
| Portfolio accounting fees | 61,868 | ||||||||||
| Shareholder services fee--Institutional Service Shares | 469,533 | ||||||||||
| Shareholder services fee--Institutional Shares | 44,921 | ||||||||||
| Share registration costs | 30,334 | ||||||||||
| Printing and postage | 28,194 | ||||||||||
| Insurance premiums | 9,384 | ||||||||||
| Miscellaneous | 6,582 | ||||||||||
|
|
|
||||||||||
| Total expenses | 1,999,122 | ||||||||||
| Waivers: |
|
|
|||||||||
| Waiver of investment adviser fee | $ | (652,488 | ) | ||||||||
| Waiver of shareholder services fee--Institutional Service Shares | (169,032 | ) | |||||||||
| Waiver of shareholder services fee--Institutional Shares | (44,921 | ) | |||||||||
|
|
|
||||||||||
| Total waivers | (866,441 | ) | |||||||||
|
|
|
||||||||||
| Net expenses | 1,132,681 | ||||||||||
|
|
|
||||||||||
| Net investment income | $ | 7,466,076 | |||||||||
|
|
|
See Notes which are an integral part of the Financial Statements
| Year Ended October 31 | 2000 | 1999 | ||||||
| Increase (Decrease) in Net Assets | ||||||||
| Operations: | ||||||||
| Net investment income | $ | 7,466,076 | $ | 6,122,328 | ||||
|
|
|
|
|
|
|
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| Distributions to Shareholders: | ||||||||
| Distributions from net investment income | ||||||||
| Institutional Service Shares | (6,786,929 | ) | (5,575,919 | ) | ||||
| Institutional Shares | (679,147 | ) | (546,409 | ) | ||||
|
|
|
|
|
|
|
|||
| CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | (7,466,076 | ) | (6,122,328 | ) | ||||
|
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|
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|
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| Share Transactions: | ||||||||
| Proceeds from sale of shares | 818,323,293 | 789,450,916 | ||||||
| Net asset value of shares issued to shareholders in payment of distributions declared | 5,999,350 | 3,835,666 | ||||||
| Cost of shares redeemed | (813,160,934 | ) | (796,339,575 | ) | ||||
|
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|
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|
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| CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | 11,161,709 | (3,052,993 | ) | |||||
|
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|
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|
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| Change in net assets | 11,161,709 | (3,052,993 | ) | |||||
|
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| Net Assets: | ||||||||
| Beginning of period | 201,499,937 | 204,552,930 | ||||||
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|
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| End of period | $ | 212,661,646 | $ | 201,499,937 | ||||
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See Notes which are an integral part of the Financial Statements
Effective February 1, 2000, Michigan Municipal Cash Trust (the "Fund") became a portfolio of the Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Service Shares and Institutional Shares. The investment objective of the Fund is to provide current income exempt from federal regular income tax and the personal income tax imposed by the State of Michigan consistent with the stability of principal and liquidity.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
At October 31, 2000, the Fund for federal tax purposes, had a capital loss carryforward of $1,873, which will reduce taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and this will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire in 2005.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees (the "Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. Transactions in shares were as follows:
| Year Ended October 31 | 2000 | 1999 | ||||
| Institutional Shares: | ||||||
| Shares sold | 88,165,193 | 94,227,271 | ||||
|
Shares issued to shareholders in payment of distributions declared |
52,528 |
35,163 |
||||
|
Shares redeemed |
(88,504,142 |
) |
(94,936,306 |
) |
||
|
|
|
|
|
|||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
(286,421 |
) |
(673,872 |
) |
||
|
|
|
|
|
| Year Ended October 31 | 2000 | 1999 | ||||
| Institutional Service Shares: | ||||||
| Shares sold | 730,158,100 | 695,223,645 | ||||
| Shares issued to shareholders in payment of distributions declared | 5,946,822 | 3,800,503 | ||||
| Shares redeemed | (724,656,792 | ) | (701,403,269 | ) | ||
|
|
|
|
|
|||
| NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS | 11,448,130 | (2,379,121 | ) | |||
|
|
|
|
|
|||
| NET CHANGE RESULTING FROM SHARE TRANSACTIONS | 11,161,709 | (3,052,993 | ) | |||
|
|
|
|
|
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee and/or reimburse certain operating expenses of the Fund. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of their fees. FSSC can modify or terminate this voluntary waiver at any time at their sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
Organizational and/or start-up administrative services expenses of $18,618 were borne initially by the Adviser. The Fund has agreed to reimburse the Adviser for the organizational and/or startup administrative services expenses during the five-year period following the effective date.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $386,781,000 and $402,560,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 82.7% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 12.5% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Michigan Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Michigan Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
/s/Ernst & Young, LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000 is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as they become available. To obtain the SAI, the Semi-Annual Report and other information without charge, and make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
[Graphic Representation Omitted--See Appendix]
Michigan Municipal Cash Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N385
G01212-04-IS (12/00)
Federated is a registered mark of Federated Investors, Inc.
2000 (c)Federated Investors, Inc.
[Graphic Representation Omitted--See Appendix]
A Portfolio of Money Market Obligations Trust
A money market mutual fund seeking to provide current income exempt from federal regular income tax and the personal income tax imposed by the State of Michigan consistent with stability of principal and liquidity by investing in a portfolio of short-term, high-quality Michigan tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
| Risk/Return Summary | 1 | |
| What are the Fund's Fees and Expenses? | 3 | |
| What are the Fund's Investment Strategies? | 4 | |
| What are the Principal Securities in Which the Fund Invests? | 5 | |
| What are the Specific Risks of Investing in the Fund? | 6 | |
| What do Shares Cost? | 7 | |
| How is the Fund Sold? | 7 | |
| How to Purchase Shares | 8 | |
| How to Redeem Shares | 9 | |
| Account and Share Information | 12 | |
| Who Manages the Fund? | 13 | |
| Financial Information | 13 |
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and the personal income tax imposed by the State of Michigan 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.
The Fund invests in short-term, high-quality Michigan tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Michigan state income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
[Graphic Representation Omitted--See Appendix]
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Service Shares total returns on a calendar year-end basis.
The Fund's Institutional Service Shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.75%.
Within the period shown in the Chart, the Fund's Institutional Service Shares highest quarterly return was 0.86% (quarter ended June 30, 1997). Its lowest quarterly return was 0.64% (quarter ended March 31, 999).
The following table represents the Fund's Institutional Service Shares Average Annual Total Returns, for the calendar periods ended December 31, 1999.
| Calendar Period |
Institutional Service Shares |
|
|
1 Year |
2.91% | |
| Start of Performance1 | 3.19% |
1 The Fund's Institutional Service Shares start of performance date was June 20, 1995.
The Fund's Institutional Service Shares 7-Day Net Yield as of December 31, 1999 was 4.06%.
You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund's Institutional Service Shares.
| Shareholder Fees | |||
| Fees Paid Directly From Your Investment | |||
| Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) | None | ||
| Maximum Deferred Sales
Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
None | ||
| Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) | None | ||
| Redemption Fee (as a percentage of amount redeemed, if applicable) | None | ||
| Exchange Fee | None | ||
| Annual Fund Operating Expenses (Before Waiver)1 | |||
| Expenses That are Deducted From Fund Assets (as a percentage of average net assets) | |||
| Management Fee2 | 0.50% | ||
| Distribution (12b-1) Fee | None | ||
| Shareholder Services Fee3 | 0.25% | ||
| Other Expenses | 0.22% | ||
| Total Annual Fund Operating Expenses | 0.97% | ||
| 1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. | |||
| Total Waivers of Fund Expenses |
0.41% |
||
| Total Actual Annual Fund Operating Expenses (after waivers) | 0.56% | ||
| 2 The adviser has voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.18% for the fiscal year ended October 31, 2000. | |||
| 3 The shareholder services fee has been voluntarity waived. This voluntary waiver can be terminated at any time. The shareholder services fee paid by the Fund's Institutional Services Shares (after the voluntary waiver) was 0.16% for the fiscal year ended October 31, 2000. | |||
This Example is intended to help you compare the cost of investing in the Fund's with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's 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 shown above and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be
| Calendar Period | Fund | ||
| 1 Year | $ | 99 | |
| 3 Years | $ | 309 | |
| 5 Years | $ | 536 | |
| 10 Years | $ | 1,190 | |
The Fund invests in a portfolio of high-quality Michigan tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Michigan state income tax. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal and Michigan income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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. Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize 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.
When the Fund receives your transaction request in proper form (as described in this prospectus) it is processed at the next determined NAV. 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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
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 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, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Michigan taxpayers because it invests in Michigan municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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.
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Michigan taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance since inception. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income from Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.04 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
|
|
|
|
|
|||||||||||
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.04 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|
|
|
|
|||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|
|
|
|
|||||||||||
|
Total Return2 |
|
3.67 |
% |
|
2.84 |
% |
|
3.20 |
% |
|
3.27 |
% |
|
3.26 |
% |
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
0.56 |
% |
|
0.56 |
% |
|
0.56 |
% |
|
0.55 |
% |
|
0.50 |
% |
|
|
|
|
|
|
|||||||||||
|
Net investment income |
|
3.61 |
% |
|
2.80 |
% |
|
3.16 |
% |
|
3.22 |
% |
|
3.21 |
% |
|
|
|
|
|
|
|||||||||||
|
Expense waiver/reimbursement3 |
|
0.41 |
% |
|
0.40 |
% |
|
0.42 |
% |
|
0.51 |
% |
|
0.76 |
% |
|
|
|
|
|
|
|||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000 omitted) |
|
$194,058 |
|
|
$182,610 |
|
|
$184,989 |
|
|
$147,105 |
|
|
$92,275 |
|
|
|
|
|
|
|
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
|
Principal |
|
|
|
Value |
||
|---|---|---|---|---|---|---|
|
|
|
|
SHORT-TERM MUNICIPALS--98.9%1 |
|
|
|
|
|
|
|
Michigan--98.9% |
|
|
|
|
$ |
5,178,000 |
|
ABN AMRO MuniTOPS Certificates Trust (Michigan Non-AMT) (Series 1998-13) Weekly VRDNs (Michigan State Trunk Line)/(MBIA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) |
|
$ |
5,178,000 |
|
|
3,300,000 |
|
Auburn Hills, MI EDC, (Series 1995) Weekly VRDNs (Suburban Tool, Inc.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
3,300,000 |
|
|
5,200,000 |
|
Bruce Township, MI Hospital Finance Authority, Adjustable Rate Tender Securities, (Series 1988B), 4.25% TOBs (Sisters of Charity Health Care System)/(MBIA INS)/(Morgan Guaranty Trust Co., New York LIQ), Optional Tender 11/1/2000 |
|
|
5,200,000 |
|
|
2,800,000 |
|
Clare, MI Public Schools, 5.15% TRANs, 8/23/2001 |
|
|
2,810,795 |
|
|
1,000,000 |
|
Dearborn, MI EDC, (Series 1990) Weekly VRDNs (Exhibit Productions, Inc. Project)/(Comerica Bank LOC) |
|
|
1,000,000 |
|
|
5,000,000 |
2 |
Detroit, MI City School District, MERLOTS (Series 2000 A8), 4.40% TOBs (FGIC INS)/(First Union National Bank, Charlotte, NC LIQ), Optional Tender 10/1/2001 |
|
|
5,000,000 |
|
|
5,925,000 |
|
Detroit, MI Sewage Disposal System, MERLOTS (Series 2000-I) Weekly VRDNs (FGIC INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
5,925,000 |
|
|
2,500,000 |
|
Grand Rapids, MI IDR Weekly VRDNs (Precision Aerospace, Inc.)/(Bank One, MI LOC) |
|
|
2,500,000 |
|
|
3,000,000 |
|
Grand Rapids, MI IDR, (Series 1999) Weekly VRDNs (Kent Quality Foods, Inc.)/(Firstar Bank, N.A. LOC) |
|
|
3,000,000 |
|
|
3,000,000 |
|
Lake Orion, MI School District, 5.125% RANs, 8/22/2001 |
|
|
3,016,804 |
|
|
1,400,000 |
|
Michigan Higher Education Student Loan Authority, Refunding Revenue Bonds, (Series X11-B) Weekly VRDNs (AMBAC INS)/(KBC Bank N.V. LIQ) |
|
|
1,400,000 |
|
|
3,400,000 |
|
Michigan Higher Education Student Loan Authority, (Series XII-D) Weekly VRDNs (AMBAC INS)/(KBC Bank N.V. LIQ) |
|
|
3,400,000 |
|
|
3,100,000 |
|
Michigan Job Development Authority, Limited Obligation Revenue Bonds, Weekly VRDNs (Andersons Project)/(Credit Lyonnais, Paris LOC) |
|
|
3,100,000 |
|
|
8,035,000 |
|
Michigan State Building Authority, (Series 1), 4.40% CP (Bank of New York, Canadian Imperial Bank of Commerce), Mandatory Tender 1/18/2001 |
|
|
8,035,000 |
|
|
2,815,000 |
|
Michigan State Hospital Finance Authority, (Series J), 7.50% Bonds (Sisters of Mercy Health Corp. (Michigan & Iowa)/(United States Treasury PRF), 2/15/2001 (@102) |
|
|
2,897,095 |
|
|
2,040,000 |
|
Michigan State Hospital Finance Authority, (Series A), 7.50% Bonds (McLaren Obligated Group)/(United States Treasury PRF), 9/15/2001 |
|
|
2,130,325 |
|
|
4,200,000 |
|
Michigan State Housing Development Authority Weekly VRDNs (Woodland Meadows, MI)/(UBS AG LOC) |
|
|
4,200,000 |
|
|
5,940,000 |
|
Michigan State Housing Development Authority, (PA-635R) Weekly VRDNs (Merrill Lynch & Co., Inc. LIQ) |
|
|
5,940,000 |
|
|
3,845,000 |
|
Michigan State Housing Development Authority, (Series 1999B), 3.95% TOBs, Mandatory Tender 12/1/2000 |
|
|
3,845,000 |
|
$ |
5,000,000 |
|
Michigan State Housing Development Authority, (Series 2000) Weekly VRDNs (River Place Plaza Apartments)/(Bank of New York LOC) |
|
$ |
5,000,000 |
|
|
7,695,000 |
|
Michigan State Housing Development Authority, MERLOTS (Series G) Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
7,874,909 |
|
|
2,100,000 |
|
Michigan State Housing Development Authority, Revenue Bonds (Series A), 4.30% CP (Landesbank Hessen-Thueringen, Frankfurt LOC), Mandatory Tender 11/7/2000 |
|
|
2,100,000 |
|
|
3,200,000 |
|
Michigan State Trunk Line, (Series A), 5.40% Bonds, 10/1/2001 |
|
|
3,229,689 |
|
|
6,000,000 |
|
Michigan State, 5.00% BANs, 4/23/2001 |
|
|
6,020,446 |
|
|
2,470,000 |
|
Michigan Strategic Fund Weekly VRDNs (Ace Hi Displays, Inc.)/(Firstar Bank, N.A. LOC) |
|
|
2,470,000 |
|
|
1,300,000 |
|
Michigan Strategic Fund Weekly VRDNs (Bruin Land Holdings LLC)/(Huntington National Bank, Columbus, OH LOC) |
|
|
1,300,000 |
|
|
4,500,000 |
|
Michigan Strategic Fund Weekly VRDNs (DSP Technology, Inc.)/(Comerica Bank, Detroit, MI LOC) |
|
|
4,500,000 |
|
|
4,620,000 |
|
Michigan Strategic Fund Weekly VRDNs (Hess Industries, Inc.)/(Lasalle Bank, N.A. LOC) |
|
|
4,620,000 |
|
|
5,125,000 |
|
Michigan Strategic Fund Weekly VRDNs (Tesco Engineering)/(Bank of Tokyo-Mitsubishi Ltd. LOC) |
|
|
5,125,000 |
|
|
5,095,000 |
|
Michigan Strategic Fund Weekly VRDNs (United Fixtures Co.)/(Deutsche Bank AG LOC) |
|
|
5,095,000 |
|
|
6,835,000 |
|
Michigan Strategic Fund, (Series 1991) Weekly VRDNs (AGA Gas, Inc.)/(Svenska Handelsbanken, Stockholm LOC) |
|
|
6,835,000 |
|
|
700,000 |
|
Michigan Strategic Fund, (Series 1994) Weekly VRDNs (Wilkie Metal Products, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
700,000 |
|
|
2,905,000 |
|
Michigan Strategic Fund, Limited Obligation Revenue Bonds, (Series 1995) Weekly VRDNs (Bear Lake Associates Project)/(Old Kent Bank & Trust Co., Grand Rapids LOC) |
|
|
2,905,000 |
|
|
545,000 |
|
Michigan Strategic Fund, Limited Obligation Revenue Bonds, (Series 1995) Weekly VRDNs (Hercules Drawn Steel Corporation Project)/(KeyBank, N.A. LOC) |
|
|
545,000 |
|
|
790,000 |
|
Michigan Strategic Fund, Limited Obligation Revenue Bonds, (Series 1995) Weekly VRDNs (RSR Project)/(Old Kent Bank & Trust Co., Grand Rapids LOC) |
|
|
790,000 |
|
|
600,000 |
|
Michigan Strategic Fund, (Series 1995) Weekly VRDNs (Rood Industries, Inc.)/(Bank One, Michigan LOC) |
|
|
600,000 |
|
|
4,710,000 |
|
Michigan Strategic Fund, Limited Obligation Revenue Bonds, (Series 1995) Weekly VRDNs (Wayne Disposal-Oakland, Inc.)/(Comerica Bank, Detroit, MI LOC) |
|
|
4,710,000 |
|
|
600,000 |
|
Michigan Strategic Fund, Limited Obligation Revenue Bonds, (Series 1996) Weekly VRDNs (ACI Properties, LLC Project)/(Comerica Bank, Detroit, MI LOC) |
|
|
600,000 |
|
|
740,000 |
|
Michigan Strategic Fund, Limited Obligation Revenue Bond, (Series 1996) Weekly VRDNs (Akemi, Inc.)/(Comerica Bank, Detroit, MI LOC) |
|
|
740,000 |
|
|
2,500,000 |
|
Michigan Strategic Fund, Adjustable Rate Limited Obligation Revenue Bonds, (Series 1996) Weekly VRDNs (C-Tec, Inc.)/(SunTrust Bank LOC) |
|
|
2,500,000 |
|
|
835,000 |
|
Michigan Strategic Fund, (Series 1996) Weekly VRDNs (Echo Properties, LLC Project)/(Comerica Bank, Detroit, MI LOC) |
|
|
835,000 |
|
$ |
1,900,000
|
|
Michigan Strategic Fund, Limited Obligation Revenue Bond, (Series 1996) Weekly VRDNs (G & T Real Estate Investments Co., LLC)/(Bank One, Michigan LOC) |
|
$ |
1,900,000 |
|
|
760,000 |
|
Michigan Strategic Fund, Limited Obligation Revenue Bond, (Series 1996) Weekly VRDNs (Inalfa-Hollandia, Inc.)/(Comerica Bank, Detroit, MI LOC) |
|
|
760,000 |
|
|
1,725,000 |
|
Michigan Strategic Fund, Variable Rate Demand Limited Obligation Revenue Bonds, (Series 1996) Weekly VRDNs (R.H. Wyner Associates, Inc.)/(State Street Bank and Trust Co. LOC) |
|
|
1,725,000 |
|
|
2,700,000 |
|
Michigan Strategic Fund, Limited Obligation Revenue Bond, (Series 1996) Weekly VRDNs (RMT Woodworth, Inc.)/ (Comerica Bank, Detroit, MI LOC) |
|
|
2,700,000 |
|
|
3,000,000 |
|
Michigan Strategic Fund, (Series 1997) Weekly VRDNs (Enprotech Mechanical Services, Inc.)/(Michigan National Bank, Farmington Hills LOC) |
|
|
3,000,000 |
|
|
2,340,000 |
|
Michigan Strategic Fund, Variable Rate Demand Limited Obligation Revenue Bond, (Series 1998) Weekly VRDNs (Monroe Publishing Co.)/(Comerica Bank, Detroit, MI LOC) |
|
|
2,340,000 |
|
|
1,530,000 |
|
Michigan Strategic Fund, (Series 1998) Weekly VRDNs (Wolverine Leasing)/ (Huntington National Bank, Columbus, OH LOC) |
|
|
1,530,000 |
|
|
1,845,000 |
|
Michigan Strategic Fund, (Series 1998) Weekly VRDNs (Wolverine Printing)/(Huntington National Bank, Columbus, OH LOC) |
|
|
1,845,000 |
|
|
5,135,000 |
|
Michigan Strategic Fund, (Series 1999) Weekly VRDNs (DW Aluminum, LLC)/(KeyBank, N.A. LOC) |
|
|
5,135,000 |
|
|
2,710,000 |
|
Michigan Strategic Fund, (Series 1999) Weekly VRDNs (Fab-All Manufacturing, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,710,000 |
|
|
1,600,000 |
|
Michigan Strategic Fund, (Series 1999) Weekly VRDNs (Globe Apartments)/(Federal Home Loan Bank of Indianapolis LOC) |
|
|
1,600,000 |
|
|
2,300,000 |
|
Michigan Strategic Fund, (Series 1999) Weekly VRDNs (J.G. Kern Enterprises, Inc.)/Michigan National Bank, Farmington Hills LOC) |
|
|
2,300,000 |
|
|
2,200,000 |
|
Michigan Strategic Fund, (Series 1999) Weekly VRDNs (R.M.D.H. Properties LLC)/(Huntington National Bank, Columbus, OH LOC) |
|
|
2,200,000 |
|
|
2,905,000
|
|
Michigan Strategic Fund, Limited Obligation Revenue Bond, (Series 2000) Weekly VRDNs (Imperial Metal Products Co. LLC)/(National City Bank, Michigan/Illinois LOC) |
|
|
2,905,000 |
|
|
7,500,000
|
|
Michigan Strategic Fund, Limited Obligation Revenue Bond, (Series 2000) Weekly VRDNs (Lee Steel Corp.)/(Comerica Bank, Detroit, MI LOC) |
|
|
7,500,000 |
|
|
2,500,000 |
|
Michigan Strategic Fund, Limited Obligation Revenue Bond, (Series 2000) Weekly VRDNs (Open Plan Systems, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
2,500,000 |
|
|
1,700,000 |
|
Michigan Strategic Fund, (Series 2000A) Weekly VRDNs (Michigan Turkey Producers, LLC)/(Michigan National Bank, Farmington Hills LOC) |
|
|
1,700,000 |
|
|
1,000,000 |
|
Michigan Strategic Fund, (Series 2000B) Weekly VRDNs (Michigan Turkey Producers, LLC)/(Michigan National Bank, Farmington Hills LOC) |
|
|
1,000,000 |
|
|
6,575,000 |
|
Michigan Strategic Fund, (Series A) Weekly VRDNs (Teal Run Apartments)/(Federal Home Loan Bank of Indianapolis LOC) |
|
|
6,575,000 |
|
|
775,000 |
|
Michigan Strategic Fund, (Series B) Weekly VRDNs (Teal Run Apartments)/(Federal Home Loan Bank of Indianapolis LOC) |
|
|
775,000 |
|
|
685,000 |
|
Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series 1995) Weekly VRDNs (Rowe Thomas Company)/(Comerica Bank, Detroit, MI LOC) |
|
|
685,000 |
|
$ |
3,230,000 |
|
Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series 1995) Weekly VRDNs (J.R. Automation Technologies Project)/(Old Kent Bank & Trust Co., Grand Rapids LOC) |
|
$ |
3,230,000 |
|
|
1,450,000 |
|
Michigan Strategic Fund, Limited Obligation Revenue Bonds, (Series 1995) Weekly VRDNs (Welch Properties)/(Old Kent Bank & Trust Co., Grand Rapids LOC) |
|
|
1,450,000 |
|
|
2,200,000 |
|
Mount Morris, MI CSD, 4.95% RANs, 8/30/2001 |
|
|
2,203,484 |
|
|
2,820,000 |
|
Oakland County, MI EDC, Limited Obligation Revenue Bonds, (Series 1997) Weekly VRDNs (Stone Soap Company, Inc.)/(Michigan National Bank, Farmington Hills LOC) |
|
|
2,820,000 |
|
|
2,110,000 |
|
Oakland County, MI EDC, Limited Obligation Revenue Bonds, (Series 1998) Weekly VRDNs (Fox Manor, Inc.)/(Allied Irish Banks PLC LOC) |
|
|
2,110,000 |
|
|
4,200,000 |
|
Owosso Public School, MI, 4.75% RANs, 8/22/2001 |
|
|
4,211,330 |
|
|
||||||
|
|
|
Total Investments (at amortized cost)3 |
|
$ |
210,382,877 |
|
|
|
||||||
Securities that are subject to alternative minimum tax represent 65.0% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+ , SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
100.0% |
|
0.0% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the fund's Board of Trustees. At October 31, 2000, these securities amounted to $5,000,000 which represents 2.4% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($212,661,646) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
AMT |
--Alternative Minimum Tax |
|
BANs |
--Bond Anticipation Notes |
|
CP |
--Commercial Paper |
|
CSD |
--Central School District |
|
EDC |
--Economic Development Commission |
|
FGIC |
--Financial Guaranty Insurance Company |
|
IDR |
--Industrial Development Revenue |
|
INS |
--Insured |
|
LIQ |
--Liquidity Agreement |
|
LOCs |
--Letter(s) of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
PRF |
--Prerefunded |
|
RANs |
--Revenue Anticipation Notes |
|
TOBs |
--Tender Option Bonds |
|
TRANs |
--Tax and Revenue Anticipation Notes |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
210,382,877 |
|
Cash |
|
|
|
|
|
929,720 |
|
Income receivable |
|
|
|
|
|
1,419,359 |
|
Receivable for shares sold |
|
|
|
|
|
204,819 |
|
|
||||||
|
Total assets |
|
|
|
|
|
212,936,775 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
85,374 |
|
|
|
|
Income distribution payable |
|
|
148,694 |
|
|
|
|
Accrued expenses |
|
|
41,061 |
|
|
|
|
Total liabilities |
|
|
|
|
275,129 |
|
|
|
||||||
|
Net Assets for 212,661,646 shares outstanding |
|
|
|
|
$ |
212,661,646 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
$194,058,115 ÷ 194,058,115 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Institutional Shares: |
|
|
|
|
|
|
|
$18,603,531 ÷ 18,603,531 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
8,598,757 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
1,028,908 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
155,000 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
12,449 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
120,011 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
1,917 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,823 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
18,198 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
61,868 |
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
469,533 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
44,921 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
30,334 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
28,194 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
9,384 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
6,582 |
|
|
|
|
|
|
|||||||||||
|
Total expenses |
|
|
|
|
|
|
1,999,122 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(652,488 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(169,032 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(44,921 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
Total waivers |
|
|
|
|
|
|
(866,441 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
1,132,681 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
7,466,076 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
7,466,076 |
|
|
$ |
6,122,328 |
|
|
|
|
|||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Service Shares |
|
|
(6,786,929 |
) |
|
|
(5,575,919 |
) |
|
Institutional Shares |
|
|
(679,147 |
) |
|
|
(546,409 |
) |
|
|
|
|||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(7,466,076 |
) |
|
|
(6,122,328 |
) |
|
|
|
|||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
818,323,293 |
|
|
|
789,450,916 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
5,999,350 |
|
|
|
3,835,666 |
|
|
Cost of shares redeemed |
|
|
(813,160,934 |
) |
|
|
(796,339,575 |
) |
|
|
|
|||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
11,161,709 |
|
|
|
(3,052,993 |
) |
|
|
|
|||||||
|
Change in net assets |
|
|
11,161,709 |
|
|
|
(3,052,993 |
) |
|
|
|
|||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
201,499,937 |
|
|
|
204,552,930 |
|
|
|
|
|||||||
|
End of period |
|
$ |
212,661,646 |
|
|
$ |
201,499,937 |
|
|
|
|
|||||||
See Notes which are an integral part of the Financial Statements
Effective February 1, 2000, Michigan Municipal Cash Trust (the "Fund") became a portfolio of the Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Service Shares and Institutional Shares. The investment objective of the Fund is to provide current income exempt from federal regular income tax and the personal income tax imposed by the State of Michigan consistent with the stability of principal and liquidity.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
At October 31, 2000, the Fund for federal tax purposes, had a capital loss carryforward of $1,873, which will reduce taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and this will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire in 2005.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees (the "Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
88,165,193 |
|
|
94,227,271 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
52,528 |
|
|
35,163 |
|
|
Shares redeemed |
|
(88,504,142 |
) |
|
(94,936,306 |
) |
|
|
|
|||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
(286,421 |
) |
|
(673,872 |
) |
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
Shares sold |
|
730,158,100 |
|
|
695,223,645 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
5,946,822 |
|
|
3,800,503 |
|
|
Shares redeemed |
|
(724,656,792 |
) |
|
(701,403,269 |
) |
|
|
|
|||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
11,448,130 |
|
|
(2,379,121 |
) |
|
|
|
|||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
11,161,709 |
|
|
(3,052,993 |
) |
|
|
|
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee and/or reimburse certain operating expenses of the Fund. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of their fees. FSSC can modify or terminate this voluntary waiver at any time at their sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
Organizational and/or start-up administrative services expenses of $18,618 were borne initially by the Adviser. The Fund has agreed to reimburse the Adviser for the organizational and/or start-up administrative services expenses during the five-year period following the effective date.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $386,781,000 and $402,560,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 82.7% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 12.5% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Michigan Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Michigan Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
[Graphic Representation Omitted--See Appendix]
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as they become available. To obtain the SAI, the Semi-Annual Report and other information without charge, and make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
[Graphic Representation Omitted--See Appendix]
Michigan Municipal Cash Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N377
G01212-01 (12/00)
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide income exempt from regular income tax and the regular personal income taxes imposed by the state of Minnesota consistent with stability of principal by investing in a portfolio of short-term, high-quality Minnesota tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 8
How to Redeem Shares 9
Account and Share Information 12
Who Manages the Fund? 13
Financial Information 13
Report of Ernst & Young LLP, Independent Auditors 28
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share.The Fund's investment objective is to provide current income exempt from federal regular income tax and the regular personal income tax imposed by the state of Minnesota 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.
The Fund invests in short-term, high-quality Minnesota tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Minnesota regular personal income tax (exempt interest dividends). Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Cash Series Shares total returns on a calendar year-end basis.
The Fund's Shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.56%.
Within the period shown in the Chart, the Fund's Cash Series Shares highest quarterly return was 1.14% (quarter ended March 31, 1991). Its lowest quarterly return was 0.46% (quarter ended March 31, 1994).
The following table represents the Fund's Cash Series Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.64% |
|
5 Years |
|
2.96% |
|
Start of Performance1 |
|
2.88% |
1 The Fund's Cash Series Shares start of performance date was December 31, 1990.
The Fund's Cash Series Shares 7-Day Net Yield as of December 31, 1999 was 3.73%. You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Cash Series Shares of the Fund.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions)
|
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.40% |
|
Distribution (12b-1) Fee3 |
|
0.50% |
|
Shareholder Services Fee |
|
0.25% |
|
Other Expenses |
|
0.16% |
|
Total Annual Fund Operating Expenses |
|
1.31% |
|
1 Although not contractually obligated to do so, the adviser and distributor waived certain amounts during the fiscal year ended October 31, 2000. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waiver of Fund Expenses |
|
0.51% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.80% |
|
2 The adviser voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.14% for the fiscal year ended October 31, 2000. |
||
|
3 The distributor voluntarily waived a portion of the distribution (12b-1) fee for Cash Series Shares. The distributor can terminate this voluntary waiver at any time. The distribution (12b-1) fee paid by the Fund's Cash Series Shares (after the voluntary waiver) was 0.25% for the fiscal year ended October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Cash Series Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Cash Series Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's Cash Series operating expenses are before waivers as shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
|
$ |
133 |
|
|
|||
|
3 Years |
|
$ |
415 |
|
|
|||
|
5 Years |
|
$ |
718 |
|
|
|||
|
10 Years |
|
$ |
1,579 |
|
|
|||
The Fund invests in a portfolio of high-quality Minnesota tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Minnesota regular personal income tax (exempt interest dividends). Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in securities subject to federal income tax and Minnesota regular personal income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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 prices 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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Minnesota issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Minnesota, the Fund may be subject to additional risks compared to funds that invest in multiple states. Minnesota's economy is diversified across the services, trade and manufacturing sectors. The diversity within the manufacturing sector, across instruments and industrial machinery, paper, and food, enables the state to perform well even when the nation is experiencing a decline in manufacturing.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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. When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. 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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
The Fund offers two share classes: Institutional Shares and Cash Series Shares, each representing interests in a single portfolio of securities. This prospectus relates only to Cash Series Shares. Each share class has different expenses, which affect their performance. Contact your investment professional or call 1-800-341-7400 for more information concerning the other class.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to retail customers of financial institutions, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Minnesota taxpayers because it invests in Minnesota municipal securities.
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).
The Fund has adopted a Rule 12b-1 Plan, which allows it to pay marketing fees to the Distributor and investment professionals for the sale, distribution and customer servicing of the Fund's Cash Series 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.
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400 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).
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Minnesota taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 28.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.41 |
% |
|
2.57 |
% |
|
2.93 |
% |
|
2.97 |
% |
|
2.97 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.80 |
% |
|
0.80 |
% |
|
0.80 |
% |
|
0.80 |
% |
|
0.80 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.35 |
% |
|
2.52 |
% |
|
2.89 |
% |
|
2.92 |
% |
|
2.93 |
% |
|
|
|||||||||||||||
|
Expense waiver/reimbursement3 |
|
0.51 |
% |
|
0.50 |
% |
|
0.50 |
% |
|
0.51 |
% |
|
0.51 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$219,903 |
|
$250,226 |
|
$207,599 |
|
$221,227 |
|
$235,614 |
|
||||
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--99.3%1 |
|
|
|
|
|
|
|
Minnesota--99.3% |
|
|
|
|
$ |
6,255,000 |
|
ABN AMRO MuniTOPS Certificates Trust (Minnesota NON-AMT) (Series 2000-8), Weekly VRDNs (Minneapolis/St. Paul, MN Airport Commission)/(FGIC INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) |
|
$ |
6,255,000 |
|
|
5,850,000 |
|
Anoka City, MN Solid Waste Disposal Authority, 4.35% CP (United Power Associates)/(National Rural Utilities Cooperative Finance Corp. GTD), Mandatory Tender 11/8/2000 |
|
|
5,850,000 |
|
|
500,000 |
|
Anoka City, MN Solid Waste Disposal Authority, 4.35% CP (United Power Associates)/(National Rural Utilities Cooperative Finance Corp. GTD), Mandatory Tender 12/1/2000 |
|
|
500,000 |
|
|
3,335,000 |
|
Apple Valley, MN, IDRB (Series 1995), Weekly VRDNs (AV Development Co. Project)/(Firstar Bank, N.A. LOC) |
|
|
3,335,000 |
|
|
7,225,000 |
|
Avon, MN, (Series 1998), Weekly VRDNs (Vesper Corp.)/(KeyBank, N.A. LOC) |
|
|
7,225,000 |
|
|
1,130,000 |
|
Barnesville, MN ISD #146, 4.75% TANs (Minnesota State GTD), 3/1/2001 |
|
|
1,131,245 |
|
|
6,900,000 |
|
Becker, MN, (Series 2000-A), Weekly VRDNs (Northern States Power Co.) |
|
|
6,900,000 |
|
|
2,000,000 |
|
Becker, MN, PCR (Series 1993-B), 4.40% CP (Northern States Power Co.), Mandatory Tender 11/6/2000 |
|
|
2,000,000 |
|
|
2,800,000 |
|
Becker, MN, PCR (Series 1993-B), 4.45% CP (Northern States Power Co.), Mandatory Tender 11/8/2000 |
|
|
2,800,000 |
|
|
2,855,000 |
|
Blaine, MN, IDRBs (Series 1996), Weekly VRDNs (S & S of Minnesota LLC)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,855,000 |
|
|
1,900,000 |
|
Bloomington, MN, IDRB (Series 1995), Weekly VRDNs (Now Technologies, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
1,900,000 |
|
|
5,000,000 |
|
Bloomington, MN, Multifamily Housing Weekly VRDNs (Crow/Bloomington Apartments)/(Citibank N.A., New York LOC) |
|
|
5,000,000 |
|
|
3,600,000 |
|
Brooklyn Center, MN, Shingle Creek Tower (Series 1999), 5.51% TOBs (Bank of America, N.A.), Optional Tender 5/1/2001 |
|
|
3,600,000 |
|
|
9,485,000 |
|
Burnsville, MN, Variable Rate Demand Revenue Bonds (Series 1996), Weekly VRDNs (YMCA)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
9,485,000 |
|
|
2,640,000 |
|
Burnsville, MN, Adjustable Rate IDRB (Series 1996), Weekly VRDNs (Caire, Inc.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
2,640,000 |
|
|
2,810,000 |
|
Byron, MN Weekly VRDNs (Schmidt Printing)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,810,000 |
|
|
1,130,000 |
|
Chanhassen, MN IDA, (Series 1995), Weekly VRDNs (Building Management Group LLC)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
1,130,000 |
|
|
1,320,000 |
|
Chaska, MN, Aspen Oaks Apartments (Series 2000), 5.70% TOBs (HSBC Bank USA LOC), Mandatory Tender 5/1/2001 |
|
|
1,320,000 |
|
|
4,550,000 |
|
Cohasset, MN, (Series 2000), Weekly VRDNs (Minnesota Power, Inc.)/(ABN AMRO Bank N.V., Amsterdam LOC) |
|
|
4,550,000 |
|
|
2,805,000 |
|
Coon Rapids, MN, (Series 1996), Weekly VRDNs (Medical Enterprise Associates)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,805,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Minnesota--continued |
|
|
|
|
$ |
2,350,000 |
|
Cottage Grove, MN, IDR Refunding Bonds (Series 1995), Weekly VRDNs (Supervalu, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
$ |
2,350,000 |
|
|
20,940,000 |
|
Dakota County & Washington County, MN Housing & Redevelopment Authority, MERLOTs (Series J), Weekly VRDNs (United States Treasury COL)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
20,940,000 |
|
|
9,250,000 |
|
Dakota County, MN Community Development Agency, (2000 Series C), 4.30% TOBs (AIG Funding, Inc. INV), Mandatory Tender 4/1/2001 |
|
|
9,250,000 |
|
|
18,680,000 |
|
Dakota County, Washington County, & Anoka City, MN Housing & Redevelopment Authority, MERLOTs (Series H), Weekly VRDNs (United States Treasury COL)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
18,680,000 |
|
|
2,100,000 |
|
Duluth, MN, (Series 1985), Weekly VRDNs (Wachovia Bank of NC, N.A. LOC) |
|
|
2,100,000 |
|
|
9,000,000 |
|
Duluth, MN, 4.50% TANs, 12/29/2000 |
|
|
9,003,443 |
|
|
755,000 |
|
Eden Prairie, MN IDA, #194 Weekly VRDNs (Richard W. Cohen)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
755,000 |
|
|
990,000 |
|
Eden Prairie, MN IDA (Series 1996), Weekly VRDNs (Challenge Printing, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
990,000 |
|
|
1,260,000 |
|
Eden Prairie, MN IDA (Series 1995), Weekly VRDNs (Robert Lothenbach)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
1,260,000 |
|
|
4,400,000 |
|
Edgerton, MN (Series 1998), Weekly VRDNs (Fey Industries, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
4,400,000 |
|
|
2,895,000 |
|
Elk River, MN ISD # 728, 4.44% TRANs (Minnesota State GTD), 8/27/2001 |
|
|
2,895,896 |
|
|
325,000 |
|
Elk River, MN Weekly VRDNs (Tescom Corp.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
325,000 |
|
|
5,000,000 |
|
Faribault, MN IDA (Series 1988), Weekly VRDNs (Jerome Foods)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
5,000,000 |
|
|
2,795,000 |
|
Farmington, MN (Series 1996), Weekly VRDNs (Lexington Standard Corp.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,795,000 |
|
|
3,200,000 |
|
Hennepin County, MN (Series 1995C), Weekly VRDNs |
|
|
3,200,000 |
|
|
5,850,000 |
|
Hennepin County, MN (Series 1996C), Weekly VRDNs |
|
|
5,850,000 |
|
|
1,995,000 |
|
Lakeville, MN ISD #194, 4.53% TRANs (Minnesota State GTD), 9/24/2001 |
|
|
1,996,338 |
|
|
4,800,000 |
|
Lino Lakes, MN, Variable Rate Demand IDRBs (Series 1997), Weekly VRDNs (Taylor Corp.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
4,800,000 |
|
|
2,700,000 |
|
Maple Grove, MN, Variable Rate Demand IDRBs (Series 1998), Weekly VRDNs (Spancrete Midwest Co.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,700,000 |
|
|
850,000 |
|
Maplewood, MN, (Series 1997), Weekly VRDNs (Camada LP)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
850,000 |
|
|
8,125,000 |
|
Mendota Heights, MN (Series 1999), Weekly VRDNs (St. Thomas Academy)/(Allied Irish Banks PLC LOC) |
|
|
8,125,000 |
|
|
6,500,000 |
|
Minneapolis, MN (Series 1993), Weekly VRDNs (Market Square Real Estate, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
6,500,000 |
|
|
5,500,000 |
|
Minneapolis, MN, Housing Development Revenue Refunding Bonds (Series 1988), Weekly VRDNs (Symphony Place)/(FHLMC LOC) |
|
|
5,500,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Minnesota--continued |
|
|
|
|
$ |
800,000 |
|
Minneapolis, MN, Variable Rate Demand Commercial Development Revenue Refunding Bonds (Series 1996), Weekly VRDNs (WNB & Co.)/(U.S. Bank, N.A., Minneapolis LOC) |
|
$ |
800,000 |
|
|
1,800,000 |
2 |
Minneapolis/St. Paul, MN Housing Finance Board, SFM Revenue Bonds, MERLOTS (Series D), 4.65% TOBs (GNMA COL)/(First Union National Bank, Charlotte, NC LIQ), Optional Tender 8/1/2001 |
|
|
1,800,000 |
|
|
9,935,000 |
2 |
Minneapolis/St. Paul, MN Metropolitan Airports Commission, (PT-1174), 3.35% TOBs (FGIC INS)/(Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 2/8/2001 |
|
|
9,935,000 |
|
|
3,000,000 |
|
Minneapolis/St. Paul, MN Metropolitan Airports Commission, Floating Rate Trust Receipts, FR/RI-A33, Weekly VRDNs (FGIC INS)/(Bank of New York, New York LIQ) |
|
|
3,000,000 |
|
|
8,000,000 |
|
Minnesota Agricultural and Economic Development Board, (Series 1996), Weekly VRDNs (Evangelical Lutheran Good Samaritan Society)/(Rabobank Nederland, Utrecht LOC) |
|
|
8,000,000 |
|
|
10,975,000 |
2 |
Minnesota Public Facilities Authority, (PT-1175), 4.45% TOBs (Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 8/9/2001 |
|
|
10,975,000 |
|
|
8,000,000 |
|
Minnesota State Commissioner of Iron Range Resources & Rehabilitation, (Series 1991), Weekly VRDNs (Louisiana-Pacific Corp.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
8,000,000 |
|
|
4,970,000 |
|
Minnesota State HFA, (PA-671), Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) |
|
|
4,970,000 |
|
|
4,995,000 |
2 |
Minnesota State HFA, (Series 1998C), (PT-204), 4.70% TOBs (Bayerische Hypotheken-und Vereinsbank AG LIQ), Optional Tender 11/9/2000 |
|
|
4,995,000 |
|
|
4,500,000 |
|
Minnesota State HFA, (Series D), 4.30% Bonds, 5/1/2001 |
|
|
4,500,000 |
|
|
3,200,000 |
|
Minnesota State HFA, (Series E), 4.35% Bonds, 5/1/2001 |
|
|
3,200,000 |
|
|
5,175,000 |
|
Minnesota State Higher Education Coordinating Board, (Series 1992-B),Weekly VRDNs (U.S. Bank, N.A., Minneapolis LIQ) |
|
|
5,175,000 |
|
|
4,500,000 |
|
Minnesota State Higher Education Coordinating Board, (Series 1998-C), Weekly VRDNs (U.S. Bank, N.A., Minneapolis LIQ) |
|
|
4,500,000 |
|
|
10,700,000 |
|
Minnesota State Higher Education Coordinating Board, (Series 1993), Weekly VRDNs (U.S. Bank, N.A., Minneapolis LIQ) |
|
|
10,700,000 |
|
|
5,000,000 |
|
Minnesota State Higher Education Facility Authority, (Series Five-C), Weekly VRDNs (University of St. Thomas)/(Allied Irish Banks PLC LOC) |
|
|
5,000,000 |
|
|
5,750,000 |
|
Minnesota State Higher Education Facility Authority, (Series Four-S), Weekly VRDNs (Bethel College and Seminary)/(Allied Irish Banks PLC LOC) |
|
|
5,750,000 |
|
|
16,125,000 |
2 |
Minnesota State, (PT-399), 4.50% TOBs (Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 6/14/2001 |
|
|
16,125,000 |
|
|
10,000,000 |
2 |
Minnesota State, (PT-400), 4.50% TOBs (Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 6/14/2001 |
|
|
10,000,000 |
|
|
3,625,000 |
|
Minnesota State, 5.00% Bonds, 11/1/2000 |
|
|
3,625,000 |
|
|
655,000 |
|
Minnetonka, MN, IDRB (Series 1996), Weekly VRDNs (PGI Cos., Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
655,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Minnesota--continued |
|
|
|
|
$ |
5,900,000 |
|
Minnetonka, MN, Multifamily Housing Revenue Refunding Bonds (Series 1995), Weekly VRDNs (Southampton Apartments (MN))/(National Bank of Canada, Montreal LOC) |
|
$ |
5,900,000 |
|
|
1,300,000 |
|
New Brighton, MN, IDR Weekly VRDNs (Unicare Homes, Inc.)/(Paribas, Paris LOC) |
|
|
1,300,000 |
|
|
800,000 |
|
New Hope, MN IDRB, (Series 1994), Weekly VRDNs (Gaines and Hanson Printing Co.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
800,000 |
|
|
2,670,000 |
|
New Hope, MN Weekly VRDNs (Paddock Labs)/(U.S. Bank, N.A., Minneapolis LOC) |
|
|
2,670,000 |
|
|
4,995,000 |
|
Northern Municipal Power Agency, MN, Floater Certificates (Series 1998-46), Weekly VRDNs (FSA INS)/(Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ) |
|
|
4,995,000 |
|
|
6,000,000 |
|
Oak Park Heights, MN, Elderly Housing Revenue Bonds (Series 1998B), 5.89% TOBs (Bayerische Landesbank Girozentrale), Mandatory Tender 12/1/2000 |
|
|
6,000,000 |
|
|
1,865,000 |
|
Paynesville, MN ISD #741, 4.55% TRANs (Minnesota State GTD), 9/15/2001 |
|
|
1,867,321 |
|
|
1,080,000 |
|
Plymouth, MN Weekly VRDNs (Nuaire, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
1,080,000 |
|
|
1,100,000 |
|
Plymouth, MN, (Series 2000), Weekly VRDNs (Nuaire, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
1,100,000 |
|
|
2,500,000 |
|
Plymouth, MN, IDRB (Series 1994), Weekly VRDNs (Olympic Steel, Inc.)/(National City Bank, Ohio LOC) |
|
|
2,500,000 |
|
|
1,160,000 |
|
Port Authority of Saint Paul, MN, (Series 1998A), Weekly VRDNs (Bix Fruit Co.)/(Firstar Bank, N.A. LOC) |
|
|
1,160,000 |
|
|
2,500,000 |
|
Port Authority of Saint Paul, MN, Variable Rate Demand IDRB's (Series 1998A), Weekly VRDNs (National Checking Co.)/(U.S. Bank, N.A., Minneapolis LOC) |
|
|
2,500,000 |
|
|
415,000 |
|
Port of Austin, MN Weekly VRDNs (Mower House Color)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
415,000 |
|
|
7,000,000 |
|
Rochester, MN Health Care Facility Authority, (Series 1998-177), Weekly VRDNs (Mayo Foundation)/(Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ) |
|
|
7,000,000 |
|
|
5,400,000 |
|
Rockford, MN, (Series 1999), Weekly VRDNs (Minnesota Diversified Products, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
5,400,000 |
|
|
2,275,000 |
|
Rogers, MN IDA, IDRB Weekly VRDNs (DAC Development LLC Project)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,275,000 |
|
|
14,000,000 |
|
Seaway Port Authority of Duluth, MN, (Series of 2000), Weekly VRDNs (St. Lawrence Cement, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
14,000,000 |
|
|
2,000,000 |
|
Shakopee, MN Hospital Finance Authority Weekly VRDNs (St. Francis Regional Medical Center)/(Citibank N.A., New York LOC) |
|
|
2,000,000 |
|
|
8,000,000 |
|
Southern Minnesota Municipal Power Agency, 4.20% CP, Mandatory Tender 12/1/2000 |
|
|
8,000,000 |
|
|
7,400,000 |
|
Southern Minnesota Municipal Power Agency, 4.35% CP, Mandatory Tender 2/9/2001 |
|
|
7,400,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Minnesota--continued |
|
|
|
|
$ |
665,000 |
|
St. Cloud, MN Housing & Redevelopment Authority, Revenue Refunding Bonds (Series 1994A), Weekly VRDNs (Coborn's, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
$ |
665,000 |
|
|
1,672,500 |
|
St. Cloud, MN Housing & Redevelopment Authority, Revenue Refunding Bonds (Series 1994B), Weekly VRDNs (Coborn's, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
1,672,500 |
|
|
9,400,000 |
|
St. Louis Park, MN Health Care Facilities, Floating Rate Monthly Demand IDRB's (Series 1984), Weekly VRDNs (Unicare Homes, Inc.)/(Paribas, Paris LOC) |
|
|
9,400,000 |
|
|
5,040,000 |
|
St. Michael, MN, (Series 1999), Weekly VRDNs (TC/American Monorail, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
5,040,000 |
|
|
4,400,000 |
|
St. Paul, MN Housing & Redevelopment Authority Weekly VRDNs (District Cooling St Paul, Inc.)/(Dexia Credit Local de France LOC) |
|
|
4,400,000 |
|
|
400,000 |
|
St. Paul, MN Housing & Redevelopment Authority Weekly VRDNs (United Way)/(U.S. Bank, NA, Minneapolis LOC) |
|
|
400,000 |
|
|
2,000,000 |
|
St. Paul, MN Housing & Redevelopment Authority, (1995 Series I), Weekly VRDNs (District Cooling St Paul, Inc.)/(Dexia Credit Local de France LOC) |
|
|
2,000,000 |
|
|
50,000,000 |
|
University of Minnesota, (Series 1999A), Weekly VRDNs |
|
|
50,000,000 |
|
|
2,090,000 |
|
Victoria, MN, (Series 1996A), Weekly VRDNs (HEI, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,090,000 |
|
|
1,045,000 |
|
Victoria, MN, (Series 1996B), Weekly VRDNs (HEI, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
1,045,000 |
|
|
1,800,000 |
|
Wells, MN, 4.80% TOBs (Stokely, Inc.)/(First Union National Bank, Charlotte, NC LOC), Optional Tender 12/1/2000 |
|
|
1,800,000 |
|
|
700,000 |
|
White Bear, MN Weekly VRDNs (Thermoform Plastic, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
700,000 |
|
|
1,875,000 |
|
White Bear, MN, Variable Rate Demand Industrial Revenue Bonds Weekly VRDNs (N.A. Ternes)/(Firstar Bank, N.A. LOC) |
|
|
1,875,000 |
|
|
4,100,000 |
|
Winnebago, MN, (Series 1999), Weekly VRDNs (Dixie Carbonic, Inc.)/(Bank One, Illinois, N.A. LOC) |
|
|
4,100,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
|
$ |
479,611,743 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 41.4% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
100.00% |
|
0.00% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $53,830,000, which represents 11.1% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($482,878,308) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMT |
--Alternative Minimum Tax |
|
COL |
--Collateralized |
|
CP |
--Commercial Paper |
|
FGIC |
--Financial Guaranty Insurance Company |
|
FSA |
--Financial Security Assurance |
|
FHLMC |
-- Federal Home Loan Mortgage Corp. |
|
GNMA |
--Government National Mortgage Association |
|
GTD |
--Guaranteed |
|
HFA |
--Housing Finance Authority |
|
IDA |
--Industrial Development Authority |
|
IDR |
--Industrial Development Revenue |
|
IDRB |
--Industrial Development Revenue Bond |
|
INS |
--Insured |
|
INV |
--Investment Agreement |
|
ISD |
--Independent School District |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
PCR |
--Pollution Control Revenue |
|
SFM |
--Single Family Mortgage |
|
TANs |
--Tax Anticipation Notes |
|
TOBs |
--Tender Option Bonds |
|
TRANs |
--Tax and Revenue Anticipation Notes |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
479,611,743 |
|
Cash |
|
|
|
|
|
541,120 |
|
Income receivable |
|
|
|
|
|
3,804,889 |
|
Receivable for shares sold |
|
|
|
|
|
49,752 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
484,007,504 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
151,280 |
|
|
|
|
Income distribution payable |
|
|
898,098 |
|
|
|
|
Accrued expenses |
|
|
79,818 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
1,129,196 |
|
|
||||||
|
Net assets for 482,878,308 shares outstanding |
|
|
|
|
$ |
482,878,308 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
$262,975,406 ÷ 262,975,406 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Cash Series Shares: |
|
|
|
|
|
|
|
$219,902,902 ÷ 219,902,902 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
21,712,008 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
2,095,727 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
394,572 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
28,835 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
176,855 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
5,214 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,552 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
14,026 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
105,205 |
|
|
|
|
|
Distribution services fee--Cash Series Shares |
|
|
|
|
|
|
1,290,575 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
664,542 |
|
|
|
|
|
Shareholder services fee--Cash Series Shares |
|
|
|
|
|
|
645,287 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
32,752 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
26,608 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
30,513 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
4,034 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
5,526,297 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(1,338,376 |
) |
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Cash Series Shares |
|
|
(645,287 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(664,542 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(2,648,205 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
2,878,092 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
18,833,916 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
||
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
18,833,916 |
|
|
$ |
15,621,642 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(10,198,578 |
) |
|
|
(9,461,048 |
) |
|
Cash Series Shares |
|
|
(8,635,338 |
) |
|
|
(6,160,594 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(18,833,916 |
) |
|
|
(15,621,642 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
1,240,876,579 |
|
|
|
1,431,126,325 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
9,129,484 |
|
|
|
6,502,602 |
|
|
Cost of shares redeemed |
|
|
(1,302,893,395 |
) |
|
|
(1,437,969,499 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(52,887,332 |
) |
|
|
(340,572 |
) |
|
|
||||||||
|
Change in net assets |
|
|
(52,887,332 |
) |
|
|
(340,572 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
535,765,640 |
|
|
|
536,106,212 |
|
|
|
||||||||
|
End of period |
|
$ |
482,878,308 |
|
|
$ |
535,765,640 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Effective February 1, 2000, Minnesota Municipal Cash Trust (the "Fund") became a portfolio of the Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Shares and Cash Series Shares. The investment objective of the Fund is current income exempt from federal regular income tax and the regular personal income taxes imposed by the State of Minnesota consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees ("Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At October 31, 2000, capital paid-in aggregated $482,878,308.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
649,061,460 |
|
|
761,059,176 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
772,535 |
|
|
429,923 |
|
|
Shares redeemed |
|
(672,398,621 |
) |
|
(804,456,292 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
(22,564,626 |
) |
|
(42,967,193 |
) |
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Cash Series Shares: |
|
|
|
|
|
|
|
Shares sold |
|
591,815,119 |
|
|
670,067,149 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
8,356,949 |
|
|
6,072,679 |
|
|
Shares redeemed |
|
(630,494,774 |
) |
|
(633,513,207 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM CASH SERIES SHARE TRANSACTIONS |
|
(30,322,706 |
) |
|
42,626,621 |
|
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(52,887,332 |
) |
|
(340,572 |
) |
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Funds with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Cash Series Shares. The Plan provides that the Fund may incur distribution expenses up to 0.50% of the average daily net assets of the Cash Series Shares, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $841,159,000 and $765,169,000 respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 46.7% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 15.5% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Minnesota Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Minnesota Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as they become available. To obtain the SAI, Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Minnesota Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N484
0082715A-CSS (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide income exempt from federal regular income tax and the regular personal income taxes imposed by the state of Minnesota consistent with stability of principal by investing in a portfolio of short-term, high-quality Minnesota tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 8
How to Redeem Shares 9
Account and Share Information 12
Who Manages the Fund? 13
Financial Information 13
Report of Ernst & Young LLP, Independent Auditors 28
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and the regular personal income taxes imposed by the state of Minnesota 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.
The Fund invests in short-term, high-quality Minnesota tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Minnesota regular personal income tax (exempt interest dividends). Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Shares total returns on a calendar year-end basis.
The Fund's Shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.95%.
Within the period shown in the Chart, the Fund's Institutional Shares highest quarterly return was 1.20% (quarter ended March 31, 1991). Its lowest quarterly return was 0.56% (quarter ended March 31, 1994).
The following table represents the Fund's Institutional Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
3.15% |
|
5 Years |
|
3.46% |
|
Start of Performance1 |
|
3.43% |
1 The Fund's Institutional Shares start of performance date was September 10, 1990.
The Fund's Institutional Shares 7-Day Net Yield as of December 31, 1999 was 4.23%. You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the Fund.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions)
|
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.40% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee3 |
|
0.25% |
|
Other Expenses |
|
0.16% |
|
Total Annual Fund Operating Expenses |
|
0.81% |
|
1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts during the fiscal year ended October 31, 2000. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waivers of Fund Expenses |
|
0.51% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.30% |
|
2 The adviser voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.14% for the fiscal year ended October 31, 2000. |
||
|
3 The shareholder services provider voluntarily waived the shareholder services fee. The shareholder services provider can terminate this voluntary waiver at any time. The shareholder services fee paid by the Fund's Institutional Shares (after the voluntary waiver) was 0.00% for the fiscal year ended October 31, 2000. |
||
This 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 shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
|
$ |
83 |
|
|
|||
|
3 Years |
|
$ |
259 |
|
|
|||
|
5 Years |
|
$ |
450 |
|
|
|||
|
10 Years |
|
$ |
1,002 |
|
|
|||
The Fund invests in a portfolio of high-quality Minnesota tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Minnesota regular personal income tax (exempt interest dividends). Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in securities subject to federal income tax and Minnesota regular personal income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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 prices 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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Minnesota issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Minnesota, the Fund may be subject to additional risks compared to funds that invest in multiple states. Minnesota's economy is diversified across the services, trade and manufacturing sectors. The diversity within the manufacturing sector, across instruments and industrial machinery, paper, and food, enables the state to perform well even when the nation is experiencing a decline in manufacturing.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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. When the Fund receives your transaction request in proper form (as described in this prospectus) it is processed at the next determined NAV. 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.
The Fund offers two share classes: Institutional Shares and Cash Series 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, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Minnesota taxpayers because it invests in Minnesota municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400 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.
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
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.
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.
You will receive periodic statements reporting all account activity, including dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Minnesota taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 28.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.04 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.04 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.93 |
% |
|
3.08 |
% |
|
3.44 |
% |
|
3.48 |
% |
|
3.49 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.30 |
% |
|
0.30 |
% |
|
0.30 |
% |
|
0.30 |
% |
|
0.30 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.84 |
% |
|
3.02 |
% |
|
3.39 |
% |
|
3.42 |
% |
|
3.43 |
% |
|
|
|||||||||||||||
|
Expense waiver/reimbursement3 |
|
0.51 |
% |
|
0.50 |
% |
|
0.50 |
% |
|
0.51 |
% |
|
0.51 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$262,975 |
|
$285,540 |
|
$328,507 |
|
$208,365 |
|
$217,443 |
|
||||
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--99.3%1 |
|
|
|
|
|
|
|
Minnesota--99.3% |
|
|
|
|
$ |
6,255,000 |
|
ABN AMRO MuniTOPS Certificates Trust (Minnesota NON-AMT) (Series 2000-8), Weekly VRDNs (Minneapolis/St. Paul, MN Airport Commission)/(FGIC INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) |
|
$ |
6,255,000 |
|
|
5,850,000 |
|
Anoka City, MN Solid Waste Disposal Authority, 4.35% CP (United Power Associates)/(National Rural Utilities Cooperative Finance Corp. GTD), Mandatory Tender 11/8/2000 |
|
|
5,850,000 |
|
|
500,000 |
|
Anoka City, MN Solid Waste Disposal Authority, 4.35% CP (United Power Associates)/(National Rural Utilities Cooperative Finance Corp. GTD), Mandatory Tender 12/1/2000 |
|
|
500,000 |
|
|
3,335,000 |
|
Apple Valley, MN, IDRB (Series 1995), Weekly VRDNs (AV Development Co. Project)/(Firstar Bank, N.A. LOC) |
|
|
3,335,000 |
|
|
7,225,000 |
|
Avon, MN, (Series 1998), Weekly VRDNs (Vesper Corp.)/(KeyBank, N.A. LOC) |
|
|
7,225,000 |
|
|
1,130,000 |
|
Barnesville, MN ISD #146, 4.75% TANs (Minnesota State GTD), 3/1/2001 |
|
|
1,131,245 |
|
|
6,900,000 |
|
Becker, MN, (Series 2000-A), Weekly VRDNs (Northern States Power Co.) |
|
|
6,900,000 |
|
|
2,000,000 |
|
Becker, MN, PCR (Series 1993-B), 4.40% CP (Northern States Power Co.), Mandatory Tender 11/6/2000 |
|
|
2,000,000 |
|
|
2,800,000 |
|
Becker, MN, PCR (Series 1993-B), 4.45% CP (Northern States Power Co.), Mandatory Tender 11/8/2000 |
|
|
2,800,000 |
|
|
2,855,000 |
|
Blaine, MN, IDRBs (Series 1996), Weekly VRDNs (S & S of Minnesota LLC)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,855,000 |
|
|
1,900,000 |
|
Bloomington, MN, IDRB (Series 1995), Weekly VRDNs (Now Technologies, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
1,900,000 |
|
|
5,000,000 |
|
Bloomington, MN, Multifamily Housing Weekly VRDNs (Crow/Bloomington Apartments)/(Citibank N.A., New York LOC) |
|
|
5,000,000 |
|
|
3,600,000 |
|
Brooklyn Center, MN, Shingle Creek Tower (Series 1999), 5.51% TOBs (Bank of America, N.A.), Optional Tender 5/1/2001 |
|
|
3,600,000 |
|
|
9,485,000 |
|
Burnsville, MN, Variable Rate Demand Revenue Bonds (Series 1996), Weekly VRDNs (YMCA)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
9,485,000 |
|
|
2,640,000 |
|
Burnsville, MN, Adjustable Rate IDRB (Series 1996), Weekly VRDNs (Caire, Inc.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
2,640,000 |
|
|
2,810,000 |
|
Byron, MN Weekly VRDNs (Schmidt Printing)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,810,000 |
|
|
1,130,000 |
|
Chanhassen, MN IDA, (Series 1995), Weekly VRDNs (Building Management Group LLC)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
1,130,000 |
|
|
1,320,000 |
|
Chaska, MN, Aspen Oaks Apartments (Series 2000), 5.70% TOBs (HSBC Bank USA LOC), Mandatory Tender 5/1/2001 |
|
|
1,320,000 |
|
|
4,550,000 |
|
Cohasset, MN, (Series 2000), Weekly VRDNs (Minnesota Power, Inc.)/(ABN AMRO Bank N.V., Amsterdam LOC) |
|
|
4,550,000 |
|
|
2,805,000 |
|
Coon Rapids, MN, (Series 1996), Weekly VRDNs (Medical Enterprise Associates)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,805,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Minnesota--continued |
|
|
|
|
$ |
2,350,000 |
|
Cottage Grove, MN, IDR Refunding Bonds (Series 1995), Weekly VRDNs (Supervalu, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
$ |
2,350,000 |
|
|
20,940,000 |
|
Dakota County & Washington County, MN Housing & Redevelopment Authority, MERLOTs (Series J), Weekly VRDNs (United States Treasury COL)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
20,940,000 |
|
|
9,250,000 |
|
Dakota County, MN Community Development Agency, (2000 Series C), 4.30% TOBs (AIG Funding, Inc. INV), Mandatory Tender 4/1/2001 |
|
|
9,250,000 |
|
|
18,680,000 |
|
Dakota County, Washington County, & Anoka City, MN Housing & Redevelopment Authority, MERLOTs (Series H), Weekly VRDNs (United States Treasury COL)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
18,680,000 |
|
|
2,100,000 |
|
Duluth, MN, (Series 1985), Weekly VRDNs (Wachovia Bank of NC, N.A. LOC) |
|
|
2,100,000 |
|
|
9,000,000 |
|
Duluth, MN, 4.50% TANs, 12/29/2000 |
|
|
9,003,443 |
|
|
755,000 |
|
Eden Prairie, MN IDA, #194 Weekly VRDNs (Richard W. Cohen)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
755,000 |
|
|
990,000 |
|
Eden Prairie, MN IDA (Series 1996), Weekly VRDNs (Challenge Printing, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
990,000 |
|
|
1,260,000 |
|
Eden Prairie, MN IDA (Series 1995), Weekly VRDNs (Robert Lothenbach)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
1,260,000 |
|
|
4,400,000 |
|
Edgerton, MN (Series 1998), Weekly VRDNs (Fey Industries, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
4,400,000 |
|
|
2,895,000 |
|
Elk River, MN ISD # 728, 4.44% TRANs (Minnesota State GTD), 8/27/2001 |
|
|
2,895,896 |
|
|
325,000 |
|
Elk River, MN Weekly VRDNs (Tescom Corp.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
325,000 |
|
|
5,000,000 |
|
Faribault, MN IDA (Series 1988), Weekly VRDNs (Jerome Foods)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
5,000,000 |
|
|
2,795,000 |
|
Farmington, MN (Series 1996), Weekly VRDNs (Lexington Standard Corp.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,795,000 |
|
|
3,200,000 |
|
Hennepin County, MN (Series 1995C), Weekly VRDNs |
|
|
3,200,000 |
|
|
5,850,000 |
|
Hennepin County, MN (Series 1996C), Weekly VRDNs |
|
|
5,850,000 |
|
|
1,995,000 |
|
Lakeville, MN ISD #194, 4.53% TRANs (Minnesota State GTD), 9/24/2001 |
|
|
1,996,338 |
|
|
4,800,000 |
|
Lino Lakes, MN, Variable Rate Demand IDRBs (Series 1997), Weekly VRDNs (Taylor Corp.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
4,800,000 |
|
|
2,700,000 |
|
Maple Grove, MN, Variable Rate Demand IDRBs (Series 1998), Weekly VRDNs (Spancrete Midwest Co.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,700,000 |
|
|
850,000 |
|
Maplewood, MN, (Series 1997), Weekly VRDNs (Camada LP)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
850,000 |
|
|
8,125,000 |
|
Mendota Heights, MN (Series 1999), Weekly VRDNs (St. Thomas Academy)/(Allied Irish Banks PLC LOC) |
|
|
8,125,000 |
|
|
6,500,000 |
|
Minneapolis, MN (Series 1993), Weekly VRDNs (Market Square Real Estate, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
6,500,000 |
|
|
5,500,000 |
|
Minneapolis, MN, Housing Development Revenue Refunding Bonds (Series 1988), Weekly VRDNs (Symphony Place)/(FHLMC LOC) |
|
|
5,500,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Minnesota--continued |
|
|
|
|
$ |
800,000 |
|
Minneapolis, MN, Variable Rate Demand Commercial Development Revenue Refunding Bonds (Series 1996), Weekly VRDNs (WNB & Co.)/(U.S. Bank, N.A., Minneapolis LOC) |
|
$ |
800,000 |
|
|
1,800,000 |
2 |
Minneapolis/St. Paul, MN Housing Finance Board, SFM Revenue Bonds, MERLOTS (Series D), 4.65% TOBs (GNMA COL)/(First Union National Bank, Charlotte, NC LIQ), Optional Tender 8/1/2001 |
|
|
1,800,000 |
|
|
9,935,000 |
2 |
Minneapolis/St. Paul, MN Metropolitan Airports Commission, (PT-1174), 3.35% TOBs (FGIC INS)/(Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 2/8/2001 |
|
|
9,935,000 |
|
|
3,000,000 |
|
Minneapolis/St. Paul, MN Metropolitan Airports Commission, Floating Rate Trust Receipts, FR/RI-A33, Weekly VRDNs (FGIC INS)/(Bank of New York, New York LIQ) |
|
|
3,000,000 |
|
|
8,000,000 |
|
Minnesota Agricultural and Economic Development Board, (Series 1996), Weekly VRDNs (Evangelical Lutheran Good Samaritan Society)/(Rabobank Nederland, Utrecht LOC) |
|
|
8,000,000 |
|
|
10,975,000 |
2 |
Minnesota Public Facilities Authority, (PT-1175), 4.45% TOBs (Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 8/9/2001 |
|
|
10,975,000 |
|
|
8,000,000 |
|
Minnesota State Commissioner of Iron Range Resources & Rehabilitation, (Series 1991), Weekly VRDNs (Louisiana-Pacific Corp.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
8,000,000 |
|
|
4,970,000 |
|
Minnesota State HFA, (PA-671), Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) |
|
|
4,970,000 |
|
|
4,995,000 |
2 |
Minnesota State HFA, (Series 1998C), (PT-204), 4.70% TOBs (Bayerische Hypotheken-und Vereinsbank AG LIQ), Optional Tender 11/9/2000 |
|
|
4,995,000 |
|
|
4,500,000 |
|
Minnesota State HFA, (Series D), 4.30% Bonds, 5/1/2001 |
|
|
4,500,000 |
|
|
3,200,000 |
|
Minnesota State HFA, (Series E), 4.35% Bonds, 5/1/2001 |
|
|
3,200,000 |
|
|
5,175,000 |
|
Minnesota State Higher Education Coordinating Board, (Series 1992-B),Weekly VRDNs (U.S. Bank, N.A., Minneapolis LIQ) |
|
|
5,175,000 |
|
|
4,500,000 |
|
Minnesota State Higher Education Coordinating Board, (Series 1998-C), Weekly VRDNs (U.S. Bank, N.A., Minneapolis LIQ) |
|
|
4,500,000 |
|
|
10,700,000 |
|
Minnesota State Higher Education Coordinating Board, (Series 1993), Weekly VRDNs (U.S. Bank, N.A., Minneapolis LIQ) |
|
|
10,700,000 |
|
|
5,000,000 |
|
Minnesota State Higher Education Facility Authority, (Series Five-C), Weekly VRDNs (University of St. Thomas)/(Allied Irish Banks PLC LOC) |
|
|
5,000,000 |
|
|
5,750,000 |
|
Minnesota State Higher Education Facility Authority, (Series Four-S), Weekly VRDNs (Bethel College and Seminary)/(Allied Irish Banks PLC LOC) |
|
|
5,750,000 |
|
|
16,125,000 |
2 |
Minnesota State, (PT-399), 4.50% TOBs (Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 6/14/2001 |
|
|
16,125,000 |
|
|
10,000,000 |
2 |
Minnesota State, (PT-400), 4.50% TOBs (Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 6/14/2001 |
|
|
10,000,000 |
|
|
3,625,000 |
|
Minnesota State, 5.00% Bonds, 11/1/2000 |
|
|
3,625,000 |
|
|
655,000 |
|
Minnetonka, MN, IDRB (Series 1996), Weekly VRDNs (PGI Cos., Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
655,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Minnesota--continued |
|
|
|
|
$ |
5,900,000 |
|
Minnetonka, MN, Multifamily Housing Revenue Refunding Bonds (Series 1995), Weekly VRDNs (Southampton Apartments (MN))/(National Bank of Canada, Montreal LOC) |
|
$ |
5,900,000 |
|
|
1,300,000 |
|
New Brighton, MN, IDR Weekly VRDNs (Unicare Homes, Inc.)/(Paribas, Paris LOC) |
|
|
1,300,000 |
|
|
800,000 |
|
New Hope, MN IDRB, (Series 1994), Weekly VRDNs (Gaines and Hanson Printing Co.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
800,000 |
|
|
2,670,000 |
|
New Hope, MN Weekly VRDNs (Paddock Labs)/(U.S. Bank, N.A., Minneapolis LOC) |
|
|
2,670,000 |
|
|
4,995,000 |
|
Northern Municipal Power Agency, MN, Floater Certificates (Series 1998-46), Weekly VRDNs (FSA INS)/(Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ) |
|
|
4,995,000 |
|
|
6,000,000 |
|
Oak Park Heights, MN, Elderly Housing Revenue Bonds (Series 1998B), 5.89% TOBs (Bayerische Landesbank Girozentrale), Mandatory Tender 12/1/2000 |
|
|
6,000,000 |
|
|
1,865,000 |
|
Paynesville, MN ISD #741, 4.55% TRANs (Minnesota State GTD), 9/15/2001 |
|
|
1,867,321 |
|
|
1,080,000 |
|
Plymouth, MN Weekly VRDNs (Nuaire, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
1,080,000 |
|
|
1,100,000 |
|
Plymouth, MN, (Series 2000), Weekly VRDNs (Nuaire, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
1,100,000 |
|
|
2,500,000 |
|
Plymouth, MN, IDRB (Series 1994), Weekly VRDNs (Olympic Steel, Inc.)/(National City Bank, Ohio LOC) |
|
|
2,500,000 |
|
|
1,160,000 |
|
Port Authority of Saint Paul, MN, (Series 1998A), Weekly VRDNs (Bix Fruit Co.)/(Firstar Bank, N.A. LOC) |
|
|
1,160,000 |
|
|
2,500,000 |
|
Port Authority of Saint Paul, MN, Variable Rate Demand IDRB's (Series 1998A), Weekly VRDNs (National Checking Co.)/(U.S. Bank, N.A., Minneapolis LOC) |
|
|
2,500,000 |
|
|
415,000 |
|
Port of Austin, MN Weekly VRDNs (Mower House Color)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
415,000 |
|
|
7,000,000 |
|
Rochester, MN Health Care Facility Authority, (Series 1998-177), Weekly VRDNs (Mayo Foundation)/(Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ) |
|
|
7,000,000 |
|
|
5,400,000 |
|
Rockford, MN, (Series 1999), Weekly VRDNs (Minnesota Diversified Products, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
5,400,000 |
|
|
2,275,000 |
|
Rogers, MN IDA, IDRB Weekly VRDNs (DAC Development LLC Project)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,275,000 |
|
|
14,000,000 |
|
Seaway Port Authority of Duluth, MN, (Series of 2000), Weekly VRDNs (St. Lawrence Cement, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
14,000,000 |
|
|
2,000,000 |
|
Shakopee, MN Hospital Finance Authority Weekly VRDNs (St. Francis Regional Medical Center)/(Citibank N.A., New York LOC) |
|
|
2,000,000 |
|
|
8,000,000 |
|
Southern Minnesota Municipal Power Agency, 4.20% CP, Mandatory Tender 12/1/2000 |
|
|
8,000,000 |
|
|
7,400,000 |
|
Southern Minnesota Municipal Power Agency, 4.35% CP, Mandatory Tender 2/9/2001 |
|
|
7,400,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Minnesota--continued |
|
|
|
|
$ |
665,000 |
|
St. Cloud, MN Housing & Redevelopment Authority, Revenue Refunding Bonds (Series 1994A), Weekly VRDNs (Coborn's, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
$ |
665,000 |
|
|
1,672,500 |
|
St. Cloud, MN Housing & Redevelopment Authority, Revenue Refunding Bonds (Series 1994B), Weekly VRDNs (Coborn's, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
1,672,500 |
|
|
9,400,000 |
|
St. Louis Park, MN Health Care Facilities, Floating Rate Monthly Demand IDRB's (Series 1984), Weekly VRDNs (Unicare Homes, Inc.)/(Paribas, Paris LOC) |
|
|
9,400,000 |
|
|
5,040,000 |
|
St. Michael, MN, (Series 1999), Weekly VRDNs (TC/American Monorail, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
5,040,000 |
|
|
4,400,000 |
|
St. Paul, MN Housing & Redevelopment Authority Weekly VRDNs (District Cooling St Paul, Inc.)/(Dexia Credit Local de France LOC) |
|
|
4,400,000 |
|
|
400,000 |
|
St. Paul, MN Housing & Redevelopment Authority Weekly VRDNs (United Way)/(U.S. Bank, NA, Minneapolis LOC) |
|
|
400,000 |
|
|
2,000,000 |
|
St. Paul, MN Housing & Redevelopment Authority, (1995 Series I), Weekly VRDNs (District Cooling St Paul, Inc.)/(Dexia Credit Local de France LOC) |
|
|
2,000,000 |
|
|
50,000,000 |
|
University of Minnesota, (Series 1999A), Weekly VRDNs |
|
|
50,000,000 |
|
|
2,090,000 |
|
Victoria, MN, (Series 1996A), Weekly VRDNs (HEI, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,090,000 |
|
|
1,045,000 |
|
Victoria, MN, (Series 1996B), Weekly VRDNs (HEI, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
1,045,000 |
|
|
1,800,000 |
|
Wells, MN, 4.80% TOBs (Stokely, Inc.)/(First Union National Bank, Charlotte, NC LOC), Optional Tender 12/1/2000 |
|
|
1,800,000 |
|
|
700,000 |
|
White Bear, MN Weekly VRDNs (Thermoform Plastic, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
700,000 |
|
|
1,875,000 |
|
White Bear, MN, Variable Rate Demand Industrial Revenue Bonds Weekly VRDNs (N.A. Ternes)/(Firstar Bank, N.A. LOC) |
|
|
1,875,000 |
|
|
4,100,000 |
|
Winnebago, MN, (Series 1999), Weekly VRDNs (Dixie Carbonic, Inc.)/(Bank One, Illinois, N.A. LOC) |
|
|
4,100,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
|
$ |
479,611,743 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 41.4% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
100.00% |
|
0.00% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $53,830,000, which represents 11.1% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($482,878,308) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMT |
--Alternative Minimum Tax |
|
COL |
--Collateralized |
|
CP |
--Commercial Paper |
|
FGIC |
--Financial Guaranty Insurance Company |
|
FSA |
--Financial Security Assurance |
|
FHLMC |
-- Federal Home Loan Mortgage Corp. |
|
GNMA |
--Government National Mortgage Association |
|
GTD |
--Guaranteed |
|
HFA |
--Housing Finance Authority |
|
IDA |
--Industrial Development Authority |
|
IDR |
--Industrial Development Revenue |
|
IDRB |
--Industrial Development Revenue Bond |
|
INS |
--Insured |
|
INV |
--Investment Agreement |
|
ISD |
--Independent School District |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
PCR |
--Pollution Control Revenue |
|
SFM |
--Single Family Mortgage |
|
TANs |
--Tax Anticipation Notes |
|
TOBs |
--Tender Option Bonds |
|
TRANs |
--Tax and Revenue Anticipation Notes |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
479,611,743 |
|
Cash |
|
|
|
|
|
541,120 |
|
Income receivable |
|
|
|
|
|
3,804,889 |
|
Receivable for shares sold |
|
|
|
|
|
49,752 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
484,007,504 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
151,280 |
|
|
|
|
Income distribution payable |
|
|
898,098 |
|
|
|
|
Accrued expenses |
|
|
79,818 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
1,129,196 |
|
|
||||||
|
Net assets for 482,878,308 shares outstanding |
|
|
|
|
$ |
482,878,308 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
$262,975,406 ÷ 262,975,406 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Cash Series Shares: |
|
|
|
|
|
|
|
$219,902,902 ÷ 219,902,902 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
21,712,008 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
2,095,727 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
394,572 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
28,835 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
176,855 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
5,214 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,552 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
14,026 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
105,205 |
|
|
|
|
|
Distribution services fee--Cash Series Shares |
|
|
|
|
|
|
1,290,575 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
664,542 |
|
|
|
|
|
Shareholder services fee--Cash Series Shares |
|
|
|
|
|
|
645,287 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
32,752 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
26,608 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
30,513 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
4,034 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
5,526,297 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(1,338,376 |
) |
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Cash Series Shares |
|
|
(645,287 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(664,542 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(2,648,205 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
2,878,092 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
18,833,916 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
||
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
18,833,916 |
|
|
$ |
15,621,642 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(10,198,578 |
) |
|
|
(9,461,048 |
) |
|
Cash Series Shares |
|
|
(8,635,338 |
) |
|
|
(6,160,594 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(18,833,916 |
) |
|
|
(15,621,642 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
1,240,876,579 |
|
|
|
1,431,126,325 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
9,129,484 |
|
|
|
6,502,602 |
|
|
Cost of shares redeemed |
|
|
(1,302,893,395 |
) |
|
|
(1,437,969,499 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(52,887,332 |
) |
|
|
(340,572 |
) |
|
|
||||||||
|
Change in net assets |
|
|
(52,887,332 |
) |
|
|
(340,572 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
535,765,640 |
|
|
|
536,106,212 |
|
|
|
||||||||
|
End of period |
|
$ |
482,878,308 |
|
|
$ |
535,765,640 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Effective February 1, 2000, Minnesota Municipal Cash Trust (the "Fund") became a portfolio of the Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Shares and Cash Series Shares. The investment objective of the Fund is current income exempt from federal regular income tax and the regular personal income taxes imposed by the State of Minnesota consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees ("Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At October 31, 2000, capital paid-in aggregated $482,878,308.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
649,061,460 |
|
|
761,059,176 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
772,535 |
|
|
429,923 |
|
|
Shares redeemed |
|
(672,398,621 |
) |
|
(804,456,292 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
(22,564,626 |
) |
|
(42,967,193 |
) |
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Cash Series Shares: |
|
|
|
|
|
|
|
Shares sold |
|
591,815,119 |
|
|
670,067,149 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
8,356,949 |
|
|
6,072,679 |
|
|
Shares redeemed |
|
(630,494,774 |
) |
|
(633,513,207 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM CASH SERIES SHARE TRANSACTIONS |
|
(30,322,706 |
) |
|
42,626,621 |
|
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(52,887,332 |
) |
|
(340,572 |
) |
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Funds with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Cash Series Shares. The Plan provides that the Fund may incur distribution expenses up to 0.50% of the average daily net assets of the Cash Series Shares, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $841,159,000 and $765,169,000 respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 46.7% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 15.5% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Minnesota Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Minnesota Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as they become available. To obtain the SAI, Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Minnesota Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N492
0082715A-IS (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and the income tax imposed by the State of North Carolina consistent with stability of principal by investing in a portfolio of short-term, high-quality North Carolina tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 7
How to Redeem Shares 9
Account and Share Information 12
Who Manages the Fund? 12
Financial Information 13
Report of Ernst & Young LLP, Independent Auditors 26
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and the income tax imposed by the State of North Carolina 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.
The Fund invests in short-term, high-quality North Carolina tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income will be exempt from federal regular income tax and North Carolina state income tax or so that at least 80% of its net assets will be invested in obligations, the interest income from which is exempt from federal regular and North Carolina state income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's total returns on a calendar year-end basis.
The Fund's Shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.75%.
Within the period shown in the Chart, the Fund's highest quarterly return was 0.93% (quarter ended June 30, 1995). Its lowest quarterly return was 0.55% (quarter ended March 31, 1994).
The following table represents the Fund's Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.88% |
|
5 Years |
|
3.19% |
|
Start of Performance1 |
|
3.10% |
1 The Fund's Shares start of performance date was December 31, 1993.
The Fund's Shares 7-Day Net Yield as of December 31, 2000 was 4.10%.
You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.50% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee |
|
0.25% |
|
Other Expenses |
|
0.17% |
|
Total Annual Fund Operating Expenses |
|
0.92% |
|
1 Although not contractually obligated to do so, the adviser waived certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ending October 31, 2000. |
||
|
Total Waiver of Fund Expenses |
|
0.33% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.59% |
|
2 The adviser has voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.17% for the fiscal year ending October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's Shares operating expenses are before waivers as shown in the table and remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
|
$ 94 |
|
|
||
|
3 Years |
|
$ 293 |
|
|
||
|
5 Years |
|
$ 509 |
|
|
||
|
10 Years |
|
$1,131 |
|
|
||
The Fund invests in a portfolio of high-quality North Carolina tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income will be exempt from federal regular income tax and North Carolina state income tax or so that at least 80% of its net assets will be invested in obligations, the interest income from which is exempt from federal regular and North Carolina state income tax. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal and North Carolina income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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.
A substantial part of the Fund's portfolio may be comprised of securities issued by North Carolina issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from North Carolina, the Fund may be subject to additional risks compared to funds that invest in multiple states. North Carolina's growing and diverse economy has experienced a change from reliance on textile and apparel manufacturing to more reliance on service, finances and trade. The decline in the nondurable manufacturing sectors has been somewhat offset by rapid expansion in the high-tech industry.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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.
When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. 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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-North Carolina taxpayers because it invests in North Carolina municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by calling the Fund at 1-800-341-7400 once you have completed the appropriate authorization form for telephone transactions.
If you call before 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).
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the North Carolina taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 26.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.04 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.04 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.65 |
% |
|
2.81 |
% |
|
3.17 |
% |
|
3.24 |
% |
|
3.23 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.59 |
% |
|
0.59 |
% |
|
0.59 |
% |
|
0.59 |
% |
|
0.59 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.59 |
% |
|
2.77 |
% |
|
3.09 |
% |
|
3.19 |
% |
|
3.17 |
% |
|
|
|||||||||||||||
|
Expense waiver/reimbursement3 |
|
0.33 |
% |
|
0.33 |
% |
|
0.35 |
% |
|
0.40 |
% |
|
0.42 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$202,964 |
|
|
$185,348 |
|
|
$212,111 |
|
|
$172,636 |
|
|
$137,749 |
|
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--99.3%1 |
|
|
|
|
|
|
|
North Carolina--99.3% |
|
|
|
|
$ |
15,319,000 |
|
ABN AMRO MuniTOPS Certificates Trust (North Carolina Non-Amt), (Series 1998-23) Weekly VRDNs (Mission St. Josephs Health System)/(MBIA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) |
|
$ |
15,319,000 |
|
|
1,755,000 |
|
Alamance County, NC Industrial Facilities & PCFA, (Series B) Weekly VRDNs (Culp, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
1,755,000 |
|
|
5,565,000 |
|
Alexander County, NC Industrial Facilities & PCFA, (Series 1997) Weekly VRDNs (Mitchell Gold Company, Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
5,565,000 |
|
|
1,205,000 |
|
Buncombe County, NC Industrial Facilities & PCFA, (Series 1991) Weekly VRDNs (Rich Mount, Inc.)/(Bank of Tokyo-Mitsubishi Ltd. LOC) |
|
|
1,205,000 |
|
|
255,000 |
|
Burke County, NC Industrial Facilities & PCFA, Weekly VRDNs (Norwalk Furniture Corp., & Hickory Furniture)/(Branch Banking & Trust Co, Winston-Salem LOC) |
|
|
255,000 |
|
|
4,600,000 |
|
Catawba County, NC Industrial Facilities & PCFA, (Series 1994) Weekly VRDNs (Ethan Allen Inc Project)/(Deutsche Bank AG LOC) |
|
|
4,600,000 |
|
|
3,470,000 |
|
Catawba County, NC Industrial Facilities & PCFA, (Series 1998) Weekly VRDNs (Centro, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
3,470,000 |
|
|
2,615,000 |
|
Cleveland County, NC Industrial Facilities & PCFA, IDRB, (Series 1990) Weekly VRDNs (MetalsAmerica, Inc. Project)/(BankBoston, N.A. LOC) |
|
|
2,615,000 |
|
|
1,130,000 |
|
Cleveland County, NC Industrial Facilities & PCFA, PCR Bonds, (Series 1995) Weekly VRDNs (Grover Industries, Inc. Project)/(Bank of America, N.A. LOC) |
|
|
1,130,000 |
|
|
5,160,000 |
|
Gaston County, NC Industrial Facilities & PCFA, (Series 1997) Weekly VRDNs (Thermoform Plastic, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
5,160,000 |
|
|
2,285,000 |
|
Guilford County, NC Industrial Facilities & PCFA, (Series 1996) Weekly VRDNs (South/Win Ltd.)/(Branch Banking & Trust Co, Winston-Salem LOC) |
|
|
2,285,000 |
|
|
4,750,000 |
|
Guilford County, NC Industrial Facilities & PCFA, (Series 1999) Weekly VRDNs (FFNC, Inc.)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
4,750,000 |
|
|
7,125,000 |
|
Halifax County, NC Industrial Facilities & PCFA, Weekly VRDNs (Flambeau Airmold Project)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
7,125,000 |
|
|
800,000 |
|
Johnson County, NC Industrial Facilities & PCFA, (Series 1996) Weekly VRDNs (Inolex Chemical Company Project)/(PNC Bank, N.A. LOC) |
|
|
800,000 |
|
|
4,000,000 |
|
Johnson County, NC Industrial Facilities & PCFA, (Series 2000) Weekly VRDNs (Flanders Corporation)/(SunTrust Bank, Atlanta LOC) |
|
|
4,000,000 |
|
|
1,000,000 |
|
Lee County, NC Industrial Facility & PCFA, (Series 1989) Weekly VRDNs (Avondale Mills, Inc.)/(SunTrust Bank, Atlanta LOC) |
|
|
1,000,000 |
|
|
7,300,000 |
|
Martin County, NC IFA, (Series 1993) Weekly VRDNs (Weyerhaeuser Co.) |
|
|
7,300,000 |
|
|
4,334,000 |
|
Martin County, NC Water & Sewer District No. 1, 4.75% BANs, 1/10/2001 |
|
|
4,336,801 |
|
|
3,900,000 |
|
McDowell County, NC Industrial Facilities & PCFA, (Series 1997) Weekly VRDNs (Parker Hosiery, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
3,900,000 |
|
|
2,300,000 |
|
Mecklenberg County, NC Industrial Facilities & PCFA, (Series 1996) Weekly VRDNs (SteriGenics International Project)/ (Comerica Bank LOC) |
|
|
2,300,000 |
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
North Carolina--continued |
|
|
|
|
$ |
3,700,000 |
|
Mecklenberg County, NC Industrial Facilities & PCFA, (Series 2000) Weekly VRDNs (Ehren-Haus Industries, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
$ |
3,700,000 |
|
|
3,680,000 |
|
Mecklenberg County, NC Industrial Facility & PCFA, (Series 1988) Weekly VRDNs (Florida Steel Corp.)/(Bank of America, N.A. LOC) |
|
|
3,680,000 |
|
|
800,000 |
|
Mecklenburg County, NC, (Series 1996) Weekly VRDNs (YMCA of Greater Charlotte)/(Wachovia Bank of NC, N.A. LOC) |
|
|
800,000 |
|
|
2,275,000 |
|
New Hanover County, NC PCR Financial Authority Weekly VRDNs (Efson, Inc.)/(Branch Banking & Trust Co, Winston-Salem LOC) |
|
|
2,275,000 |
|
|
10,000,000 |
|
New Hanover County, NC PCR Financial Authority, (Series 1984) Weekly VRDNs (American Hoist & Derrick Co. Project)/(BankBoston, N.A. LOC) |
|
|
10,000,000 |
|
|
955,000 |
|
New Hanover County, NC PCR Financial Authority, (Series 1990) Weekly VRDNs (Wilmington Machinery, Inc. Project)/(Branch Banking & Trust Co, Winston-Salem LOC) |
|
|
955,000 |
|
|
1,930,000 |
|
North Carolina Educational Facilities Finance Agency, (Series 1999) Weekly VRDNs (Catawba College)/(Wachovia Bank of NC, N.A. LOC) |
|
|
1,930,000 |
|
|
2,500,000 |
|
North Carolina Educational Facilities Finance Agency, (Series 1999) Weekly VRDNs (North Carolina Wesleyan College)/(Centura Bank, Rocky Mount, NC LOC) |
|
|
2,500,000 |
|
|
2,700,000 |
|
North Carolina Educational Facilities Finance Agency, (Series 2000) Weekly VRDNs (Greensboro Montessory School)/ (Wachovia Bank of NC, N.A. LOC) |
|
|
2,700,000 |
|
|
5,710,000 |
2 |
North Carolina HFA, PT-457, 4.40% TOBs (Commerzbank AG, Frankfurt LIQ), Optional Tender 9/20/2001 |
|
|
5,710,000 |
|
|
12,000,000 |
2 |
North Carolina HFA, Variable Rate Certificates, (Series 1998L), 4.49% TOBs (Bank of America, N.A. LIQ), Optional Tender 7/19/2001 |
|
|
12,000,000 |
|
|
3,700,000 |
|
North Carolina Medical Care Commission, (Series 1992B) Weekly VRDNs (North Carolina Baptist)/(Wachovia Bank of NC, N.A. LIQ) |
|
|
3,700,000 |
|
|
9,655,000 |
|
North Carolina Medical Care Commission, (Series 1996) Weekly VRDNs (Adult CommunitiesTotal Services, Inc.)/(Lasalle Bank, Chicago LOC) |
|
|
9,655,000 |
|
|
1,300,000 |
|
North Carolina Medical Care Commission, (Series 1996) Weekly VRDNs (North Carolina Baptist)/(Wachovia Bank of NC, N.A. LIQ) |
|
|
1,300,000 |
|
|
5,500,000 |
|
North Carolina Medical Care Commission, (Series 1998) Weekly VRDNs (Cornelia Nixon Davis Nursing Home, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
5,500,000 |
|
|
5,700,000 |
|
North Carolina Medical Care Commission, (Series 1999) Weekly VRDNs (Cross Road Rest and Retirement Center, Inc.)/(Centura Bank, Rocky Mount, NC LOC) |
|
|
5,700,000 |
|
|
1,000,000 |
|
North Carolina Municipal Power Agency No. 1, 5.50% Bonds (FSA INS) 1/1/2001 |
|
|
1,002,097 |
|
|
16,000,000 |
2 |
North Carolina State, PT-413, 4.55% TOBs (Merrill Lynch & Co., Inc. LIQ), Optional Tender 6/14/2001 |
|
|
16,000,000 |
|
|
3,280,000 |
|
Orange County, NC Industrial Facilities & PCFA, Weekly VRDNs (Mebane Packaging Corp.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
3,280,000 |
|
|
1,100,000 |
|
Piedmont Triad Airport Authority, NC, Weekly VRDNs (Triad International Maintenance Corp.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
1,100,000 |
|
|
1,065,000 |
|
Piedmont Triad Airport Authority, NC, (Series A), 4.75% Bonds (FSA INS) 7/1/2001 |
|
|
1,068,039 |
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
North Carolina--continued |
|
|
|
|
$ |
900,000 |
|
Randolph County, NC IDA, (Series 1990) Weekly VRDNs (Wayne Steel, Inc.)/(Bank One, Ohio N.A. LOC) |
|
$ |
900,000 |
|
|
3,695,000 |
|
Robeson County, NC Industrial Facilities & PCFA, (Series 1999) Weekly VRDNs (Rempac Foam Corp.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
3,695,000 |
|
|
4,210,000 |
|
Rowan County, NC Industrial Facilities PCFA, (Series 1999) Weekly VRDNs (PHC, LLC)/(SouthTrust Bank of Alabama, Birmingham LOC) |
|
|
4,210,000 |
|
|
3,500,000 |
|
Rutherford County, NC, Industrial Facilities & PCFA, Weekly VRDNs (Four Leaf Textiles)/(SunTrust Bank, Atlanta LOC) |
|
|
3,500,000 |
|
|
400,000 |
|
Rutherford County, NC, Industrial Facilities & PCFA, Weekly VRDNs (Spring-Ford Knitting Co.)/(Branch Banking & Trust Co, Winston-Salem LOC) |
|
|
400,000 |
|
|
1,000,000 |
|
Sampson County, NC Industrial Facilities & PCFA, (Series 1997) Weekly VRDNs (DuBose Strapping, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,000,000 |
|
|
5,850,000 |
|
University of North Carolina at Chapel Hill, School of Medicine Ambulatory Care Clinic, (Series 1990) Weekly VRDNs |
|
|
5,850,000 |
|
|
1,888,583 |
|
Wayne County, NC PCFA, Weekly VRDNs (Cooper Industries, Inc.) |
|
|
1,888,583 |
|
|
6,600,000 |
|
Wilson County, NC PCA, (Series 1994) Weekly VRDNs (Granutec, Inc.)/(Bank of Nova Scotia, Toronto LOC) |
|
|
6,600,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
|
$ |
201,469,520 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 47.5% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by NRSROs or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value
|
First Tier |
|
Second Tier |
|
95.9% |
|
4.1% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $33,710,000 which represents 16.6% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($202,963,842) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMT |
--Alternative Minimum Tax |
|
BANs |
--Bond Anticipation Notes |
|
FSA |
--Financial Security Assurance |
|
HFA |
--Housing Finance Authority |
|
IDA |
--Industrial Development Authority |
|
IDRB |
--Industrial Development Revenue Bond |
|
IFA |
--Industrial Finance Authority |
|
INS |
--Insured |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
PCA |
--Pollution Control Authority |
|
PCR |
--Pollution Control Revenue |
|
PCFA |
--Pollution Control Finance Authority |
|
TOBs |
--Tender Option Bonds |
|
VRDNS |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
201,469,520 |
|
Cash |
|
|
|
|
|
451,734 |
|
Income receivable |
|
|
|
|
|
1,279,901 |
|
Receivable for shares sold |
|
|
|
|
|
48,329 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
203,249,484 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
75,855 |
|
|
|
|
Income distribution payable |
|
|
162,170 |
|
|
|
|
Accrued expenses |
|
|
47,617 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
285,642 |
|
|
||||||
|
Net assets for 202,963,842 shares outstanding |
|
|
|
|
$ |
202,963,842 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share: |
|
|
|
|
|
|
|
$202,963,842 ÷ 202,963,842 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
$ |
7,881,329 |
|
|
|||||||
|
Expenses: |
|
|
|
|
|
|
|
|
Investment adviser fee |
|
$ |
943,331 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
142,083 |
|
|
|
|
|
Custodian fees |
|
|
10,115 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
38,626 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
1,824 |
|
|
|
|
|
Auditing fees |
|
|
11,447 |
|
|
|
|
|
Legal fees |
|
|
13,498 |
|
|
|
|
|
Portfolio accounting fees |
|
|
46,620 |
|
|
|
|
|
Shareholder services fee |
|
|
471,665 |
|
|
|
|
|
Share registration costs |
|
|
18,348 |
|
|
|
|
|
Printing and postage |
|
|
21,695 |
|
|
|
|
|
Insurance premiums |
|
|
11,045 |
|
|
|
|
|
Miscellaneous |
|
|
2,354 |
|
|
|
|
|
|
|||||||
|
TOTAL EXPENSES |
|
|
1,732,651 |
|
|
|
|
|
|
|||||||
|
Waiver: |
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
|
(611,219 |
) |
|
|
|
|
|
|||||||
|
Net expenses |
|
|
|
|
|
|
1,121,432 |
|
|
|||||||
|
Net investment income |
|
|
|
|
|
$ |
6,759,897 |
|
|
|||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
6,759,897 |
|
|
$ |
5,238,783 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
(6,759,897 |
) |
|
|
(5,238,783 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
741,664,486 |
|
|
|
684,100,031 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
5,039,281 |
|
|
|
4,072,608 |
|
|
Cost of shares redeemed |
|
|
(729,087,555 |
) |
|
|
(714,935,712 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
17,616,212 |
|
|
|
(26,763,073 |
) |
|
|
||||||||
|
Change in net assets |
|
|
17,616,212 |
|
|
|
(26,763,073 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
185,347,630 |
|
|
|
212,110,703 |
|
|
|
||||||||
|
End of period |
|
$ |
202,963,842 |
|
|
$ |
185,347,630 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Effective February 1, 2000, North Carolina Municipal Cash Trust (the "Fund") became a portfolio of Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to provide current income exempt from federal regular income tax and the income tax imposed by the State of North Carolina consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees (the "Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Shares sold |
|
741,664,486 |
|
|
684,100,031 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
5,039,281 |
|
|
4,072,608 |
|
|
Shares redeemed |
|
(729,087,555 |
) |
|
(714,935,712 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
17,616,212 |
|
|
(26,763,073 |
) |
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Funds with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $421,095,000 and $381,440,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 75.6% of the securities in the portfolio of investments were backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 10.2% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the North Carolina Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The financial highlights for each of the three years in the period ended October 31, 1998, were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the North Carolina Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000 is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as it becomes available. To obtain the SAI, the Semi-Annual Report and other information without charge, and make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
North Carolina Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N278
3090803A (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and New Jersey state income tax imposed upon non-corporate tax payers consistent with stability of principal by investing in a portfolio of short-term, high-quality New Jersey tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 8
How to Redeem Shares 9
Account and Share Information 11
Who Manages the Fund? 12
Financial Information 12
Report of Ernst & Young LLP, Independent Auditors 25
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and New Jersey state income tax imposed upon non-corporate taxpayers 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.
The Fund invests in short-term, high-quality New Jersey tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and New Jersey state income tax imposed upon non-corporate taxpayers. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Shares total returns on a calendar year-end basis.
The Fund's Institutional Shares are sold without a sales charge (load). The total returns displayed above are based upon net asset value.
The Fund Institutional Shares total return from January 1, 2000 to September 30, 2000 was 2.67%.
Within the period shown in the chart, the Fund's Institutional Shares highest quarterly return was 1.10% (quarter ended March 31, 1991). Its lowest quarterly return was 0.47% (quarter ended March 31, 1994).
The following table represents the Fund's Institutional Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.84% |
|
5 Years |
|
3.14% |
|
Start of Performance1 |
|
3.04% |
1 The Fund's Institutional Shares start of performance date was December 12, 1990.
The Fund's Institutional Shares 7-Day Net Yield as of December 31, 1999 was 3.79%. You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund's Institutional Shares.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.40% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee3 |
|
0.25% |
|
Other Expenses |
|
0.20% |
|
Total Annual Fund Operating Expenses |
|
0.85% |
|
1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waivers of Fund Expenses |
|
0.30% |
|
Total Actual Annual Fund Operating Expenses (after waiver) |
|
0.55% |
|
2 The adviser has voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.30% for the fiscal year ended October 31, 2000. |
||
|
3 The shareholder services fee for the Institutional Services Shares has been voluntarily reduced. This voluntary reduction can be terminated at any time. The shareholder services fee paid by the Fund (after the voluntary reduction) was 0.05% for the fiscal year ended October 31, 2000. |
||
This 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. Expenses assuming no redemption are also shown. 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 shown in the table and remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
$ |
87 |
|
|
||
|
3 Years |
$ |
271 |
|
|
||
|
5 Years |
$ |
471 |
|
|
||
|
10 Years |
$ |
1,049 |
|
|
||
The Fund invests its assets in a portfolio of high-quality New Jersey tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and New Jersey state income tax imposed upon non-corporate taxpayers. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal income tax and New Jersey income tax imposed upon non-corporate taxpayers. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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 prices 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.
A substantial part of the Fund's portfolio may be comprised of securities issued by New Jersey issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from New Jersey, the Fund may be subject to additional risks compared to funds that invest in multiple states. New Jersey's economy is relatively diversified across the service sectors. New Jersey's economy has seen a long-term trend of declining employment in manufacturing industries offset by increasing employment in the diversified services sector. Any downturn in these and other industries may adversely affect the economy of the state.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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.
When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. 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.
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, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-New Jersey taxpayers because it invests in New Jersey municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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.
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
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.
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.
You will receive periodic statements reporting all account activity, including dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the New Jersey taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 25.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.56 |
% |
|
2.77 |
% |
|
3.12 |
% |
|
3.18 |
% |
|
3.17 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.55 |
% |
|
0.55 |
% |
|
0.55 |
% |
|
0.55 |
% |
|
0.55 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.49 |
% |
|
2.75 |
% |
|
3.07 |
% |
|
3.13 |
% |
|
3.13 |
% |
|
|
|||||||||||||||
|
Expense waiver/reimbursement3 |
|
0.30 |
% |
|
0.28 |
% |
|
0.28 |
% |
|
0.31 |
% |
|
0.37 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$99,502 |
|
$112,138 |
|
$106,032 |
|
$112,407 |
|
$115,722 |
|
||||
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--99.1%1 |
|
|
|
|
|
|
|
New Jersey--99.1% |
|
|
|
|
$ |
1,819,500 |
|
Beachwood, NJ, 5.13% BANs, 9/7/2001 |
|
$ |
1,828,735 |
|
|
1,110,000 |
|
Camden County, NJ Improvement Authority, (Series 1995) Weekly VRDNs (Jewish Federation of Southern Jersey, Inc.)/(National Westminster Bank, PLC LOC) |
|
|
1,110,000 |
|
|
4,900,000 |
|
Camden County, NJ Improvement Authority, (Series 1996) Weekly VRDNs (Parkview Redevelopment Housing Project)/(General Electric Capital Corp. LOC) |
|
|
4,900,000 |
|
|
1,896,000 |
|
Clipper Tax-Exempt Certificates Trust (New Jersey AMT), (Series 1999-8) Weekly VRDNs (New Jersey Housing & Mortgage Financing Authority)/(MBIA INS)/(State Street Bank and Trust Co. LIQ) |
|
|
1,896,000 |
|
|
6,965,000 |
|
Clipper Tax-Exempt Certificates Trust (New Jersey Non-AMT), (Series 1998-6) Weekly VRDNs (New Jersey Housing & Mortgage Financing Authority)/(MBIA INS)/(State Street Bank and Trust Co. LIQ) |
|
|
6,965,000 |
|
|
1,562,215 |
|
Franklin Borough, NJ, 4.70% BANs, 3/30/2001 |
|
|
1,564,357 |
|
|
2,000,000 |
|
Haddonfield, NJ, 5.38% BANs, 5/31/2001 |
|
|
2,004,684 |
|
|
1,000,000 |
|
Irvington Township, NJ, 4.88% BANs, 3/23/2001 |
|
|
1,001,957 |
|
|
3,205,000 |
|
Lakewood Township, NJ, 4.88% BANs, 7/27/2001 |
|
|
3,213,425 |
|
|
3,487,750 |
|
Little Egg Harbor Township, NJ, 4.63% BANs, 3/9/2001 |
|
|
3,490,730 |
|
|
2,929,700 |
|
Lower Township, NJ, 4.75% BANs, 4/6/2001 |
|
|
2,933,894 |
|
|
2,160,000 |
|
Matawan Borough, NJ, 4.63% BANs, 3/6/2001 |
|
|
2,161,738 |
|
|
1,500,000 |
|
Middlesex County, NJ PCFA, Weekly VRDNs (FMC Gold Co.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
1,500,000 |
|
|
2,400,000 |
|
New Jersey EDA, Weekly VRDNs (Center-For-Aging - Applewood Estates)/(Fleet National Bank, Springfield, MA LOC) |
|
|
2,400,000 |
|
|
2,450,000 |
|
New Jersey EDA, Weekly VRDNs (Maroukian Realty, LLC)/(Commerce Bank, N.A., Cherry Hill, NJ LOC) |
|
|
2,450,000 |
|
|
5,153,000 |
|
New Jersey EDA, Weekly VRDNs (Meridan Health Care)/(Allfirst LOC) |
|
|
5,153,000 |
|
|
2,400,000 |
|
New Jersey EDA, Weekly VRDNs (U.S. Golf Association)/(PNC Bank, N.A. LOC) |
|
|
2,400,000 |
|
|
750,000 |
|
New Jersey EDA, Weekly VRDNs (YM-YWHA of Bergen County, NJ)/(Bank of New York LOC) |
|
|
750,000 |
|
|
1,200,000 |
|
New Jersey EDA, (Series 1994A), 4.88% TOBs (A.F.L. Quality, Inc.)/(Fleet Bank N.A. LOC) Optional Tender 7/1/2001 |
|
|
1,200,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
New Jersey--continued |
|
|
|
|
$ |
275,000 |
|
New Jersey EDA, (Series 1994B), 4.88% TOBs (Two Univac, LLC)/(Fleet Bank N.A. LOC) Optional Tender 7/1/2001 |
|
$ |
275,000 |
|
|
4,100,000 |
|
New Jersey EDA, (Series 1985) Weekly VRDNs (Seton Co.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
4,100,000 |
|
|
280,000 |
|
New Jersey EDA, (Series 1987G) Weekly VRDNs (W.Y. Urban Renewal)/(National Westminster Bank, PLC LOC) |
|
|
280,000 |
|
|
3,000,000 |
|
New Jersey EDA, (Series 1990) Weekly VRDNs (Genlyte Camden County)/(Bank of America, N.A. LOC) |
|
|
3,000,000 |
|
|
860,000 |
|
New Jersey EDA, (Series 1992D-1) Weekly VRDNs (Danlin Corp.)/(Banque Nationale de Paris LOC) |
|
|
860,000 |
|
|
2,355,000 |
|
New Jersey EDA, (Series 1992L) Weekly VRDNs (Kent Place School)/ (Banque Nationale de Paris LOC) |
|
|
2,355,000 |
|
|
1,275,000 |
|
New Jersey EDA, (Series 1995) Weekly VRDNs (International Vitamin Corporation Project)/(National Westminster Bank, PLC LOC) |
|
|
1,275,000 |
|
|
2,325,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Lauffer Building Associates, Ltd.)/(Credit Suisse First Boston LOC) |
|
|
2,325,000 |
|
|
1,775,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Oakland Building Associates, Ltd.)/(Credit Suisse First Boston LOC) |
|
|
1,775,000 |
|
|
1,800,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Oakland Industrial Associates, Ltd.)/(Credit Suisse First Boston LOC) |
|
|
1,800,000 |
|
|
2,500,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Okner Parkway Associates Ltd. Partnership)/(Credit Suisse First Boston LOC) |
|
|
2,500,000 |
|
|
3,500,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Phoenix Realty Partners)/(First Union National Bank, Charlotte, NC LOC) |
|
|
3,500,000 |
|
|
1,400,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (UJA Federation of Bergan County and North Hudson, Inc.)/(Bank of New York, New York LOC) |
|
|
1,400,000 |
|
|
2,300,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Wood Hollow Associates, LLC)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,300,000 |
|
|
2,685,000 |
|
New Jersey EDA, (Series 1998) Weekly VRDNs (Deutscher Realty Co. LLC)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
2,685,000 |
|
|
3,800,000 |
|
New Jersey EDA, (Series 1998A) Weekly VRDNs (Bayshore Health Care Center)/(KBC Bank N.V. LOC) |
|
|
3,800,000 |
|
|
430,000 |
|
New Jersey EDA, (Series 1998) Weekly VRDNs (Jewish Home at Rockleigh)/(Allied Irish Banks PLC LOC) |
|
|
430,000 |
|
|
700,000 |
|
New Jersey EDA, (Series 1998) Weekly VRDNs (Jewish Home at Rockleigh)/(PNC Bank, N.A. LOC) |
|
|
700,000 |
|
|
3,750,000 |
|
New Jersey EDA, (Series 1999) Weekly VRDNs (Richmond Industries, Inc. and Richmond Realty, LLC)/(Commerce Bank, N.A., Cherry Hill, NJ LOC) |
|
|
3,750,000 |
|
|
1,665,000 |
|
New Jersey EDA, (Series 1999) Weekly VRDNs (VOADV Property, Inc.)/(Commerce Bank, N.A., Cherry Hill, NJ LOC) |
|
|
1,665,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
New Jersey--continued |
|
|
|
|
$ |
3,500,000 |
|
New Jersey EDA, (Series 1999) Weekly VRDNs (White Wave, Inc.)/(KeyBank, N.A. LOC) |
|
$ |
3,500,000 |
|
|
5,780,000 |
|
New Jersey EDA, (Series 2000), 4.50% TOBs (Dallas Airmotive, Inc.)/(Bayerische Landesbank Girozentrale LOC), Optional Tender 12/1/2000 |
|
|
5,780,000 |
|
|
960,000 |
|
New Jersey EDA, (Series A) Weekly VRDNs (325 Midland Avenue, LLC & Wearbest Sil-Tex, Ltd.)/(Bank of New York, New York LOC) |
|
|
960,000 |
|
|
80,000 |
|
New Jersey EDA, (Series B) Weekly VRDNs (325 Midland Avenue, LLC & Wearbest Sil-Tex, Ltd.)/(Bank of New York, New York LOC) |
|
|
80,000 |
|
|
300,000 |
|
New Jersey EDA, (Series W) Weekly VRDNs (Datatec Industries, Inc.)/ (Banque Nationale de Paris LOC) |
|
|
300,000 |
|
|
2,815,000 |
|
New Jersey EDA, Economic Development Bonds, Weekly VRDNs (Atlantic States Cast Iron Pipe Co.)/(Amsouth Bank N.A., Birmingham LOC) |
|
|
2,815,000 |
|
|
4,800,000 |
|
New Jersey EDA, Port Facility Revenue Bonds, (Series 1983) Weekly VRDNs (Trailer Marine Transport Corp.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
4,800,000 |
|
|
6,160,000 |
|
New Jersey Housing & Mortgage Financing Authority, CDC Municipal Products Class A Certificates (Series 1996B) Weekly VRDNs (MBIA INS)/(CDC Municipal Projects, Inc. LIQ) |
|
|
6,160,000 |
|
|
2,500,000 |
|
New Jersey Housing & Mortgage Financing Authority, MERLOTS, (Series 2000 A2) Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
2,500,000 |
|
|
3,530,000 |
|
New Jersey State Transportation Trust Fund Authority, Floater Certificates, (Series 1998-54) Weekly VRDNs (FSA INS)/(Morgan Stanley, Dean Witter Municipal Funding Inc. LIQ) |
|
|
3,530,000 |
|
|
4,000,000 |
|
New Jersey State, (Series Fiscal 2001A), 4.25% CP, Mandatory Tender 12/7/2000 |
|
|
4,000,000 |
|
|
1,555,000 |
|
Newton, NJ, 5.00% BANs, 8/24/2001 |
|
|
1,561,028 |
|
|
4,750,000 |
|
Ocean City, NJ, 5.00% BANs, 12/15/2000 |
|
|
4,752,223 |
|
|
1,000,000 |
|
Passaic Valley, NJ Water Commission, 1999 Water Supply System Subordinated Project Notes, 4.50% BANs (PNC Bank, N.A. LOC) 11/14/2000 |
|
|
1,000,232 |
|
|
2,186,000 |
|
Patterson, NJ, 5.25% BANs, 6/15/2001 |
|
|
2,193,431 |
|
|
1,034,159 |
|
Phillipsburg, NJ, 5.38% BANs, 6/13/2001 |
|
|
1,038,222 |
|
|
10,000,000 |
|
Port Authority of New York and New Jersey, (Series 1991-4) Weekly VRDNs |
|
|
10,000,000 |
|
|
1,000,000 |
|
Sea Isle City, NJ, 4.88% BANs, 9/28/2001 |
|
|
1,003,669 |
|
|
2,000,000 |
|
Sea Isle City, NJ, 5.00% BANs, 6/21/2001 |
|
|
2,003,636 |
|
|
1,590,000 |
|
Trenton, NJ, 4.60% BANs, 10/19/2001 |
|
|
1,592,929 |
|
|
3,999,921 |
|
Warren County, NJ, 4.50% BANs, 2/15/2001 |
|
|
4,001,366 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
New Jersey--continued |
|
|
|
|
$ |
5,665,000 |
|
Washington Borough, NJ, 4.25% BANs, 12/8/2000 |
|
$ |
5,666,376 |
|
|
5,317,107 |
|
Washington Township, NJ, 5.00% BANs, (Warren County), 3/1/2001 |
|
|
5,325,457 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)2 |
|
$ |
164,262,089 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 29.7% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by NRSROs or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 and F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
86.7% |
|
13.3% |
2 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($165,811,270) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMT |
--Alternative Minimum Tax |
|
BANs |
--Bond Anticipation Notes |
|
CP |
--Commercial Paper |
|
EDA |
--Economic Development Authority |
|
FSA |
--Financial Security Assurance |
|
INS |
--Insured |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
PCFA |
--Pollution Control Finance Authority |
|
TOBs |
--Tender Option Bonds |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
164,262,089 |
|
Cash |
|
|
|
|
|
228,087 |
|
Income receivable |
|
|
|
|
|
1,629,866 |
|
Receivable for shares sold |
|
|
|
|
|
215,591 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
166,335,633 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
78,457 |
|
|
|
|
Income distribution payable |
|
|
417,839 |
|
|
|
|
Accrued expenses |
|
|
28,067 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
524,363 |
|
|
||||||
|
Net assets for 165,811,270 shares outstanding |
|
|
|
|
$ |
165,811,270 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
$99,501,502 ÷ 99,501,502 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Institutional Service Shares: |
|
|
|
|
|
|
|
$66,309,768 ÷ 66,309,768 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
7,434,477 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
732,578 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
155,000 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
9,542 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
55,293 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
2,028 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
9,856 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
16,627 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
57,557 |
|
|
|
|
|
Distribution services fee--Institutional Service Shares |
|
|
|
|
|
|
70,946 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
280,495 |
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
177,366 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
29,059 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
21,071 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
10,610 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
2,171 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
1,630,199 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(177,612 |
) |
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Institutional Service Shares |
|
|
(70,946 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(224,396 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(70,946 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(543,900 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
1,086,299 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
6,348,178 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
6,348,178 |
|
|
$ |
5,185,517 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(3,914,007 |
) |
|
|
(3,366,649 |
) |
|
Institutional Service Shares |
|
|
(2,434,171 |
) |
|
|
(1,818,868 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(6,348,178 |
) |
|
|
(5,185,517 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
576,169,418 |
|
|
|
563,331,396 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
1,456,724 |
|
|
|
1,077,052 |
|
|
Cost of shares redeemed |
|
|
(582,316,362 |
) |
|
|
(565,179,843 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(4,690,220 |
) |
|
|
(771,395 |
) |
|
|
||||||||
|
Change in net assets |
|
|
(4,690,220 |
) |
|
|
(771,395 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
170,501,490 |
|
|
|
171,272,885 |
|
|
|
||||||||
|
End of period |
|
$ |
165,811,270 |
|
|
$ |
170,501,490 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
New Jersey Municipal Cash Trust (the "Fund") a portfolio of the Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Shares and Institutional Service Shares. The investment objective of the Fund is to provide current income which is exempt from federal regular income tax and New Jersey state income tax imposed upon non-corporate taxpayers consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
330,149,109 |
|
|
401,625,092 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
28,713 |
|
|
26,129 |
|
|
Shares redeemed |
|
(342,814,680 |
) |
|
(395,545,299 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
(12,636,858 |
) |
|
6,105,922 |
|
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
Shares sold |
|
246,020,309 |
|
|
161,706,304 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
1,428,011 |
|
|
1,050,923 |
|
|
Shares redeemed |
|
(239,501,682 |
) |
|
(169,634,544 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
7,946,638 |
|
|
(6,877,317 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(4,690,220 |
) |
|
(771,395 |
) |
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Funds with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Institutional Service Shares. The Plan provides that the Fund may incur distribution expenses up to 0.10% of the average daily net assets of the Institutional Service Shares, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $258,465,000 and $261,380,000 respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 62.7% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 10.7% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the New Jersey Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the New Jersey Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000 is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as they become available. To obtain the SAI, the Semi-Annual Report and other information without charge, and make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
New Jersey Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N476
0100802A-IS (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and New Jersey state income tax imposed upon non-corporate taxpayers consistent with stability of principal by investing in a portfolio of short-term, high-quality New Jersey tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 8
How to Redeem Shares 9
Account and Share Information 12
Who Manages the Fund? 13
Financial Information 13
Report of Ernst & Young LLP, Independent Auditors 26
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and New Jersey state income tax imposed upon non-corporate taxpayers 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.
The Fund invests in short-term, high-quality New Jersey tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and New Jersey state income tax imposed upon non-corporate taxpayers. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Service Shares total returns on a calendar year-end basis.
The Fund's Institutional Service Shares are sold without a sales charge (load). The total returns displayed above are based upon net asset value.
The Fund's Institutional Service Shares total return from January 1, 2000 to September 30, 2000 was 2.59%.
Within the period shown in the chart, the Fund's Institutional Service Shares highest quarterly return was 1.10% (quarter ended March 31, 1991). Its lowest quarterly return was 0.44% (quarter ended March 31, 1994).
The following table represents the Fund's Institutional Service Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.73% |
|
5 Years |
|
3.04% |
|
Start of Performance1 |
|
2.94% |
1 The Fund Institutional Service Shares start of performance date was December 12, 1990.
The Fund's Institutional Service Shares 7-Day Net Yield as of December 31, 1999 was 3.69%. You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund's Institutional Service Shares.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.40% |
|
Distribution (12b-1) Fee3 |
|
0.10% |
|
Shareholder Services Fee4 |
|
0.25% |
|
Other Expenses |
|
0.20% |
|
Total Annual Fund Operating Expenses |
|
0.95% |
|
1 Although not contractually obligated to do so, the adviser, distributor and shareholder services provider waived certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waivers of Fund Expenses |
|
0.30% |
|
Total Actual Annual Fund Operating Expenses (after waiver) |
|
0.65% |
|
2 The adviser has voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.30% for the fiscal year ended October 31, 2000. |
||
|
3 The distribution (12b-1) fee has been voluntarily waived. This voluntary waiver can be terminated at any time. There was no distribution (12b-1) fee paid by the Fund (after the voluntarily waiver) for the fiscal year ended October 31, 2000. |
||
|
4 The shareholder services fee for the Institutional Services Shares has been voluntarily reduced. This voluntary reduction can be terminated at any time. The shareholder services fee paid by the Fund (after the voluntary reduction) was 0.15% for the fiscal year ended October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Institutional Service Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Institutional Service Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. Expenses assuming no redemption are also shown. The Example also assumes that your investment has a 5% return each year and that the Fund's Institutional Service Shares operating expenses are before waivers as shown in the table and remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
$ |
97 |
|
|
||
|
3 Years |
$ |
303 |
|
|
||
|
5 Years |
$ |
525 |
|
|
||
|
10 Years |
$ |
1,166 |
|
|
||
The Fund invests its assets in a portfolio of high-quality New Jersey tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and New Jersey state income tax imposed upon non-corporate taxpayers. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal income tax and New Jersey income tax imposed upon non-corporate taxpayers. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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 prices 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.
A substantial part of the Fund's portfolio may be comprised of securities issued by New Jersey issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from New Jersey, the Fund may be subject to additional risks compared to funds that invest in multiple states. New Jersey's economy is relatively diversified across the service sectors. New Jersey's economy has seen a long term trend of declining employment in manufacturing industries offset by increasing employment in the diversified services sector. Any downturn in these and other industries may adversely affect the economy of the state.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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.
When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. NAV is determined at 12:00 noon (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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
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 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, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-New Jersey taxpayers because it invests in New Jersey municipal securities.
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).
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.
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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).
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the New Jersey taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 26.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.04 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.04 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.45 |
% |
|
2.67 |
% |
|
3.01 |
% |
|
3.08 |
% |
|
3.07 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.65 |
% |
|
0.65 |
% |
|
0.65 |
% |
|
0.65 |
% |
|
0.65 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.43 |
% |
|
2.65 |
% |
|
2.95 |
% |
|
3.08 |
% |
|
3.03 |
% |
|
|
|||||||||||||||
|
Expense waiver/reimbursement3 |
|
0.30 |
% |
|
0.28 |
% |
|
0.28 |
% |
|
0.31 |
% |
|
0.37 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$66,310 |
|
$58,363 |
|
$65,240 |
|
$54,538 |
|
$28,807 |
|
||||
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--99.1%1 |
|
|
|
|
|
|
|
New Jersey--99.1% |
|
|
|
|
$ |
1,819,500 |
|
Beachwood, NJ, 5.13% BANs, 9/7/2001 |
|
$ |
1,828,735 |
|
|
1,110,000 |
|
Camden County, NJ Improvement Authority, (Series 1995) Weekly VRDNs (Jewish Federation of Southern Jersey, Inc.)/(National Westminster Bank, PLC LOC) |
|
|
1,110,000 |
|
|
4,900,000 |
|
Camden County, NJ Improvement Authority, (Series 1996) Weekly VRDNs (Parkview Redevelopment Housing Project)/(General Electric Capital Corp. LOC) |
|
|
4,900,000 |
|
|
1,896,000 |
|
Clipper Tax-Exempt Certificates Trust (New Jersey AMT), (Series 1999-8) Weekly VRDNs (New Jersey Housing & Mortgage Financing Authority)/(MBIA INS)/(State Street Bank and Trust Co. LIQ) |
|
|
1,896,000 |
|
|
6,965,000 |
|
Clipper Tax-Exempt Certificates Trust (New Jersey Non-AMT), (Series 1998-6) Weekly VRDNs (New Jersey Housing & Mortgage Financing Authority)/(MBIA INS)/(State Street Bank and Trust Co. LIQ) |
|
|
6,965,000 |
|
|
1,562,215 |
|
Franklin Borough, NJ, 4.70% BANs, 3/30/2001 |
|
|
1,564,357 |
|
|
2,000,000 |
|
Haddonfield, NJ, 5.38% BANs, 5/31/2001 |
|
|
2,004,684 |
|
|
1,000,000 |
|
Irvington Township, NJ, 4.88% BANs, 3/23/2001 |
|
|
1,001,957 |
|
|
3,205,000 |
|
Lakewood Township, NJ, 4.88% BANs, 7/27/2001 |
|
|
3,213,425 |
|
|
3,487,750 |
|
Little Egg Harbor Township, NJ, 4.63% BANs, 3/9/2001 |
|
|
3,490,730 |
|
|
2,929,700 |
|
Lower Township, NJ, 4.75% BANs, 4/6/2001 |
|
|
2,933,894 |
|
|
2,160,000 |
|
Matawan Borough, NJ, 4.63% BANs, 3/6/2001 |
|
|
2,161,738 |
|
|
1,500,000 |
|
Middlesex County, NJ PCFA, Weekly VRDNs (FMC Gold Co.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
1,500,000 |
|
|
2,400,000 |
|
New Jersey EDA, Weekly VRDNs (Center-For-Aging - Applewood Estates)/(Fleet National Bank, Springfield, MA LOC) |
|
|
2,400,000 |
|
|
2,450,000 |
|
New Jersey EDA, Weekly VRDNs (Maroukian Realty, LLC)/(Commerce Bank, N.A., Cherry Hill, NJ LOC) |
|
|
2,450,000 |
|
|
5,153,000 |
|
New Jersey EDA, Weekly VRDNs (Meridan Health Care)/(Allfirst LOC) |
|
|
5,153,000 |
|
|
2,400,000 |
|
New Jersey EDA, Weekly VRDNs (U.S. Golf Association)/(PNC Bank, N.A. LOC) |
|
|
2,400,000 |
|
|
750,000 |
|
New Jersey EDA, Weekly VRDNs (YM-YWHA of Bergen County, NJ)/(Bank of New York LOC) |
|
|
750,000 |
|
|
1,200,000 |
|
New Jersey EDA, (Series 1994A), 4.88% TOBs (A.F.L. Quality, Inc.)/(Fleet Bank N.A. LOC) Optional Tender 7/1/2001 |
|
|
1,200,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
New Jersey--continued |
|
|
|
|
$ |
275,000 |
|
New Jersey EDA, (Series 1994B), 4.88% TOBs (Two Univac, LLC)/(Fleet Bank N.A. LOC) Optional Tender 7/1/2001 |
|
$ |
275,000 |
|
|
4,100,000 |
|
New Jersey EDA, (Series 1985) Weekly VRDNs (Seton Co.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
4,100,000 |
|
|
280,000 |
|
New Jersey EDA, (Series 1987G) Weekly VRDNs (W.Y. Urban Renewal)/(National Westminster Bank, PLC LOC) |
|
|
280,000 |
|
|
3,000,000 |
|
New Jersey EDA, (Series 1990) Weekly VRDNs (Genlyte Camden County)/(Bank of America, N.A. LOC) |
|
|
3,000,000 |
|
|
860,000 |
|
New Jersey EDA, (Series 1992D-1) Weekly VRDNs (Danlin Corp.)/(Banque Nationale de Paris LOC) |
|
|
860,000 |
|
|
2,355,000 |
|
New Jersey EDA, (Series 1992L) Weekly VRDNs (Kent Place School)/ (Banque Nationale de Paris LOC) |
|
|
2,355,000 |
|
|
1,275,000 |
|
New Jersey EDA, (Series 1995) Weekly VRDNs (International Vitamin Corporation Project)/(National Westminster Bank, PLC LOC) |
|
|
1,275,000 |
|
|
2,325,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Lauffer Building Associates, Ltd.)/(Credit Suisse First Boston LOC) |
|
|
2,325,000 |
|
|
1,775,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Oakland Building Associates, Ltd.)/(Credit Suisse First Boston LOC) |
|
|
1,775,000 |
|
|
1,800,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Oakland Industrial Associates, Ltd.)/(Credit Suisse First Boston LOC) |
|
|
1,800,000 |
|
|
2,500,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Okner Parkway Associates Ltd. Partnership)/(Credit Suisse First Boston LOC) |
|
|
2,500,000 |
|
|
3,500,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Phoenix Realty Partners)/(First Union National Bank, Charlotte, NC LOC) |
|
|
3,500,000 |
|
|
1,400,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (UJA Federation of Bergan County and North Hudson, Inc.)/(Bank of New York, New York LOC) |
|
|
1,400,000 |
|
|
2,300,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Wood Hollow Associates, LLC)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,300,000 |
|
|
2,685,000 |
|
New Jersey EDA, (Series 1998) Weekly VRDNs (Deutscher Realty Co. LLC)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
2,685,000 |
|
|
3,800,000 |
|
New Jersey EDA, (Series 1998A) Weekly VRDNs (Bayshore Health Care Center)/(KBC Bank N.V. LOC) |
|
|
3,800,000 |
|
|
430,000 |
|
New Jersey EDA, (Series 1998) Weekly VRDNs (Jewish Home at Rockleigh)/(Allied Irish Banks PLC LOC) |
|
|
430,000 |
|
|
700,000 |
|
New Jersey EDA, (Series 1998) Weekly VRDNs (Jewish Home at Rockleigh)/(PNC Bank, N.A. LOC) |
|
|
700,000 |
|
|
3,750,000 |
|
New Jersey EDA, (Series 1999) Weekly VRDNs (Richmond Industries, Inc. and Richmond Realty, LLC)/(Commerce Bank, N.A., Cherry Hill, NJ LOC) |
|
|
3,750,000 |
|
|
1,665,000 |
|
New Jersey EDA, (Series 1999) Weekly VRDNs (VOADV Property, Inc.)/(Commerce Bank, N.A., Cherry Hill, NJ LOC) |
|
|
1,665,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
New Jersey--continued |
|
|
|
|
$ |
3,500,000 |
|
New Jersey EDA, (Series 1999) Weekly VRDNs (White Wave, Inc.)/(KeyBank, N.A. LOC) |
|
$ |
3,500,000 |
|
|
5,780,000 |
|
New Jersey EDA, (Series 2000), 4.50% TOBs (Dallas Airmotive, Inc.)/(Bayerische Landesbank Girozentrale LOC), Optional Tender 12/1/2000 |
|
|
5,780,000 |
|
|
960,000 |
|
New Jersey EDA, (Series A) Weekly VRDNs (325 Midland Avenue, LLC & Wearbest Sil-Tex, Ltd.)/(Bank of New York, New York LOC) |
|
|
960,000 |
|
|
80,000 |
|
New Jersey EDA, (Series B) Weekly VRDNs (325 Midland Avenue, LLC & Wearbest Sil-Tex, Ltd.)/(Bank of New York, New York LOC) |
|
|
80,000 |
|
|
300,000 |
|
New Jersey EDA, (Series W) Weekly VRDNs (Datatec Industries, Inc.)/ (Banque Nationale de Paris LOC) |
|
|
300,000 |
|
|
2,815,000 |
|
New Jersey EDA, Economic Development Bonds, Weekly VRDNs (Atlantic States Cast Iron Pipe Co.)/(Amsouth Bank N.A., Birmingham LOC) |
|
|
2,815,000 |
|
|
4,800,000 |
|
New Jersey EDA, Port Facility Revenue Bonds, (Series 1983) Weekly VRDNs (Trailer Marine Transport Corp.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
4,800,000 |
|
|
6,160,000 |
|
New Jersey Housing & Mortgage Financing Authority, CDC Municipal Products Class A Certificates (Series 1996B) Weekly VRDNs (MBIA INS)/(CDC Municipal Projects, Inc. LIQ) |
|
|
6,160,000 |
|
|
2,500,000 |
|
New Jersey Housing & Mortgage Financing Authority, MERLOTS, (Series 2000 A2) Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
2,500,000 |
|
|
3,530,000 |
|
New Jersey State Transportation Trust Fund Authority, Floater Certificates, (Series 1998-54) Weekly VRDNs (FSA INS)/(Morgan Stanley, Dean Witter Municipal Funding Inc. LIQ) |
|
|
3,530,000 |
|
|
4,000,000 |
|
New Jersey State, (Series Fiscal 2001A), 4.25% CP, Mandatory Tender 12/7/2000 |
|
|
4,000,000 |
|
|
1,555,000 |
|
Newton, NJ, 5.00% BANs, 8/24/2001 |
|
|
1,561,028 |
|
|
4,750,000 |
|
Ocean City, NJ, 5.00% BANs, 12/15/2000 |
|
|
4,752,223 |
|
|
1,000,000 |
|
Passaic Valley, NJ Water Commission, 1999 Water Supply System Subordinated Project Notes, 4.50% BANs (PNC Bank, N.A. LOC) 11/14/2000 |
|
|
1,000,232 |
|
|
2,186,000 |
|
Patterson, NJ, 5.25% BANs, 6/15/2001 |
|
|
2,193,431 |
|
|
1,034,159 |
|
Phillipsburg, NJ, 5.38% BANs, 6/13/2001 |
|
|
1,038,222 |
|
|
10,000,000 |
|
Port Authority of New York and New Jersey, (Series 1991-4) Weekly VRDNs |
|
|
10,000,000 |
|
|
1,000,000 |
|
Sea Isle City, NJ, 4.88% BANs, 9/28/2001 |
|
|
1,003,669 |
|
|
2,000,000 |
|
Sea Isle City, NJ, 5.00% BANs, 6/21/2001 |
|
|
2,003,636 |
|
|
1,590,000 |
|
Trenton, NJ, 4.60% BANs, 10/19/2001 |
|
|
1,592,929 |
|
|
3,999,921 |
|
Warren County, NJ, 4.50% BANs, 2/15/2001 |
|
|
4,001,366 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
New Jersey--continued |
|
|
|
|
$ |
5,665,000 |
|
Washington Borough, NJ, 4.25% BANs, 12/8/2000 |
|
$ |
5,666,376 |
|
|
5,317,107 |
|
Washington Township, NJ, 5.00% BANs, (Warren County), 3/1/2001 |
|
|
5,325,457 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)2 |
|
$ |
164,262,089 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 29.7% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by NRSROs or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 and F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
86.7% |
|
13.3% |
2 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($165,811,270) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMT |
--Alternative Minimum Tax |
|
BANs |
--Bond Anticipation Notes |
|
CP |
--Commercial Paper |
|
EDA |
--Economic Development Authority |
|
FSA |
--Financial Security Assurance |
|
INS |
--Insured |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
PCFA |
--Pollution Control Finance Authority |
|
TOBs |
--Tender Option Bonds |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
164,262,089 |
|
Cash |
|
|
|
|
|
228,087 |
|
Income receivable |
|
|
|
|
|
1,629,866 |
|
Receivable for shares sold |
|
|
|
|
|
215,591 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
166,335,633 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
78,457 |
|
|
|
|
Income distribution payable |
|
|
417,839 |
|
|
|
|
Accrued expenses |
|
|
28,067 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
524,363 |
|
|
||||||
|
Net assets for 165,811,270 shares outstanding |
|
|
|
|
$ |
165,811,270 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
$99,501,502 ÷ 99,501,502 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Institutional Service Shares: |
|
|
|
|
|
|
|
$66,309,768 ÷ 66,309,768 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
7,434,477 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
732,578 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
155,000 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
9,542 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
55,293 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
2,028 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
9,856 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
16,627 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
57,557 |
|
|
|
|
|
Distribution services fee--Institutional Service Shares |
|
|
|
|
|
|
70,946 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
280,495 |
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
177,366 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
29,059 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
21,071 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
10,610 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
2,171 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
1,630,199 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(177,612 |
) |
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Institutional Service Shares |
|
|
(70,946 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(224,396 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(70,946 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(543,900 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
1,086,299 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
6,348,178 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
6,348,178 |
|
|
$ |
5,185,517 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(3,914,007 |
) |
|
|
(3,366,649 |
) |
|
Institutional Service Shares |
|
|
(2,434,171 |
) |
|
|
(1,818,868 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(6,348,178 |
) |
|
|
(5,185,517 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
576,169,418 |
|
|
|
563,331,396 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
1,456,724 |
|
|
|
1,077,052 |
|
|
Cost of shares redeemed |
|
|
(582,316,362 |
) |
|
|
(565,179,843 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(4,690,220 |
) |
|
|
(771,395 |
) |
|
|
||||||||
|
Change in net assets |
|
|
(4,690,220 |
) |
|
|
(771,395 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
170,501,490 |
|
|
|
171,272,885 |
|
|
|
||||||||
|
End of period |
|
$ |
165,811,270 |
|
|
$ |
170,501,490 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
New Jersey Municipal Cash Trust (the "Fund") a portfolio of the Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Shares and Institutional Service Shares. The investment objective of the Fund is to provide current income which is exempt from federal regular income tax and New Jersey state income tax imposed upon non-corporate taxpayers consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
330,149,109 |
|
|
401,625,092 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
28,713 |
|
|
26,129 |
|
|
Shares redeemed |
|
(342,814,680 |
) |
|
(395,545,299 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
(12,636,858 |
) |
|
6,105,922 |
|
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
Shares sold |
|
246,020,309 |
|
|
161,706,304 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
1,428,011 |
|
|
1,050,923 |
|
|
Shares redeemed |
|
(239,501,682 |
) |
|
(169,634,544 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
7,946,638 |
|
|
(6,877,317 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(4,690,220 |
) |
|
(771,395 |
) |
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Funds with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Institutional Service Shares. The Plan provides that the Fund may incur distribution expenses up to 0.10% of the average daily net assets of the Institutional Service Shares, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $258,465,000 and $261,380,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 62.7% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 10.7% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the New Jersey Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the New Jersey Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000 is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report, to shareholders as they become available. To obtain the SAI, the Semi-Annual Report and other information without charge, and make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
New Jersey Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N468
0100802A-SS (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and the personal income tax imposed by New York State and New York municipalities by investing in a portfolio of short-term, high-quality New York tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What Are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 7
What Do Shares Cost? 8
How is the Fund Sold? 8
How to Purchase Shares 9
How to Redeem Shares 11
Account and Share Information 14
Who Manages the Fund? 15
Financial Information 16
Report of Ernst & Young LLP, Independent Auditors 34
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income which is exempt from federal regular income tax and the personal income taxes imposed by New York State and New York municipalities 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.
The Fund invests in short-term, high-quality New York tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and the personal income taxes imposed by New York State and New York municipalities or so that at least 80% of its net assets is invested in obligations, the interest income from which is exempt from federal regular income tax and the personal income taxes imposed by New York State and New York municipalities. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 net asset value per Share. The bar chart shows the variability of the Fund's Cash II Shares total returns on a calendar year-end basis.
The Fund's Cash II Shares were not sold subject to a sales charge (load). The total returns displayed above are based upon net asset value.
The Fund's Cash II Shares total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.58%.
Within the period shown in the chart, the Fund's Cash II Shares highest quarterly return was 0.88% (quarter ended June 30, 1995). Its lowest quarterly return was 0.45% (quarter ended March 31, 1994).
The following table represents the Fund's Cash II Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.73% |
|
|
||
|
5 Years |
|
3.04% |
|
|
||
|
Start of Performance1 |
|
2.87% |
|
|
||
1 The Fund's Cash II Shares start of performance date was April 25, 1991.
The Fund's Cash II Shares 7-Day Net Yield as of December 31, 1999 was 3.93%. Investors may call the Fund at 1-800-341-7400 to acquire the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund's Cash II Shares.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price). |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.40% |
|
Distribution (12b-1) Fee3 |
|
0.25% |
|
Shareholder Services Fee |
|
0.25% |
|
Other Expenses |
|
0.12% |
|
Total Annual Fund Operating Expenses |
|
1.02% |
|
1 Although not contractually obligated to do so, the adviser and distributor waived certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ending October 31, 2000. |
||
|
Total Waiver of Fund Expenses |
|
0.31% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.71% |
|
2 The adviser has voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.34% for the fiscal year ending October 31, 2000. |
||
|
3 The distributor has voluntarily waived a portion of the distribution (12b-1) fee. The distributor can terminate this voluntary waiver at any time. The distribution (12b-1) fee paid by the Fund's Cash II Shares (after the voluntary waiver) was 0.00% for the fiscal year ending October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Cash II Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Cash II Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's Cash II Shares operating expenses are before waivers as shown above and remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
|
$ 104 |
|
3 Years |
|
$ 325 |
|
5 Years |
|
$ 563 |
|
10 Years |
|
$1,248 |
The Fund invests in a portfolio of high-quality New York tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and the personal income taxes imposed by New York State and New York municipalities or so that at least 80% of its net assets is invested in obligations, the interest income from which is exempt from federal regular income tax and the personal income taxes imposed by New York State and New York municipalities. Interest from the Fund's investments may be subject to the AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal and New York income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit rating from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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.
A substantial part of the Fund's portfolio may be comprised of securities issued by New York issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from New York, the Fund may be subject to additional risks compared to funds that invest in multiple states. New York's economy is relatively diversified across the manufacturing, agricultural and services sectors. However, New York City is a major component of the state's economy and is therefore heavily dependent on the historically volatile financial, real estate and insurance industries.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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.
When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. 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 $10,000. There is no required minimum subsequent investment amount. An account may be opened with a smaller amount as long as the $10,000 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.
The Fund offers two share classes: Institutional Service Shares and Cash II Shares, each representing interests in a single portfolio of securities. This prospectus relates only to Cash II Shares. Each share class has different expenses, which affect their performance. Contact your investment professional or call 1-800-341-7400 for more information concerning the other class.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-New York taxpayers because it invests in New York municipal securities.
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).
The Fund has adopted a Rule 12b-1 Plan, which allows it to pay marketing fees to the Distributor and investment professionals for the sale, distribution and customer servicing of the Fund's Cash II Shares. Because these Shares pay marketing fees on an ongoing basis, your investment cost may be higher over time than other shares with different sales charges and marketing fees.
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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).
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the New York state taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, page 34.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03) |
|
|
(0.03) |
|
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.44 |
% |
|
2.67 |
% |
|
3.02 |
% |
|
3.07 |
% |
|
3.05 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.71 |
% |
|
0.71 |
% |
|
0.71 |
% |
|
0.71 |
% |
|
0.71 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.40 |
% |
|
2.67 |
% |
|
2.98 |
% |
|
3.01 |
% |
|
3.02 |
% |
|
|
|||||||||||||||
|
Expense waiver/reimbursement3 |
|
0.31 |
% |
|
0.33 |
% |
|
0.34 |
% |
|
0.34 |
% |
|
0.36 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$97,396 |
|
|
$62,713 |
|
|
$43,957 |
|
|
$21,402 |
|
|
$25,571 |
|
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--99.0%1 |
|
|
|
|
|
|
|
New York--98.9% |
|
|
|
|
$ |
13,150,000 |
|
ABN AMRO MuniTOPS Certificates Trust (New York Non-AMT), (Series 1999-2) Weekly VRDNs (Metropolitan Transportation Authority, NY)/ (FSA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) |
|
$ |
13,150,000 |
|
|
10,000,000 |
|
Alexander, NY Central School District, 4.88% BANs, 6/18/2001 |
|
|
10,016,505 |
|
|
7,000,000 |
|
Binghamton, NY, 4.60% BANs, 9/27/2001 |
|
|
7,013,898 |
|
|
5,960,000 |
|
Cattaraugus County, NY IDA, (Series 1999A) Weekly VRDNs (Gernatt Asphalt Products, Inc.)/(Manufacturer's & Traders Trust Co., Buffalo, NY LOC) |
|
|
5,960,000 |
|
|
3,380,000 |
|
Cayuga County, NY IDA, (Series 1998) Weekly VRDNs (NFR Northeast, Inc.)/(KeyBank, N.A. LOC) |
|
|
3,380,000 |
|
|
6,000,000 |
|
Central Islip, NY Union Free School District, 4.70% TANs, 6/29/2001 |
|
|
6,010,184 |
|
|
3,900,000 |
|
Chautauqua County, NY IDA Weekly VRDNs (Mogen David Wine Corp.)/(Wells Fargo Bank, N.A. LOC) |
|
|
3,900,000 |
|
|
3,500,000 |
|
Chautauqua County, NY IDA, (Series 1999A) Weekly VRDNs (National Bedding Company)/(Bank of America, N.A. LOC) |
|
|
3,500,000 |
|
|
29,902,000 |
|
Clipper Tax-Exempt Trust (New York AMT), Series, 1998-10 Weekly VRDNs (New York State Mortgage Agency)/(State Street Bank and Trust Co. LIQ) |
|
|
29,902,000 |
|
|
740,000 |
|
Colonie, NY IDA Weekly VRDNs (Herbert S. Ellis)/(HSBC Bank USA LOC) |
|
|
740,000 |
|
|
600,000 |
|
Colonie, NY IDA, (Series 1988) Weekly VRDNs (Specialty Retailers, Inc.)/(HSBC Bank USA LOC) |
|
|
600,000 |
|
|
2,305,000 |
|
Columbia County, NY IDA, (Series 1998A) Weekly VRDNs (Empire Homes, LLC)/(KeyBank, N.A. LOC) |
|
|
2,305,000 |
|
|
8,500,000 |
|
Copiague, NY Union Free School District, 4.75% TANs, 6/27/2001 |
|
|
8,513,256 |
|
|
3,000,000 |
|
Copiague, NY Union Free School District, 5.00% TANs, 6/27/2001 |
|
|
3,008,991 |
|
|
5,200,000 |
|
Corinth, NY IDA, Solid Waste Disposal Revenue Bonds, (Series A), 4.90% TOBs (International Paper Co.), Optional Tender 3/1/2001 |
|
|
5,200,000 |
|
|
5,300,000 |
|
Dolgeville, NY Central School District, 4.25% BANs, 12/13/2000 |
|
|
5,301,168 |
|
|
1,000,000 |
|
Dutchess County, NY IDA, Series 1995 Weekly VRDNs (Laerdal Medical Corp.)/(Bank of New York, NY LOC) |
|
|
1,000,000 |
|
|
2,360,082 |
|
Elba, NY Central School District, 4.75% BANs, 4/27/2001 |
|
|
2,362,817 |
|
|
4,900,000 |
|
Erie County, NY IDA, (Series 1998) Weekly VRDNs (Alden Scientific Corp.)/(KeyBank, N.A. LOC) |
|
|
4,900,000 |
|
|
1,910,000 |
|
Erie County, NY IDA, (Series A) Weekly VRDNs (Gemcor)/(HSBC Bank USA LOC) |
|
|
1,910,000 |
|
|
5,000,000 |
|
Erie County, NY IDA, IDRB, (Series 1994) Weekly VRDNs (Servotronics, Inc. Project)/(Fleet Bank N.A. LOC) |
|
|
5,000,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued |
|
|
|
|
|
|
|
New York--continued |
|
|
|
|
$ |
1,300,000 |
|
Guilderland, NY IDA, (Series 1993A) Weekly VRDNs (Northeastern Industrial Park, Inc.)/(Fleet Bank N.A. LOC) |
|
$ |
1,300,000 |
|
|
3,855,000 |
|
Hempstead, NY IDA, (Allied Waste Series 1999) Weekly VRDNs (American Ref-Fuel Co.)/(Chase Bank of Texas LOC) |
|
|
3,855,000 |
|
|
3,060,000 |
|
Herkimer County, NY IDA, 1994 IDRB Weekly VRDNs (Granny's Kitchen)/(Bank of New York, NY LOC) |
|
|
3,060,000 |
|
|
4,881,000 |
|
Highland, NY Central School District, 4.25% BANs, 11/10/2000 |
|
|
4,881,403 |
|
|
1,740,000 |
|
Homer, NY Central School District, 4.65% RANs, 7/29/2001 |
|
|
1,741,834 |
|
|
5,745,000 |
|
Livingston County, NY, 5.00% BANs, 8/15/2001 |
|
|
5,770,929 |
|
|
21,000,000 |
|
Long Island Power Authority, PA-522 Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ)/(FSA INS) |
|
|
21,000,000 |
|
|
12,500,000 |
|
Long Island Power Authority, Elecric System Subordinated Revenue Bonds, (Series 1) Weekly VRDNs (Bayerische Landesbank Girozentrale and Westdeutsche Landesbank Girozentrale LOCs) |
|
|
12,500,000 |
|
|
2,330,000 |
|
Long Island Power Authority, Floater Certificates, (Series 1998-66) Weekly VRDNs (MBIA INS)/(Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ) |
|
|
2,330,000 |
|
|
7,595,000 |
|
Long Island Power Authority, PA-513R Weekly VRDNs (FSA INS)/(Merrill Lynch Capital Services, Inc. LIQ) |
|
|
7,595,000 |
|
|
1,445,000 |
|
Madison County, NY IDA, (Series 1989A) Weekly VRDNs (Madison, NY Upstate Metals)/(Fleet Bank N.A. LOC) |
|
|
1,445,000 |
|
|
11,600,000 |
|
Madison County, NY IDA, (Series 1999A) Weekly VRDNs (Cazenovia College)/(Manufacturer's & Traders Trust Co., Buffalo, NY LOC) |
|
|
11,600,000 |
|
|
3,400,000 |
|
Madison County, NY IDA, (Series A) Weekly VRDNs (Owl Wire and Cable)/(KeyBank, N.A. LOC) |
|
|
3,400,000 |
|
|
4,437,500 |
|
Mayfield, NY Central School District, 4.50% BANs, 11/22/2000 |
|
|
4,438,723 |
|
|
4,142,057 |
|
Mayfield, NY Central School District, 5.00% BANs, 6/28/2001 |
|
|
4,150,329 |
|
|
26,095,000 |
|
Metropolitan Transportation Authority, NY, MERLOTS, (Series 1997 C-2) Weekly VRDNs (FGIC INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
26,095,000 |
|
|
4,265,000 |
|
Metropolitan Transportation Authority, NY, Trust Receipts, (Series 1997 FR/RI-9) Weekly VRDNs (FGIC INS)/(Bank of New York, NY LIQ) |
|
|
4,265,000 |
|
|
4,695,000 |
|
Middletown, NY, 4.60% BANs, 8/31/2001 |
|
|
4,702,444 |
|
|
3,100,000 |
|
Monroe County, NY IDA, (Series 2000) Weekly VRDNs (Eldre Corp.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
3,100,000 |
|
|
2,835,000 |
|
Monroe County, NY IDA, (Series 2000) Weekly VRDNs (Hover-Davis, Inc.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
2,835,000 |
|
|
5,000,000 |
|
Nassau County, NY, (Series 1999C), 4.75% TANs (First Union National Bank, Charlotte, NC LOC), 12/21/2000 |
|
|
5,004,603 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued |
|
|
|
|
|
|
|
New York--continued |
|
|
|
|
$ |
7,000,000 |
|
Nassau County, NY, (Series A), 6.00% RANs (Bank of Nova Scotia, Toronto and First Union National Bank, Charlotte, NC LOCs), 3/20/2001 |
|
$ |
7,039,325 |
|
|
9,000,000 |
|
Nassau County, NY, (Series C), 6.00% RANs (Bank of Nova Scotia, Toronto and First Union National Bank, Charlotte, NC LOCs), 4/13/2001 |
|
|
9,058,782 |
|
|
4,740,000 |
|
New York City Housing Development Corp., Municipal Securities Trust Receipts, (Series 1996-CMC1A) Weekly VRDNs (Chase Manhattan Corp. LIQ) |
|
|
4,740,000 |
|
|
4,735,000 |
|
New York City Housing Development Corp., Municipal Securities Trust Receipts, (Series 1996-CMC1B) Weekly VRDNs (Chase Manhattan Corp. LIQ) |
|
|
4,735,000 |
|
|
18,240,000 |
|
New York City Municipal Water Finance Authority, PA-523 Weekly VRDNs (FGIC INS)/(Merrill Lynch Capital Services, Inc. LIQ) |
|
|
18,240,000 |
|
|
8,000,000 |
|
New York City Trust For Cultural Resources, (Series 2000) Weekly VRDNs (Manhattan School of Music)/(Asset Guaranty INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
8,000,000 |
|
|
9,900,000 |
|
New York City, NY IDA, (Series 2000) Weekly VRDNs (Jewish Community Center on the Upper West Side, Inc.)/(Manufacturer's & Traders Trust Co., Buffalo, NY LOC) |
|
|
9,900,000 |
|
|
6,845,000 |
|
New York City, NY IDA, CDC 1997H - Class A Certificates, Weekly VRDNs (Japan Airlines Co.)/(FSA INS)/(CDC Municipal Products, Inc. LIQ) |
|
|
6,845,000 |
|
|
7,630,000 |
|
New York City, NY IDA, CDC Municipal Products, (Series 1998D) Weekly VRDNs (Japan Airlines Co.)/(FSA INS)/(CDC Municipal Products, Inc. LIQ) |
|
|
7,630,000 |
|
|
3,280,000 |
|
New York City, NY IDA, CDC Municipal Products, (Series 1996H) Weekly VRDNs (Japan Airlines Co.)/(FSA INS)/(CDC Municipal Products, Inc. LIQ) |
|
|
3,280,000 |
|
|
8,285,000 |
|
New York City, NY IDA, Class A Certificates, (Series CDC-1997E) Weekly VRDNs (Japan Airlines Co.)/(FSA INS)/(CDC Municipal Products, Inc. LIQ) |
|
|
8,285,000 |
|
|
6,390,000 |
|
New York City, NY Transitional Finance Authority, (Subseries 1998A-1) Weekly VRDNs (Morgan Guaranty Trust Co., NY LIQ) |
|
|
6,390,000 |
|
|
4,295,000 |
|
New York City, NY Transitional Finance Authority, (Subseries 1999B-3) Weekly VRDNs (Bank One, N.A. LIQ) |
|
|
4,295,000 |
|
|
9,990,000 |
|
New York City, NY Transitional Finance Authority, (Series 1999B) MERLOTS Weekly VRDNs (First Union National Bank, Charlotte, NC LIQ) |
|
|
9,990,000 |
|
|
3,835,000 |
|
New York City, NY Transitional Finance Authority, (Series A, Subseries A-1) Weekly VRDNs (Societe Generale, Paris LIQ) |
|
|
3,835,000 |
|
|
7,000,000 |
|
New York City, NY Transitional Finance Authority, BANs, (Series 2000 FR/RI-A16) Daily VRDNs (Bayerische Hypotheken-und Vereinsbank AG LIQ) |
|
|
7,000,000 |
|
|
8,300,000 |
2 |
New York City, NY Transitional Finance Authority, PT-1047, TOBs (Bank of America, N.A. LIQ), Optional Tender 11/15/2000 |
|
|
8,300,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued |
|
|
|
|
|
|
|
New York--continued |
|
|
|
|
$ |
6,000,000 |
|
New York City, NY, PA-156, Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ)/(Merrill Lynch Capital Services, Inc. LOC) |
|
$ |
6,000,000 |
|
|
2,310,000 |
|
New York City, NY, (Series J), 5.00% Bonds, 5/15/2001 |
|
|
2,315,938 |
|
|
1,600,000 |
|
New York City, NY, (Series J-3) Weekly VRDNs (Morgan Guaranty Trust Co., NY LOC) |
|
|
1,600,000 |
|
|
1,800,000 |
|
New York State Dormitory Authority, (Series 1990B) Daily VRDNs (Cornell University)/(Morgan Guaranty Trust Co., New York LIQ) |
|
|
1,800,000 |
|
|
7,500,000 |
|
New York State Dormitory Authority, MERLOTS, (Series 2000 X) Weekly VRDNs (Sloan-Kettering Memorial Cancer Center)/(MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
7,500,000 |
|
|
10,475,000 |
|
New York State Dormitory Authority, PA-60, (Series 1993) Weekly VRDNs (Rochester General Hospital)/(FHA INS)/(Merrill Lynch Capital Services, Inc. LIQ) |
|
|
10,475,000 |
|
|
5,960,000 |
2 |
New York State Dormitory Authority, PT-128, 4.55% TOBs (Rosalind & Joseph Gurwin Jewish Geriatric Center of Long Island, Inc.)/(AMBAC INS)/(Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 6/22/2001 |
|
|
5,960,000 |
|
|
5,920,000 |
|
New York State Dormitory Authority, PT-130, (Series 1997) Weekly VRDNs (United Health Services Hospitals, Inc.)/(AMBAC INS)/(Merrill Lynch Capital Services, Inc. LIQ) |
|
|
5,920,000 |
|
|
7,375,000 |
|
New York State Dormitory Authority, PT-75, Weekly VRDNs (Ellis Hospital)/(MBIA INS)/(Merrill Lynch Capital Services, Inc. LIQ) |
|
|
7,375,000 |
|
|
5,445,000 |
|
New York State Energy Research & Development Authority, PA-144, Weekly VRDNs (Long Island Lighting Co.)/(Merrill Lynch Capital Services, Inc. LIQ)/(Merrill Lynch Capital Services, Inc. LOC) |
|
|
5,445,000 |
|
|
24,000,000 |
|
New York State HFA, (Series 2000A) Weekly VRDNs (39th Street Associates)/(KeyBank, N.A. LOC) |
|
|
24,000,000 |
|
|
13,500,000 |
|
New York State Local Government Assistance Corp., (Series 1995B) Weekly VRDNs (Bank of Nova Scotia, Toronto LOC) |
|
|
13,500,000 |
|
|
20,000,000 |
|
New York State Local Government Assistance Corp., (Series 1995E) Weekly VRDNs (Landesbank Hessen-Thueringen, Frankfurt and Societe Generale, Paris LOCs) |
|
|
20,000,000 |
|
|
11,990,000 |
|
New York State Medical Care Facilities Finance Agency, (Series 1992 B PT-100) Daily VRDNs (FHA INS)/(Merrill Lynch Capital Services, Inc. LIQ) |
|
|
11,990,000 |
|
|
3,160,000 |
|
New York State Medical Care Facilities Finance Agency, Hospital Insured Mortgage Revenue Bonds, PT-154, Weekly VRDNs (FHA INS)/(Banco Santander Central Hispano, S.A. LIQ) |
|
|
3,160,000 |
|
|
14,495,000 |
|
New York State Mortgage Agency, PA-422, Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) |
|
|
14,495,000 |
|
|
3,700,000 |
|
New York State Mortgage Agency, (Series PA-29) Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) |
|
|
3,700,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued |
|
|
|
|
|
|
|
New York--continued |
|
|
|
|
$ |
2,020,000 |
|
New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds, (Series PT-15B) Weekly VRDNs (Commerzbank AG, Frankfurt LIQ) |
|
$ |
2,020,000 |
|
|
10,000,000 |
|
New York State Mortgage Agency, MERLOTS, (Series 2000B) Weekly VRDNs (First Union National Bank, Charlotte, NC LIQ) |
|
|
10,000,000 |
|
|
8,645,000 |
|
New York State Mortgage Agency, PA-406, Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) |
|
|
8,645,000 |
|
|
10,000,000 |
|
New York State Power Authority, General Purpose Refunding Revenue Bonds, (Series Y), 6.75% Bonds (United States Treasury PRF), 1/1/2001 (@102) |
|
|
10,241,391 |
|
|
10,000,000 |
|
New York State Thruway Authority, PA-172, Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) |
|
|
10,000,000 |
|
|
10,000,000 |
|
New York State Thruway Authority, (Series CP-1), 4.20% CP, Mandatory Tender 12/6/2000 |
|
|
10,000,000 |
|
|
6,000,000 |
2 |
New York State Thruway Authority, (Series E PT-1141), 4.30% TOBs (Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 2/15/2001 |
|
|
6,000,000 |
|
|
8,400,000 |
|
New York State Urban Development Corp., Municipal Securities Trust Receipts, (Series 1996-CMC6) Weekly VRDNs (Chase Manhattan Corp. LIQ) |
|
|
8,400,000 |
|
|
12,520,000 |
|
Niagara County, NY IDA, Solid Waste Disposal Facility Revenue Bonds, (Series 1994A) Weekly VRDNs (American Ref-Fuel Co.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
12,520,000 |
|
|
6,000,000 |
|
Olean, NY City School District, 4.625% BANs, 3/8/2001 |
|
|
6,005,094 |
|
|
1,700,000 |
|
Olean, NY City School District, 4.875% BANs, 2/15/2001 |
|
|
1,701,290 |
|
|
1,040,000 |
|
Onondaga County, NY IDA, (Series 1997) Weekly VRDNs (General Super Plating Co., Inc.)/(KeyBank, N.A. LOC) |
|
|
1,040,000 |
|
|
3,980,000 |
|
Onondaga County, NY IDA, (Series 1999A) Weekly VRDNs (Christian Brothers Academy of Syracuse, NY)/(KeyBank, N.A. LOC) |
|
|
3,980,000 |
|
|
2,250,000 |
|
Onondaga County, NY IDA, (Series 2000) Weekly VRDNs (M.S. Kennedy Corp.)/(KeyBank, N.A. LOC) |
|
|
2,250,000 |
|
|
1,725,000 |
|
Onondaga County, NY Weekly VRDNs (Grainger (W.W.), Inc.) |
|
|
1,725,000 |
|
|
1,100,000 |
|
Ontario, NY IDA Weekly VRDNs (Hillcrest Enterprises/Buckeye Corrugated)/(National City Bank, Ohio LOC) |
|
|
1,100,000 |
|
|
5,700,000 |
|
Oswego County, NY IDA Weekly VRDNs (Copperweld Corp.)/(Credit Lyonnais Paris LOC) |
|
|
5,700,000 |
|
|
1,765,000 |
|
Palmyra-Macedon, NY Central School District, 4.75% BANs, 4/19/2001 |
|
|
1,767,737 |
|
|
9,500,000 |
|
Peru, NY Central School District, 4.25% BANs, 12/29/2000 |
|
|
9,502,168 |
|
|
15,000,000 |
|
Port Authority of New York and New Jersey Weekly VRDNs |
|
|
15,000,000 |
|
|
15,000,000 |
|
Port Authority of New York and New Jersey Weekly VRDNs |
|
|
15,000,000 |
|
|
5,095,000 |
|
Port Authority of New York and New Jersey, MERLOTS, (Series Z) Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
5,095,000 |
|
|
2,728,793 |
|
Portville, NY Central School District, 4.75% BANs, 8/30/2001 |
|
|
2,734,618 |
|
|
3,000,000 |
|
Red Creek, NY Central School District, 5.00% RANs, 6/28/2001 |
|
|
3,008,450 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued |
|
|
|
|
|
|
|
New York--continued |
|
|
|
|
$ |
4,500,000 |
|
Riverhead, NY IDA, IDRB, (Series 1998) Weekly VRDNs (Altaire Pharmaceuticals, Inc.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
$ |
4,500,000 |
|
|
955,000 |
|
Rotterdam, NY IDA, (Series 1993A) Weekly VRDNs (Rotterdam Industrial Park)/(Fleet Bank N.A. LOC) |
|
|
955,000 |
|
|
1,365,000 |
|
Schenectady, NY IDA, IDRB, (Series 1995A) Weekly VRDNs (Fortitech Holding Corporation Project)/(Fleet Bank N.A. LOC) |
|
|
1,365,000 |
|
|
4,000,000 |
|
Skaneateles, NY Central School District, 5.00% BANs, 6/19/2001 |
|
|
4,005,999 |
|
|
2,560,000 |
|
Southeast, NY IDA, IDRB, (Series 1995) Weekly VRDNs (Dairy Conveyor Corp. Project)/(Chase Manhattan Bank N.A., NY LOC) |
|
|
2,560,000 |
|
|
3,220,000 |
|
Southeast, NY IDA, Variable Rate IDRB 1996 Weekly VRDNs (The Rawplug Company, Inc.)/(Bank of New York, NY LOC) |
|
|
3,220,000 |
|
|
16,521,100 |
|
Southwestern, NY Central School District, 5.00% BANs, 6/26/2001 |
|
|
16,572,410 |
|
|
2,500,000 |
|
St. Lawrence County, NY IDA, (Series 1998A) Weekly VRDNs (Alcoa, Inc.) |
|
|
2,500,000 |
|
|
3,015,000 |
|
St. Lawrence County, NY IDA, Civic Facility Revenue Bonds, (Series 1990) Weekly VRDNs (Clarkson University)/(Fleet Bank N.A. LOC) |
|
|
3,015,000 |
|
|
750,000 |
|
Suffolk County, NY IDA Weekly VRDNs (YM-YWHA of Suffolk)/(European American Bank, NY LOC) |
|
|
750,000 |
|
|
2,710,000 |
|
Suffolk County, NY IDA, (Series 1997B) Weekly VRDNs (Maryhaven Center of Hope)/(KeyBank, N.A. LOC) |
|
|
2,710,000 |
|
|
1,800,000 |
|
Suffolk County, NY IDA, 6.175% TOBs (Grainger (W.W.), Inc.), Optional Tender 12/1/2000 |
|
|
1,800,000 |
|
|
8,000,000 |
|
Syracuse, NY IDA Syracuse Weekly VRDNs (Crouse Health Hospital Cardiology)/(Manufacturer's & Traders Trust Co., Buffalo, NY LOC) |
|
|
8,000,000 |
|
|
4,302,000 |
|
Syracuse, NY, 4.80% BANs, 2/28/2001 |
|
|
4,304,673 |
|
|
5,200,000 |
|
Triborough Bridge & Tunnel Authority, NY, MERLOTS, (Series 2000 SS) Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
5,200,000 |
|
|
16,750,000 |
|
Triborough Bridge & Tunnel Authority, NY, Trust Receipt, (Series 2000 FR/RI-N15) Weekly VRDNs (Bank of New York LIQ) |
|
|
16,750,000 |
|
|
17,000,000 |
2 |
Triborough Bridge & Tunnel Authority, NY, Trust Receipt, (Series 2000 FR/RI-N16), 4.35% TOBs (Bank of New York LIQ) 1/1/2001 |
|
|
17,000,000 |
|
|
29,000,000 |
|
(Triborough Bridge & Tunnel Authority, NY, Trust Receipt, (Series 2000 FR/RI-N17) Weekly VRDNs (Bank of New York LIQ) |
|
|
29,000,000 |
|
|
6,745,000 |
|
Trumansburg, NY Central School District, 4.70% BANs, 4/12/2001 |
|
|
6,753,592 |
|
|
5,300,000 |
|
VRDC/IVRC Trust, (Series 1992A) Weekly VRDNs (New York City Municipal Water Finance Authority)/(MBIA INS)(Citibank N.A., New York LIQ) |
|
|
5,300,000 |
|
|
9,900,000 |
|
VRDC/IVRC Trust, (Series 1993B) Weekly VRDNs (Metropolitan Transportation Authority, NY)/(AMBAC INS)/(Citibank N.A., New York LIQ) |
|
|
9,900,000 |
|
|
14,400,000 |
|
VRDC/IVRC Trust, (Series 1993G) Weekly VRDNs (St. Lukes Roosevelt Hospital Center)/(FHA INS)/(Chase Manhattan Bank N.A., NY LIQ) |
|
|
14,400,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued |
|
|
|
|
|
|
|
New York--continued |
|
|
|
|
$ |
7,500,000 |
|
Walden Village, NY IDA, IDRB, (Series 1994) Weekly VRDNs (Spence Engineering Co.)/(First Union National Bank, Charlotte, NC LOC) |
|
$ |
7,500,000 |
|
|
3,660,000 |
|
Warren & Washington Counties, NY IDA Weekly VRDNs (Sandy Hill Corp.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
3,660,000 |
|
|
3,500,000 |
|
Warsaw, NY Central School District, 4.63% BANs, 9/21/2001 |
|
|
3,505,189 |
|
|
5,000,000 |
|
Waverly, NY Central School District, 4.88% RANs, 6/29/2001 |
|
|
5,008,614 |
|
|
3,800,000 |
|
Wayland-Cohocton, NY Central School District, 4.75% BANs, 8/21/2001 |
|
|
3,808,667 |
|
|
3,420,000 |
|
Wayne County, NY IDA, (Series 1999) Weekly VRDNs (Paul T. Freund Corporation Facility)/(Chase Manhattan Bank N.A., NY LOC) |
|
|
3,420,000 |
|
|
6,700,000 |
|
Wyoming County, NY IDA, (Series 1999A) Weekly VRDNs (TPI Arcade, Inc.)/(Manufacturer's & Traders Trust Co., Buffalo, NY LOC) |
|
|
6,700,000 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
879,143,021 |
|
|
||||||
|
|
|
|
Puerto Rico--0.1% |
|
|
|
|
|
1,085,155 |
|
Commonwealth of Puerto Rico Municipal Revenues Collection Center, 1997A LeaseTOPS Trust Weekly VRDNs (ABN AMRO Bank N.V., Amsterdam LIQ)/(State Street Bank and Trust Co. LOC) |
|
|
1,085,155 |
|
|
||||||
|
|
|
|
TOTAL SHORT-TERM MUNICIPALS |
|
|
880,228,176 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
|
$ |
880,228,176 |
|
|
||||||
Securities that are subject to alternative minimum tax represents 25.9% of the portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
92.2% |
|
7.8% |
|
|
||
2 Denotes a restricted security which is subject to restrictions on resale under Federal Securities laws. These securities have been deemed liquid based upon criteria approved by the fund's Board of Directors. At October 31, 2000, these securities amounted to $37,260,000, which represents 4.19% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($888,640,842) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
AMT |
--Alternative Minimum Tax |
|
BANs |
--Bond Anticipation Notes |
|
CP |
--Commercial Paper |
|
FGIC |
--Financial Guaranty Insurance Company |
|
FHA |
--Federal Housing Administration |
|
FSA |
--Financial Security Assurance |
|
HFA |
--Housing Finance Authority |
|
IDA |
--Industrial Development Authority |
|
IDRB |
--Industrial Development Revenue Bond |
|
INS |
--Insured |
|
LIQ |
--Liquidity Agreement |
|
LOCs |
--Letter(s) of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
PRF |
--Prerefunded |
|
RANs |
--Revenue Anticipation Notes |
|
TANs |
--Tax Anticipation Notes |
|
TOBs |
--Tender Option Bonds |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
880,228,176 |
|
|
Cash |
|
|
|
|
|
29,597 |
|
|
Income receivable |
|
|
|
|
|
10,156,711 |
|
|
Receivable for shares sold |
|
|
|
|
|
85,944 |
|
|
|
|||||||
|
TOTAL ASSETS |
|
|
|
|
|
890,500,428 |
|
|
|
|||||||
|
Liabilities: |
|
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
417,028 |
|
|
|
|
|
Income distribution payable |
|
|
1,386,800 |
|
|
|
|
|
Accrued expenses |
|
|
55,758 |
|
|
|
|
|
|
|||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
1,859,586 |
|
|
|
|||||||
|
Net assets for 888,640,842 shares outstanding |
|
|
|
|
$ |
888,640,842 |
|
|
|
|||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
|
$791,245,230 ÷ 791,245,230 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
|
|||||||
|
Cash II Shares: |
|
|
|
|
|
|
|
|
$97,395,612 ÷ 97,395,612 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
|
|||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
34,607,271 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
3,359,419 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
632,475 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
46,142 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
48,473 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
5,086 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,272 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
21,370 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
123,708 |
|
|
|
|
|
Distribution services fee--Institutional Service Shares |
|
|
|
|
|
|
1,867,483 |
|
|
|
|
|
Distribution services fee--Cash II Shares |
|
|
|
|
|
|
232,154 |
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
1,867,483 |
|
|
|
|
|
Shareholder services fee--Cash II Shares |
|
|
|
|
|
|
232,154 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
35,141 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
40,694 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
40,083 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
3,429 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
8,566,566 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(503,961 |
) |
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Institutional Service Shares |
|
|
(1,867,483 |
) |
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Cash II Shares |
|
|
(232,154 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(1,195,189 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(3,798,787 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
4,767,779 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
29,839,492 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
29,839,492 |
|
|
$ |
18,367,385 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Service Shares |
|
|
(26,678,477 |
) |
|
|
(16,781,325 |
) |
|
Cash II Shares |
|
|
(3,161,015 |
) |
|
|
(1,586,060 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(29,839,492 |
) |
|
|
(18,367,385 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
3,565,518,613 |
|
|
|
2,350,986,100 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
15,850,926 |
|
|
|
8,127,626 |
|
|
Cost of shares redeemed |
|
|
(3,332,710,409 |
) |
|
|
(2,276,100,170 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
248,659,130 |
|
|
|
83,013,556 |
|
|
|
||||||||
|
Change in net assets |
|
|
248,659,130 |
|
|
|
83,013,556 |
|
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
639,981,712 |
|
|
|
556,968,156 |
|
|
|
||||||||
|
End of period |
|
$ |
888,640,842 |
|
|
$ |
639,981,712 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Effective February 1, 2000, New York Municipal Cash Trust (the "Fund") became a portfolio of the Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended the ("Act"), as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Service Shares and Cash II Shares. The investment objective of the Fund is to provide current income exempt from federal regular income tax and the personal income taxes imposed by New York State and New York municipalities consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value their portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of their income. Accordingly, no provision for federal tax is necessary.
At October 31, 2000, the Fund for federal tax purposes, had a capital loss carryforward of $9,055, which will reduce taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and this will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire in 2007.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale, at the issuer's expense either upon demand by the Funds or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees (the "Trustees"). The Fund will not incur any registration costs upon such resales. The Fund's restricted securities are valued at the price provided by dealers in the secondary market or, if no market prices are available, at the fair value as determined by the Fund's pricing committee.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
Shares sold |
|
2,926,998,617 |
|
|
2,149,483,090 |
|
|
|
||||||
|
Shares issued to shareholders in payment of distributions declared |
|
13,348,098 |
|
|
6,777,794 |
|
|
|
||||||
|
Shares redeemed |
|
(2,726,370,054 |
) |
|
(2,092,003,780 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
213,976,661 |
|
|
64,257,104 |
|
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Cash II Shares: |
|
|
|
|
|
|
|
Shares sold |
|
638,519,996 |
|
|
201,503,010 |
|
|
|
||||||
|
Shares issued to shareholders in payment of distributions declared |
|
2,502,828 |
|
|
1,349,832 |
|
|
|
||||||
|
Shares redeemed |
|
(606,340,355 |
) |
|
(184,096,390 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM CASH II SHARE TRANSACTIONS |
|
34,682,469 |
|
|
18,756,452 |
|
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
248,659,130 |
|
|
83,013,556 |
|
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment Adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee and/or reimburse certain operating expenses of the Fund. The Adviser can modify or terminate this voluntary waiver and/or reimbursement at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Institutional Service Shares and Cash II Shares. The Plan provides that the Fund may incur distribution expenses up to 0.25% of the average daily net assets of the Institutional Service Shares and Cash II Shares, annually, to compensate FSC. The distributor may voluntarily choose to waive any portion of its fee. The distributor can modify or terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $1,491,500,000 and $1,190,170,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Funds invest a substantial portion of their assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 53.7% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 7.7% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the New York Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the New York Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000 is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as they become available. To obtain the SAI, the Semi-Annual Report and other information without charge, and make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
New York Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N310
G00208-02 (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and New Jersey state income tax imposed upon non-corporate tax payers consistent with stability of principal by investing in a portfolio of short-term, high-quality New Jersey tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 8
How to Redeem Shares 9
Account and Share Information 11
Who Manages the Fund? 12
Financial Information 12
Report of Ernst & Young LLP, Independent Auditors 25
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and New Jersey state income tax imposed upon non-corporate taxpayers 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.
The Fund invests in short-term, high-quality New Jersey tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and New Jersey state income tax imposed upon non-corporate taxpayers. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Shares total returns on a calendar year-end basis.
The Fund's Institutional Shares are sold without a sales charge (load). The total returns displayed above are based upon net asset value.
The Fund Institutional Shares total return from January 1, 2000 to September 30, 2000 was 2.67%.
Within the period shown in the chart, the Fund's Institutional Shares highest quarterly return was 1.10% (quarter ended March 31, 1991). Its lowest quarterly return was 0.47% (quarter ended March 31, 1994).
The following table represents the Fund's Institutional Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.84% |
|
5 Years |
|
3.14% |
|
Start of Performance1 |
|
3.04% |
1 The Fund's Institutional Shares start of performance date was December 12, 1990.
The Fund's Institutional Shares 7-Day Net Yield as of December 31, 1999 was 3.79%. You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund's Institutional Shares.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.40% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee3 |
|
0.25% |
|
Other Expenses |
|
0.20% |
|
Total Annual Fund Operating Expenses |
|
0.85% |
|
1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waivers of Fund Expenses |
|
0.30% |
|
Total Actual Annual Fund Operating Expenses (after waiver) |
|
0.55% |
|
2 The adviser has voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.30% for the fiscal year ended October 31, 2000. |
||
|
3 The shareholder services fee for the Institutional Services Shares has been voluntarily reduced. This voluntary reduction can be terminated at any time. The shareholder services fee paid by the Fund (after the voluntary reduction) was 0.05% for the fiscal year ended October 31, 2000. |
||
This 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. Expenses assuming no redemption are also shown. 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 shown in the table and remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
$ |
87 |
|
|
||
|
3 Years |
$ |
271 |
|
|
||
|
5 Years |
$ |
471 |
|
|
||
|
10 Years |
$ |
1,049 |
|
|
||
The Fund invests its assets in a portfolio of high-quality New Jersey tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and New Jersey state income tax imposed upon non-corporate taxpayers. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal income tax and New Jersey income tax imposed upon non-corporate taxpayers. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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 prices 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.
A substantial part of the Fund's portfolio may be comprised of securities issued by New Jersey issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from New Jersey, the Fund may be subject to additional risks compared to funds that invest in multiple states. New Jersey's economy is relatively diversified across the service sectors. New Jersey's economy has seen a long-term trend of declining employment in manufacturing industries offset by increasing employment in the diversified services sector. Any downturn in these and other industries may adversely affect the economy of the state.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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.
When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. 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.
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, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-New Jersey taxpayers because it invests in New Jersey municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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.
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
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.
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.
You will receive periodic statements reporting all account activity, including dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the New Jersey taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 25.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.56 |
% |
|
2.77 |
% |
|
3.12 |
% |
|
3.18 |
% |
|
3.17 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.55 |
% |
|
0.55 |
% |
|
0.55 |
% |
|
0.55 |
% |
|
0.55 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.49 |
% |
|
2.75 |
% |
|
3.07 |
% |
|
3.13 |
% |
|
3.13 |
% |
|
|
|||||||||||||||
|
Expense waiver/reimbursement3 |
|
0.30 |
% |
|
0.28 |
% |
|
0.28 |
% |
|
0.31 |
% |
|
0.37 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$99,502 |
|
$112,138 |
|
$106,032 |
|
$112,407 |
|
$115,722 |
|
||||
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--99.1%1 |
|
|
|
|
|
|
|
New Jersey--99.1% |
|
|
|
|
$ |
1,819,500 |
|
Beachwood, NJ, 5.13% BANs, 9/7/2001 |
|
$ |
1,828,735 |
|
|
1,110,000 |
|
Camden County, NJ Improvement Authority, (Series 1995) Weekly VRDNs (Jewish Federation of Southern Jersey, Inc.)/(National Westminster Bank, PLC LOC) |
|
|
1,110,000 |
|
|
4,900,000 |
|
Camden County, NJ Improvement Authority, (Series 1996) Weekly VRDNs (Parkview Redevelopment Housing Project)/(General Electric Capital Corp. LOC) |
|
|
4,900,000 |
|
|
1,896,000 |
|
Clipper Tax-Exempt Certificates Trust (New Jersey AMT), (Series 1999-8) Weekly VRDNs (New Jersey Housing & Mortgage Financing Authority)/(MBIA INS)/(State Street Bank and Trust Co. LIQ) |
|
|
1,896,000 |
|
|
6,965,000 |
|
Clipper Tax-Exempt Certificates Trust (New Jersey Non-AMT), (Series 1998-6) Weekly VRDNs (New Jersey Housing & Mortgage Financing Authority)/(MBIA INS)/(State Street Bank and Trust Co. LIQ) |
|
|
6,965,000 |
|
|
1,562,215 |
|
Franklin Borough, NJ, 4.70% BANs, 3/30/2001 |
|
|
1,564,357 |
|
|
2,000,000 |
|
Haddonfield, NJ, 5.38% BANs, 5/31/2001 |
|
|
2,004,684 |
|
|
1,000,000 |
|
Irvington Township, NJ, 4.88% BANs, 3/23/2001 |
|
|
1,001,957 |
|
|
3,205,000 |
|
Lakewood Township, NJ, 4.88% BANs, 7/27/2001 |
|
|
3,213,425 |
|
|
3,487,750 |
|
Little Egg Harbor Township, NJ, 4.63% BANs, 3/9/2001 |
|
|
3,490,730 |
|
|
2,929,700 |
|
Lower Township, NJ, 4.75% BANs, 4/6/2001 |
|
|
2,933,894 |
|
|
2,160,000 |
|
Matawan Borough, NJ, 4.63% BANs, 3/6/2001 |
|
|
2,161,738 |
|
|
1,500,000 |
|
Middlesex County, NJ PCFA, Weekly VRDNs (FMC Gold Co.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
1,500,000 |
|
|
2,400,000 |
|
New Jersey EDA, Weekly VRDNs (Center-For-Aging - Applewood Estates)/(Fleet National Bank, Springfield, MA LOC) |
|
|
2,400,000 |
|
|
2,450,000 |
|
New Jersey EDA, Weekly VRDNs (Maroukian Realty, LLC)/(Commerce Bank, N.A., Cherry Hill, NJ LOC) |
|
|
2,450,000 |
|
|
5,153,000 |
|
New Jersey EDA, Weekly VRDNs (Meridan Health Care)/(Allfirst LOC) |
|
|
5,153,000 |
|
|
2,400,000 |
|
New Jersey EDA, Weekly VRDNs (U.S. Golf Association)/(PNC Bank, N.A. LOC) |
|
|
2,400,000 |
|
|
750,000 |
|
New Jersey EDA, Weekly VRDNs (YM-YWHA of Bergen County, NJ)/(Bank of New York LOC) |
|
|
750,000 |
|
|
1,200,000 |
|
New Jersey EDA, (Series 1994A), 4.88% TOBs (A.F.L. Quality, Inc.)/(Fleet Bank N.A. LOC) Optional Tender 7/1/2001 |
|
|
1,200,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
New Jersey--continued |
|
|
|
|
$ |
275,000 |
|
New Jersey EDA, (Series 1994B), 4.88% TOBs (Two Univac, LLC)/(Fleet Bank N.A. LOC) Optional Tender 7/1/2001 |
|
$ |
275,000 |
|
|
4,100,000 |
|
New Jersey EDA, (Series 1985) Weekly VRDNs (Seton Co.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
4,100,000 |
|
|
280,000 |
|
New Jersey EDA, (Series 1987G) Weekly VRDNs (W.Y. Urban Renewal)/(National Westminster Bank, PLC LOC) |
|
|
280,000 |
|
|
3,000,000 |
|
New Jersey EDA, (Series 1990) Weekly VRDNs (Genlyte Camden County)/(Bank of America, N.A. LOC) |
|
|
3,000,000 |
|
|
860,000 |
|
New Jersey EDA, (Series 1992D-1) Weekly VRDNs (Danlin Corp.)/(Banque Nationale de Paris LOC) |
|
|
860,000 |
|
|
2,355,000 |
|
New Jersey EDA, (Series 1992L) Weekly VRDNs (Kent Place School)/ (Banque Nationale de Paris LOC) |
|
|
2,355,000 |
|
|
1,275,000 |
|
New Jersey EDA, (Series 1995) Weekly VRDNs (International Vitamin Corporation Project)/(National Westminster Bank, PLC LOC) |
|
|
1,275,000 |
|
|
2,325,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Lauffer Building Associates, Ltd.)/(Credit Suisse First Boston LOC) |
|
|
2,325,000 |
|
|
1,775,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Oakland Building Associates, Ltd.)/(Credit Suisse First Boston LOC) |
|
|
1,775,000 |
|
|
1,800,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Oakland Industrial Associates, Ltd.)/(Credit Suisse First Boston LOC) |
|
|
1,800,000 |
|
|
2,500,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Okner Parkway Associates Ltd. Partnership)/(Credit Suisse First Boston LOC) |
|
|
2,500,000 |
|
|
3,500,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Phoenix Realty Partners)/(First Union National Bank, Charlotte, NC LOC) |
|
|
3,500,000 |
|
|
1,400,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (UJA Federation of Bergan County and North Hudson, Inc.)/(Bank of New York, New York LOC) |
|
|
1,400,000 |
|
|
2,300,000 |
|
New Jersey EDA, (Series 1997) Weekly VRDNs (Wood Hollow Associates, LLC)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,300,000 |
|
|
2,685,000 |
|
New Jersey EDA, (Series 1998) Weekly VRDNs (Deutscher Realty Co. LLC)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
2,685,000 |
|
|
3,800,000 |
|
New Jersey EDA, (Series 1998A) Weekly VRDNs (Bayshore Health Care Center)/(KBC Bank N.V. LOC) |
|
|
3,800,000 |
|
|
430,000 |
|
New Jersey EDA, (Series 1998) Weekly VRDNs (Jewish Home at Rockleigh)/(Allied Irish Banks PLC LOC) |
|
|
430,000 |
|
|
700,000 |
|
New Jersey EDA, (Series 1998) Weekly VRDNs (Jewish Home at Rockleigh)/(PNC Bank, N.A. LOC) |
|
|
700,000 |
|
|
3,750,000 |
|
New Jersey EDA, (Series 1999) Weekly VRDNs (Richmond Industries, Inc. and Richmond Realty, LLC)/(Commerce Bank, N.A., Cherry Hill, NJ LOC) |
|
|
3,750,000 |
|
|
1,665,000 |
|
New Jersey EDA, (Series 1999) Weekly VRDNs (VOADV Property, Inc.)/(Commerce Bank, N.A., Cherry Hill, NJ LOC) |
|
|
1,665,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
New Jersey--continued |
|
|
|
|
$ |
3,500,000 |
|
New Jersey EDA, (Series 1999) Weekly VRDNs (White Wave, Inc.)/(KeyBank, N.A. LOC) |
|
$ |
3,500,000 |
|
|
5,780,000 |
|
New Jersey EDA, (Series 2000), 4.50% TOBs (Dallas Airmotive, Inc.)/(Bayerische Landesbank Girozentrale LOC), Optional Tender 12/1/2000 |
|
|
5,780,000 |
|
|
960,000 |
|
New Jersey EDA, (Series A) Weekly VRDNs (325 Midland Avenue, LLC & Wearbest Sil-Tex, Ltd.)/(Bank of New York, New York LOC) |
|
|
960,000 |
|
|
80,000 |
|
New Jersey EDA, (Series B) Weekly VRDNs (325 Midland Avenue, LLC & Wearbest Sil-Tex, Ltd.)/(Bank of New York, New York LOC) |
|
|
80,000 |
|
|
300,000 |
|
New Jersey EDA, (Series W) Weekly VRDNs (Datatec Industries, Inc.)/ (Banque Nationale de Paris LOC) |
|
|
300,000 |
|
|
2,815,000 |
|
New Jersey EDA, Economic Development Bonds, Weekly VRDNs (Atlantic States Cast Iron Pipe Co.)/(Amsouth Bank N.A., Birmingham LOC) |
|
|
2,815,000 |
|
|
4,800,000 |
|
New Jersey EDA, Port Facility Revenue Bonds, (Series 1983) Weekly VRDNs (Trailer Marine Transport Corp.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
4,800,000 |
|
|
6,160,000 |
|
New Jersey Housing & Mortgage Financing Authority, CDC Municipal Products Class A Certificates (Series 1996B) Weekly VRDNs (MBIA INS)/(CDC Municipal Projects, Inc. LIQ) |
|
|
6,160,000 |
|
|
2,500,000 |
|
New Jersey Housing & Mortgage Financing Authority, MERLOTS, (Series 2000 A2) Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
2,500,000 |
|
|
3,530,000 |
|
New Jersey State Transportation Trust Fund Authority, Floater Certificates, (Series 1998-54) Weekly VRDNs (FSA INS)/(Morgan Stanley, Dean Witter Municipal Funding Inc. LIQ) |
|
|
3,530,000 |
|
|
4,000,000 |
|
New Jersey State, (Series Fiscal 2001A), 4.25% CP, Mandatory Tender 12/7/2000 |
|
|
4,000,000 |
|
|
1,555,000 |
|
Newton, NJ, 5.00% BANs, 8/24/2001 |
|
|
1,561,028 |
|
|
4,750,000 |
|
Ocean City, NJ, 5.00% BANs, 12/15/2000 |
|
|
4,752,223 |
|
|
1,000,000 |
|
Passaic Valley, NJ Water Commission, 1999 Water Supply System Subordinated Project Notes, 4.50% BANs (PNC Bank, N.A. LOC) 11/14/2000 |
|
|
1,000,232 |
|
|
2,186,000 |
|
Patterson, NJ, 5.25% BANs, 6/15/2001 |
|
|
2,193,431 |
|
|
1,034,159 |
|
Phillipsburg, NJ, 5.38% BANs, 6/13/2001 |
|
|
1,038,222 |
|
|
10,000,000 |
|
Port Authority of New York and New Jersey, (Series 1991-4) Weekly VRDNs |
|
|
10,000,000 |
|
|
1,000,000 |
|
Sea Isle City, NJ, 4.88% BANs, 9/28/2001 |
|
|
1,003,669 |
|
|
2,000,000 |
|
Sea Isle City, NJ, 5.00% BANs, 6/21/2001 |
|
|
2,003,636 |
|
|
1,590,000 |
|
Trenton, NJ, 4.60% BANs, 10/19/2001 |
|
|
1,592,929 |
|
|
3,999,921 |
|
Warren County, NJ, 4.50% BANs, 2/15/2001 |
|
|
4,001,366 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
New Jersey--continued |
|
|
|
|
$ |
5,665,000 |
|
Washington Borough, NJ, 4.25% BANs, 12/8/2000 |
|
$ |
5,666,376 |
|
|
5,317,107 |
|
Washington Township, NJ, 5.00% BANs, (Warren County), 3/1/2001 |
|
|
5,325,457 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)2 |
|
$ |
164,262,089 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 29.7% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by NRSROs or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 and F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
86.7% |
|
13.3% |
2 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($165,811,270) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMT |
--Alternative Minimum Tax |
|
BANs |
--Bond Anticipation Notes |
|
CP |
--Commercial Paper |
|
EDA |
--Economic Development Authority |
|
FSA |
--Financial Security Assurance |
|
INS |
--Insured |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
PCFA |
--Pollution Control Finance Authority |
|
TOBs |
--Tender Option Bonds |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
164,262,089 |
|
Cash |
|
|
|
|
|
228,087 |
|
Income receivable |
|
|
|
|
|
1,629,866 |
|
Receivable for shares sold |
|
|
|
|
|
215,591 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
166,335,633 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
78,457 |
|
|
|
|
Income distribution payable |
|
|
417,839 |
|
|
|
|
Accrued expenses |
|
|
28,067 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
524,363 |
|
|
||||||
|
Net assets for 165,811,270 shares outstanding |
|
|
|
|
$ |
165,811,270 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
$99,501,502 ÷ 99,501,502 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Institutional Service Shares: |
|
|
|
|
|
|
|
$66,309,768 ÷ 66,309,768 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
7,434,477 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
732,578 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
155,000 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
9,542 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
55,293 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
2,028 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
9,856 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
16,627 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
57,557 |
|
|
|
|
|
Distribution services fee--Institutional Service Shares |
|
|
|
|
|
|
70,946 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
280,495 |
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
177,366 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
29,059 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
21,071 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
10,610 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
2,171 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
1,630,199 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(177,612 |
) |
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Institutional Service Shares |
|
|
(70,946 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(224,396 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(70,946 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(543,900 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
1,086,299 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
6,348,178 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
6,348,178 |
|
|
$ |
5,185,517 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(3,914,007 |
) |
|
|
(3,366,649 |
) |
|
Institutional Service Shares |
|
|
(2,434,171 |
) |
|
|
(1,818,868 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(6,348,178 |
) |
|
|
(5,185,517 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
576,169,418 |
|
|
|
563,331,396 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
1,456,724 |
|
|
|
1,077,052 |
|
|
Cost of shares redeemed |
|
|
(582,316,362 |
) |
|
|
(565,179,843 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(4,690,220 |
) |
|
|
(771,395 |
) |
|
|
||||||||
|
Change in net assets |
|
|
(4,690,220 |
) |
|
|
(771,395 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
170,501,490 |
|
|
|
171,272,885 |
|
|
|
||||||||
|
End of period |
|
$ |
165,811,270 |
|
|
$ |
170,501,490 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
New Jersey Municipal Cash Trust (the "Fund") a portfolio of the Money Market Obligations Trust (the "Trust"). The Trust is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Shares and Institutional Service Shares. The investment objective of the Fund is to provide current income which is exempt from federal regular income tax and New Jersey state income tax imposed upon non-corporate taxpayers consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
330,149,109 |
|
|
401,625,092 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
28,713 |
|
|
26,129 |
|
|
Shares redeemed |
|
(342,814,680 |
) |
|
(395,545,299 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
(12,636,858 |
) |
|
6,105,922 |
|
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
Shares sold |
|
246,020,309 |
|
|
161,706,304 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
1,428,011 |
|
|
1,050,923 |
|
|
Shares redeemed |
|
(239,501,682 |
) |
|
(169,634,544 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
7,946,638 |
|
|
(6,877,317 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(4,690,220 |
) |
|
(771,395 |
) |
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Funds with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Institutional Service Shares. The Plan provides that the Fund may incur distribution expenses up to 0.10% of the average daily net assets of the Institutional Service Shares, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $258,465,000 and $261,380,000 respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 62.7% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 10.7% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the New Jersey Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the New Jersey Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000 is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as they become available. To obtain the SAI, the Semi-Annual Report and other information without charge, and make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
New Jersey Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N476
0100802A-IS (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and the personal income tax imposed by the State of Ohio and Ohio municipalities consistent with stability of principal by investing in a portfolio of short-term, high-quality Ohio tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 8
How to Purchase Shares 8
How to Redeem Shares 10
Account and Share Information 13
Who Manages the Fund? 14
Financial Information 14
Report of Ernst & Young LLP, Independent Auditors 29
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and the personal income taxes imposed by the State of Ohio and Ohio municipalities 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.
The Fund invests in short-term, high-quality Ohio tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and the personal income taxes imposed by the State of Ohio and Ohio municipalities. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Cash II Shares total returns on a calendar year-end basis.
The Fund's Cash II Shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's Cash II Shares total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.45%.
Within the period shown in the chart, the Fund's Cash II Shares highest quarterly return was 0.87% (quarter ended June 30, 1995). Its lowest quarterly return was 0.44% (quarter ended March 31, 1994).
The following table represents the Fund's Cash II Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.66% |
|
5 Years |
|
2.95% |
|
Start of Performance1 |
|
2.82% |
1 The Fund's Cash II Shares start of performance date was April 22, 1991.
The Fund's Cash II Shares 7-Day Net Yield as of December 31, 1999 was 3.69%.
You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund's Cash II Shares.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) . |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.40% |
|
Distribution (12b-1) Fee3 |
|
0.30% |
|
Shareholder Services Fee. |
|
0.25% |
|
Other Expenses |
|
0.17% |
|
Total Annual Fund Operating Expenses |
|
1.12% |
|
1 Although not contractually obligated to do so, the adviser and distributor waived certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ending October 31, 2000. |
||
|
Total Waiver of Fund Expenses |
|
0.17% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.95% |
|
2 The adviser has voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.28% for the fiscal year ending October 31, 2000. |
||
|
3 The distribution (12b-1) fee provider has voluntarily waived a portion of the distribution (12b-1) fee. This voluntary waiver can be terminated at any time. The distribution (12b-1) fee paid by the Fund (after the voluntary waiver) was 0.25% for the fiscal year ending October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Cash II Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Cash II Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's Cash II Shares operating expenses are before waivers as shown above and remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
$ |
114 |
|
|
||
|
3 Years |
$ |
356 |
|
|
||
|
5 Years |
$ |
617 |
|
|
||
|
10 Years |
$ |
1,363 |
|
|
||
The Fund invests in a portfolio of high-quality Ohio tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Ohio state income taxes. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal and Ohio income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. Fixed income securities pay interest, dividends or distributions at a specified rate. The rate may be a fixed percentage of the principal or adjusted periodically. In addition, the issuer must repay the principal amount of the security, normally within a specified time.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Ohio issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Ohio, the Fund may be subject to additional risks compared to funds that invest in multiple states. Ohio's economy is relatively diversified across the manufacturing, agriculture and services sectors. However, the manufacturing sector, in particular automobile manufacturing related industries, is still a major employer within Ohio and exposes the state to the economic dislocations which occur within cyclical industries.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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.
When the Fund receives your transaction in proper form (as described in this prospectus), it is processed at the next determined NAV. 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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
The Fund offers three share classes: Institutional Shares, Institutional Service Shares and Cash II Shares, each representing interests in a single portfolio of securities. This prospectus relates only to Cash II Shares. Each share class has different expenses which affect their performance. Contact your investment professional or call 1-800-341-7400 for more information concerning the other classes.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Ohio taxpayers because it invests in Ohio municipal securities.
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).
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 II Shares. Because these Shares pay marketing fees on an ongoing basis, your investment cost may be higher over time than other shares with different sales charges and marketing fees.
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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.
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Ohio taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 29.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0,03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.28 |
% |
|
2.59 |
% |
|
2.91 |
% |
|
2.98 |
% |
|
2.96 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.95 |
% |
|
0.87 |
% |
|
0.87 |
% |
|
0.87 |
% |
|
0.87 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.21 |
% |
|
2.54 |
% |
|
2.86 |
% |
|
2.94 |
% |
|
2.92 |
% |
|
|
|||||||||||||||
|
Expense waiver/reimbursement3 |
|
0.17 |
% |
|
0.28 |
% |
|
0.28 |
% |
|
0.28 |
% |
|
0.31 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$65,024 |
|
|
$117,596 |
|
|
$342,946 |
|
|
$245,329 |
|
|
$206,149 |
|
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--98.9%1 |
|
|
|
|
|
|
|
Ohio--98.9% |
|
|
|
|
$ |
4,250,000 |
|
Avon Lake, OH, 4.75% BANs, 3/29/2001 |
|
$ |
4,256,601 |
|
|
5,875,000 |
|
Belmont County, OH Weekly VRDNs (Lesco, Inc.)/(PNC Bank, N.A. LOC) |
|
|
5,875,000 |
|
|
2,075,000 |
|
Belmont County, OH, 4.21% BANs, 11/21/2000 |
|
|
2,075,283 |
|
|
4,000,000 |
|
Brookville, OH, (Series 1988) Weekly VRDNs (Green Tokai)/(Bank of Tokyo-Mitsubishi Ltd. LOC) |
|
|
4,000,000 |
|
|
2,900,000 |
|
Butler County, OH, 4.80% BANs, 7/11/2001 |
|
|
2,907,669 |
|
|
6,585,000 |
|
Canfield, OH Local School District, 4.75% BANs, 9/27/2001 |
|
|
6,604,940 |
|
|
3,000,000 |
|
Chillicothe, OH, 5.25% BANs, 6/1/2001 |
|
|
3,006,556 |
|
|
5,785,000 |
|
Clermont County, OH, Variable Rate IDRBs, (Series 1997) Weekly VRDNs (Buriot International, Inc.)/(PNC Bank, N.A. LOC) |
|
|
5,785,000 |
|
|
1,250,000 |
|
Cleveland, OH Airport System, (Series A) 4.35% Bonds (FSA INS), 1/1/2001 |
|
|
1,250,000 |
|
|
14,049,000 |
|
Clipper Tax-Exempt Certificates Trust (Ohio AMT), Series 1999-4 Weekly VRDNs (Ohio HFA)/(GNMA COL)/(State Street Bank and Trust Co. LIQ) |
|
|
14,049,000 |
|
|
685,000 |
|
Clyde, OH, 5.13% BANs, 6/21/2001 |
|
|
685,930 |
|
|
1,475,000 |
|
Columbiana County, OH, IDRBs Weekly VRDNs (C & S Land Company Project)/(Bank One, N.A. (Ohio) LOC) |
|
|
1,475,000 |
|
|
11,000,000 |
|
Cuyahoga County, OH Hospital Authority, (Series C) Weekly VRDNs (Cleveland Clinic) |
|
|
11,000,000 |
|
|
300,000 |
|
Cuyahoga County, OH IDA Weekly VRDNs (Animal Protection League (Cuyahoga County))/(KeyBank, N.A. LOC) |
|
|
300,000 |
|
|
5,100,000 |
|
Cuyahoga County, OH IDA Weekly VRDNs (Cleveland Gear Co.)/ (KeyBank, N.A. LOC) |
|
|
5,100,000 |
|
|
1,050,000 |
|
Cuyahoga County, OH IDA Weekly VRDNs (East Park Community, Inc.)/(KeyBank, N.A. LOC) |
|
|
1,050,000 |
|
|
1,820,000 |
|
Cuyahoga County, OH IDA Weekly VRDNs (Sure-Foot Industries, Inc.)/ (FirstMerit Bank, N.A. LOC) |
|
|
1,820,000 |
|
|
2,500,000 |
|
Cuyahoga County, OH IDA, (Series 1999) Weekly VRDNs (Kowalski Heat Treating Co.)/(FirstMerit Bank, N.A. LOC) |
|
|
2,500,000 |
|
|
4,900,000 |
|
Cuyahoga County, OH, (Series 1999) Weekly VRDNs (National Terminal Apartments)/(Fleet National Bank, Springfield, MA LOC) |
|
|
4,900,000 |
|
|
1,390,000 |
|
Delaware County, OH, IDRB, (Series 1995) Weekly VRDNs (Air Waves, Inc. Project)/(KeyBank, N.A. LOC) |
|
|
1,390,000 |
|
|
2,750,000 |
|
Euclid, OH, 4.75% BANs, 7/26/2001 |
|
|
2,754,794 |
|
|
2,550,000 |
|
Franklin County, OH IDA Weekly VRDNs (Unicorn Leasing Corp.)/(Fifth Third Bank, Cincinnati LOC) |
|
|
2,550,000 |
|
|
2,770,000 |
|
Franklin County, OH IDA, (Series 1995) Weekly VRDNs (Fabcon LLC Project)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,770,000 |
|
|
4,900,000 |
|
Franklin County, OH IDA, Adjustable Rate Demand IDRBs, (Series 1996A) Weekly VRDNs (Carams, Ltd.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
4,900,000 |
|
Prinicipal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Ohio--continued |
|
|
|
|
$ |
1,170,000 |
|
Franklin County, OH IDA, Adjustable Rate Demand IDRBs, (Series 1996B) Weekly VRDNs (Carams, Ltd.)/(Huntington National Bank, Columbus, OH LOC) |
|
$ |
1,170,000 |
|
|
3,000,000 |
|
Franklin County, OH, 4.65% TOBs (Blacklick Station Apartments)/(Fifth Third Bank, Cincinnati LOC), Mandatory Tender 10/1/2001 |
|
|
3,000,000 |
|
|
1,415,000 |
|
Franklin County, OH, Adjustable Rate Demand Economic Development Revenue Refunding Bonds, (Series 1996) Weekly VRDNs (CPM Investments)/(Huntington National Bank, Columbus, OH LOC) |
|
|
1,415,000 |
|
|
900,000 |
|
Geauga County, OH Park District, 4.30% BANs, 12/7/2000 |
|
|
900,212 |
|
|
7,375,000 |
|
Greene County, OH, (Series E), 4.55% BANs, 6/1/2001 |
|
|
7,385,775 |
|
|
3,288,000 |
|
Greene County, OH, (Series F), 4.55% BANs, 8/22/2001 |
|
|
3,293,346 |
|
|
2,300,000 |
|
Hamilton, OH, 4.61% BANs, 4/26/2001 |
|
|
2,302,758 |
|
|
1,200,000 |
|
Hilliard, OH, 4.90% BANs, 9/6/2001 |
|
|
1,204,859 |
|
|
2,200,000 |
|
Holmes County, OH IDA Weekly VRDNs (Poultry Processing)/(U.S. Bank, N.A., Boise LOC) |
|
|
2,200,000 |
|
|
2,000,000 |
|
Huber Heights, OH, IDR, (Series 1999) Weekly VRDNs (Paxar Corp.)/(SunTrust Bank LOC) |
|
|
2,000,000 |
|
|
955,000 |
|
Huber Heights, OH, IDRB, (Series 1994) Weekly VRDNs (Lasermike, Inc. Project)/(KeyBank, N.A. LOC) |
|
|
955,000 |
|
|
1,200,000 |
|
Kent, OH, Adjustable Rate IDRBs, (Series 1994) Weekly VRDNs (Raven's Metal Products, Inc. Project)/(FirstMerit Bank, N.A. LOC) |
|
|
1,200,000 |
|
|
3,000,000 |
|
Knox County, OH, 4.81% BANs, 7/19/2001 |
|
|
3,006,750 |
|
|
1,800,000 |
|
Knox County, OH, 5.16% BANs, 7/19/2001 |
|
|
1,807,518 |
|
|
2,815,000 |
|
Lake County, OH, Adjustable Rate IDRBs, (Series 1996) Weekly VRDNs (Apsco Properties, Ltd.)/(Bank One, N.A. (Ohio) LOC) |
|
|
2,815,000 |
|
|
2,050,000 |
|
Lorain County, OH Weekly VRDNs (Ohio Metallurgical Service, Inc.)/(FirstMerit Bank, N.A. LOC) |
|
|
2,050,000 |
|
|
3,485,000 |
|
Lorain Port Authority, OH, (Series 1994) Weekly VRDNs (Spitzer Great Lakes Ltd., Inc.)/(Bank One, N.A. (Ohio) LOC) |
|
|
3,485,000 |
|
|
950,000 |
|
Lorain Port Authority, OH, Adjustable Rate Demand Port Development Refunding Revenue Bonds, (Series 1996) Weekly VRDNs (Spitzer Project)/(Bank One, N.A. (Ohio) LOC) |
|
|
950,000 |
|
|
8,305,000 |
|
Lorain Port Authority, OH, IDRB, (Series 1996) Weekly VRDNs (Brush Wellman, Inc.)/(National City Bank, Ohio LOC) |
|
|
8,305,000 |
|
|
165,000 |
|
Lucas County, OH, Hospital Improvement Revenue Weekly VRDNs (Sunshine Children's Home)/(National City Bank, Ohio LOC) |
|
|
165,000 |
|
|
4,000,000 |
|
Lucas County, OH, 4.56% BANs, 4/12/2001 |
|
|
4,003,560 |
|
|
1,235,000 |
|
Lucas County, OH, Hospital Facility Improvement Revenue Bonds, (Series 93) Weekly VRDNs (Lott Industries, Inc.)/(National City Bank, Ohio LOC) |
|
|
1,235,000 |
|
|
3,500,000 |
|
Mahoning County, OH IDA, (Series 1999) Weekly VRDNs (Modern Builders Supply, Inc.)/(PNC Bank, N.A. LOC) |
|
|
3,500,000 |
|
|
5,025,000 |
|
Mahoning County, OH Multifamily HFA Weekly VRDNs (International Towers, Inc.)/(PNC Bank, N.A. LOC) |
|
|
5,025,000 |
|
|
2,500,000 |
|
Mansfield, OH, 4.82% BANs, 5/3/2001 |
|
|
2,503,833 |
|
Prinicipal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Ohio--continued |
|
|
|
|
$ |
40,000 |
|
Marion County, OH Health Care Facilities Weekly VRDNs (Marion Area Counseling Center, Inc.)/(Huntington National Bank, Columbus, OH LOC) |
|
$ |
40,000 |
|
|
4,660,000 |
|
Medina County, OH Weekly VRDNs (Three D Metals, Inc.)/(Firstar Bank, N.A., Cincinnati LOC) |
|
|
4,660,000 |
|
|
6,250,000 |
|
Medina County, OH, (Series 1998) Weekly VRDNs (Mack Industries)/(Huntington National Bank, Columbus, OH LOC) |
|
|
6,250,000 |
|
|
2,480,000 |
|
Medina County, OH, (Series 1998) Weekly VRDNs (Michael Day Enterprises)/(KeyBank, N.A. LOC) |
|
|
2,480,000 |
|
|
5,400,000 |
|
Medina County, OH, Solid Waste Disposal Revenue Bonds, (Series 1995) Weekly VRDNs (Valley City Steel Company Project)/(KeyBank, N.A. LOC) |
|
|
5,400,000 |
|
|
3,355,000 |
|
Miami County, OH, 4.86% BANs, 7/11/2001 |
|
|
3,360,520 |
|
|
4,450,000 |
|
Montgomery County, OH, (Series 1998B) 4.20% CP (Miami (OH) Valley Hospital)/(Morgan Guaranty Trust Co., New York LIQ), Mandatory Tender 11/13/2000 |
|
|
4,450,000 |
|
|
1,400,000 |
|
Montgomery County, OH, Revenue Bonds, (Series A) 6.20% Bonds (Sisters of Charity Health Care System)/(MBIA INS), 5/15/2001 |
|
|
1,412,374 |
|
|
515,000 |
|
North Olmsted, OH IDA, 5.00% TOBs (Therm-All)/(National City Bank, Ohio LOC), Optional Tender 2/1/2001 |
|
|
515,000 |
|
|
935,000 |
|
Ohio HFA Weekly VRDNs (Westchester Village)/(KeyBank, N.A. LOC) |
|
|
935,000 |
|
|
6,405,000 |
|
Ohio HFA, 4.40% TOBs (Lincoln Park Associates)/(Bank One, N.A. (Ohio) LOC), Optional Tender 11/1/2000 |
|
|
6,405,000 |
|
|
5,000,000 |
|
Ohio State Air Quality Development Authority, Air Quality Development Revenue Bonds, (1995 Series B) Weekly VRDNs (JMG Funding LP)/(Societe Generale, Paris LOC) |
|
|
5,000,000 |
|
|
3,635,000 |
|
Ohio State, Environmental Improvement Revenue Bonds, (Series 1996) Weekly VRDNs (Newark Group Industries, Inc.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
3,635,000 |
|
|
1,000,000 |
|
Ohio State, IDRB, (Series 1994) Weekly VRDNs (Anomatic Corp.)/(National City Bank, Ohio LOC) |
|
|
1,000,000 |
|
|
600,000 |
|
Orrville, OH IDA Weekly VRDNs (O.S. Associates/Contours, Inc.)/(National City Bank, Ohio LOC) |
|
|
600,000 |
|
|
2,250,000 |
|
Perrysburg, OH, 4.45% BANs, 11/16/2000 |
|
|
2,250,399 |
|
|
4,800,000 |
|
Pickaway County, OH IDA Weekly VRDNs (Crane Plastics)/(Bank One, N.A. (Ohio) LOC) |
|
|
4,800,000 |
|
|
645,000 |
|
Portage County, OH IDA Weekly VRDNs (Lovejoy Industries)/(Firstar Bank, N.A., Cincinnati LOC) |
|
|
645,000 |
|
|
3,690,000 |
|
Portage County, OH IDA, Adjustable Rate IDRBs, (Series 1996) Weekly VRDNs (Barnette Project)/(National City Bank, Ohio LOC) |
|
|
3,690,000 |
|
|
240,000 |
|
Solon, OH, IDR Weekly VRDNs (Graphic Laminating)/(KeyBank, N.A. LOC) |
|
|
240,000 |
|
|
1,840,000 |
|
Springfield, OH, 4.70% BANs, 9/26/2001 |
|
|
1,843,964 |
|
|
400,000 |
|
Stark County, OH IDR Weekly VRDNs (Sancap Abrasives, Inc.)/ (KeyBank, N.A. LOC) |
|
|
400,000 |
|
|
5,430,000 |
|
Stark County, OH IDR Weekly VRDNs (Shearer's Foods, Inc.)/(Bank One, N.A. (Ohio) LOC) |
|
|
5,430,000 |
|
Prinicipal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Ohio--continued |
|
|
|
|
$ |
1,745,000 |
|
Stark County, OH IDR, (Series 1994) Weekly VRDNs (Wilkof Morris)/ (KeyBank, N.A. LOC) |
|
$ |
1,745,000 |
|
|
1,080,000 |
|
Stark County, OH IDR, IDRB, (Series 1996) Weekly VRDNs (Foundations Systems and Anchors, Inc. Project)/(Bank One, N.A. (Ohio) LOC) |
|
|
1,080,000 |
|
|
1,160,000 |
|
Strongsville, OH Weekly VRDNs (Monarch Engraving, Inc.)/(FirstMerit Bank, N.A. LOC) |
|
|
1,160,000 |
|
|
985,000 |
|
Strongsville, OH, (Series 1994) Weekly VRDNs (Nutro Machinery Corp.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
985,000 |
|
|
1,875,000 |
|
Strongsville, OH, 4.60% BANs, 10/17/2001 |
|
|
1,878,776 |
|
|
3,000,000 |
|
Summit County, OH IDR Weekly VRDNs (Gardner Pie Co., Inc.)/(FirstMerit Bank, N.A. LOC) |
|
|
3,000,000 |
|
|
4,340,000 |
|
Summit County, OH IDR, (Series 1994) Weekly VRDNs (Harry London Candies, Inc.)/(KeyBank, N.A. LOC) |
|
|
4,340,000 |
|
|
900,000 |
|
Summit County, OH IDR, (Series 1997) Weekly VRDNs (Baker McMillen Co.)/(National City Bank, Ohio LOC) |
|
|
900,000 |
|
|
2,730,000 |
|
Summit County, OH IDR, (Series 1997) Weekly VRDNs (Malco Products, Inc.)/(Bank One, Ohio, N.A. LOC) |
|
|
2,730,000 |
|
|
1,985,000 |
|
Summit County, OH IDR, (Series 1998( Weekly VRDNs (Waldonia Investment)/(KeyBank, N.A. LOC) |
|
|
1,985,000 |
|
|
5,925,000 |
|
Summit County, OH IDR, (Series 1999) Weekly VRDNs (Waltco Truck Equipment)/(Svenska Handelsbanken, Stockholm LOC) |
|
|
5,925,000 |
|
|
425,000 |
|
Summit County, OH IDR, 5.00% TOBs (Bechmer-Boyce Project)/ (KeyBank, N.A. LOC), Optional Tender 1/15/2001 |
|
|
425,000 |
|
|
610,000 |
|
Summit County, OH IDR, 4.85% TOBs (Universal Rack)/(National City Bank, Ohio LOC), Optional Tender 2/1/2001 |
|
|
610,000 |
|
|
1,125,000 |
|
Summit County, OH IDR, Adjustable Rate IDRBs, (Series 1996) Weekly VRDNs (Fomo Products, Inc.)/(FirstMerit Bank, N.A. LOC) |
|
|
1,125,000 |
|
|
538,000 |
|
Summit County, OH IDR, Bonds, (Series 1994) Weekly VRDNs (Austin Printing Co., Inc.)/(Bank One, N.A. (Ohio) LOC) |
|
|
538,000 |
|
|
1,795,000 |
|
Summit County, OH IDR, IDRB, (Series 1994B) Weekly VRDNs (Harry London Candies, Inc.)/(KeyBank, N.A. LOC) |
|
|
1,795,000 |
|
|
585,000 |
|
Summit County, OH IDR, IDRB, (Series 1995) Weekly VRDNs (Cardtech Project (OH))/(KeyBank, N.A. LOC) |
|
|
585,000 |
|
|
605,000 |
|
Summit County, OH IDR, Multi-Mode Variable Rate I Weekly VRDNs (Mastergraphics, Inc. Project)/(KeyBank, N.A. LOC) |
|
|
605,000 |
|
|
1,815,000 |
|
Summit County, OH IDR, Variable Rate IDRBs, (Series 1998A) Weekly VRDNs (Wintek Ltd.)/(FirstMerit Bank, N.A. LOC) |
|
|
1,815,000 |
|
|
4,000,000 |
|
Toledo-Lucas County, OH Port Authority, Airport Development Revenue Bonds, (Series 1996-1) Weekly VRDNs (Burlington Air Express, Inc.)/(ABN AMRO Bank N.V., Amsterdam LOC) |
|
|
4,000,000 |
|
|
1,000,000 |
|
Toledo-Lucas County, OH Port Authority, IDA Weekly VRDNs (Medusa Corp.)/(Bayerische Hypotheken-und Vereinsbank AG LOC) |
|
|
1,000,000 |
|
|
1,700,000 |
|
Trumbull County, OH IDA, (Series 1989) Weekly VRDNs (McSonald Steel Corp.)/(PNC Bank, N.A. LOC) |
|
|
1,700,000 |
|
Prinicipal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Ohio--continued |
|
|
|
|
$ |
1,200,000 |
|
Trumbull County, OH IDA, IDR Refunding Bonds, (Series 1994) Weekly VRDNs (Churchill Downs, Inc.)/(Bank One, N.A. (Ohio) LOC) |
|
$ |
1,200,000 |
|
|
1,315,000 |
|
Tuscarawas County, OH, Adjustable Rate IDRBs, (Series 1995) Weekly VRDNs (Primary Packaging, Inc.)/(FirstMerit Bank, N.A. LOC) |
|
|
1,315,000 |
|
|
2,190,000 |
|
Williams County, OH, Multi-Mode Variable Rate IDRBs (Series 1996) Weekly VRDNs (Allied Moulded Products, Inc.)/(KeyBank, N.A. LOC) |
|
|
2,190,000 |
|
|
930,000 |
|
Willoughby City, OH, IDR Refunding Bonds, (Series 1995A) Weekly VRDNs (Pine Ridge Shopping Center Company Project)/(Firstar Bank, N.A., Cincinnati LOC) |
|
|
930,000 |
|
|
975,000 |
|
Willoughby City, OH, IDR Revenue Bonds (Series 1995B) Weekly VRDNs (Pine Ridge Shopping Center Company Project)/(Firstar Bank, N.A. Cininnati LOC) |
|
|
975,000 |
|
|
600,000 |
|
Wood County, OH Weekly VRDNs (Principle Business Enterprises)/(National City Bank, Ohio LOC) |
|
|
600,000 |
|
|
1,835,000 |
|
Wood County, OH, EDRB Weekly VRDNs (Roe Inc. Project)/(Huntington National Bank, Columbus, OH LOC) |
|
|
1,835,000 |
|
|
875,000 |
|
Wood County, OH, Series 1998 Weekly VRDNs (IMCO Carbide Tool, Inc.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
875,000 |
|
|
960,000 |
|
Wood County, OH, Williams Industrial Service Inc., Project Weekly VRDNs (Williams Industrial Service, Inc.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
960,000 |
|
|
3,490,000 |
|
Youngstown, OH, (Series 1996A) Weekly VRDNs (Cantar/Polyair Corp./Performa Corp.)/(HSBC Bank USA LOC) |
|
|
3,490,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)2 |
|
$ |
278,623,417 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 68.4% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by NRSROs or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
99.8% |
|
0.2% |
2 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($281,706,427) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMT |
--Alternative Minimum Tax |
|
BANs |
--Bond Anticipation Notes |
|
COL |
--Collateralized |
|
CP |
--Commercial Paper |
|
EDRB |
--Economic Development Revenue Bonds |
|
FSA |
--Financial Security Assurance |
|
GNMA |
--Government National Mortgage Association |
|
HFA |
--Housing Finance Authority |
|
IDA |
--Industrial Development Authority |
|
IDR |
--Industrial Development Revenue |
|
IDRBs |
--Industrial Development Revenue Bond(s) |
|
INS |
--Insured |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
TOBs |
--Tender Option Bonds |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
278,623,417 |
|
Cash |
|
|
|
|
|
1,236,014 |
|
Income receivable |
|
|
|
|
|
2,188,314 |
|
Receivable for shares sold |
|
|
|
|
|
422,440 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
282,470,185 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Income distribution payable |
|
$ |
688,263 |
|
|
|
|
Accrued expenses |
|
|
75,495 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
763,758 |
|
|
||||||
|
Net assets for 281,706,427 shares outstanding |
|
|
|
|
$ |
281,706,427 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
$94,388,263 ÷ 94,388,263 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Institutional Service Shares: |
|
|
|
|
|
|
|
$122,293,795 ÷ 122,293,795 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Cash II Shares: |
|
|
|
|
|
|
|
$65,024,369 ÷ 65,024,369 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
11,745,884 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
1,126,048 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
212,008 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
16,617 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
24,991 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
2,770 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,677 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
34,244 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
89,372 |
|
|
|
|
|
Distribution services fee--Cash II Shares |
|
|
|
|
|
|
216,852 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
265,732 |
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
257,338 |
|
|
|
|
|
Shareholder services fee--Cash II Shares |
|
|
|
|
|
|
180,710 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
44,900 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
22,871 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
14,048 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
1,365 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
2,521,543 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(342,310 |
) |
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Cash II Shares |
|
|
(36,142 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(265,732 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(51,468 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(695,652 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
1,825,891 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
9,919,993 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
9,919,993 |
|
|
$ |
10,226,317 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(3,924,832 |
) |
|
|
(4,019,703 |
) |
|
Institutional Service Shares |
|
|
(3,674,842 |
) |
|
|
(2,810,726 |
) |
|
Cash II Shares |
|
|
(2,320,319 |
) |
|
|
(3,395,888 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(9,919,993 |
) |
|
|
(10,226,317 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
1,305,244,506 |
|
|
|
1,437,132,752 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
3,165,192 |
|
|
|
3,824,029 |
|
|
Cost of shares redeemed |
|
|
(1,342,468,426 |
) |
|
|
(1,694,429,001 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(34,058,728 |
) |
|
|
(253,472,220 |
) |
|
|
||||||||
|
Change in net assets |
|
|
(34,058,728 |
) |
|
|
(253,472,220 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
315,765,155 |
|
|
|
569,237,375 |
|
|
|
||||||||
|
End of period |
|
$ |
281,706,427 |
|
|
$ |
315,765,155 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Money Market Obligations Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of Ohio Municipal Cash Trust (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers three classes of shares: Institutional Shares, Institutional Service Shares and Cash II Shares. The investment objective of the Fund is to provide current income exempt from federal regular income tax and the personal income taxes imposed by the State of Ohio and Ohio municipalities consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees ("Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At October 31, 2000, capital paid-in aggregated $281,706,427.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
781,192,196 |
|
|
733,607,559 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
300,704 |
|
|
166,650 |
|
|
Shares redeemed |
|
(794,978,994 |
) |
|
(757,294,785 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
(13,486,094 |
) |
|
(23,520,576 |
) |
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
Shares sold |
|
286,893,901 |
|
|
253,460,934 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
606,528 |
|
|
667,036 |
|
|
Shares redeemed |
|
(255,501,208 |
) |
|
(258,729,340 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
31,999,221 |
|
|
(4,601,370 |
) |
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Cash II Shares: |
|
|
|
|
|
|
|
Shares sold |
|
237,158,409 |
|
|
450,064,259 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
2,257,960 |
|
|
2,990,343 |
|
|
Shares redeemed |
|
(291,988,224 |
) |
|
(678,404,876 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM CASH II SHARE TRANSACTIONS |
|
(52,571,855 |
) |
|
(225,350,274 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(34,058,728 |
) |
|
(253,472,220 |
) |
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment Adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federate Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Cash II Shares. The Plan provides that the Fund may incur distribution expenses up to 0.30% of the average daily net assets of Cash II Shares, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $528,272,532 and $583,171,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 68.6% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 11.5% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Ohio Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Ohio Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
Statement of Additional Information (SAI) dated December 31, 2000 is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as they become available. To obtain the SAI, the Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Ohio Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N419
1030105A-CII (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and the personal income tax imposed by the State of Ohio and Ohio municipalities consistent with stability of principal by investing in a portfolio of short-term, high-quality Ohio tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 8
How to Purchase Shares 8
How to Redeem Shares 10
Account and Share Information 12
Who Manages the Fund? 13
Financial Information 13
Report of Ernst & Young LLP, Independent Auditors 29
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and the personal income taxes imposed by the State of Ohio and Ohio municipalities 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.
The Fund invests in short-term, high-quality Ohio tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and the personal income taxes imposed by the State of Ohio and Ohio municipalities. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Shares total returns on a calendar year-end basis.
The Fund's Institutional Shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's Institutional Shares total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.84%.
Within the period shown in the Chart, the Fund's Institutional Shares highest quarterly return was 0.91% (quarter ended June 30, 1997). Its lowest quarterly return was 0.71% (quarter ended March 31, 1999).
The following table represents the Fund's Institutional Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
3.17% |
|
Start of Performance1 |
|
3.36% |
1 The Fund's Institutional Shares start of performance date was March 5, 1996.
The Fund's Institutional Shares 7-Day Net Yield as of December 31, 1999 was 4.19%.
You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund's Institutional Shares.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) . |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.40% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee3 |
|
0.25% |
|
Other Expenses |
|
0.17% |
|
Total Annual Fund Operating Expenses |
|
0.82% |
|
1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ending October 31, 2000. |
||
|
Total Waiver of Fund Expenses |
|
0.37% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.45% |
|
2 The adviser has voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.28% for the fiscal year ending October 31, 2000. |
||
|
3 The shareholder services provider has voluntarily waived a portion of the shareholder services fee. This voluntary waiver can be terminated at any time. The shareholder services fee paid by the Fund (after the voluntary waiver) was 0.00% for the fiscal year ending October 31, 2000. |
||
This 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 shown above and remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
$ |
84 |
|
|
||
|
3 Years |
$ |
262 |
|
|
||
|
5 Years |
$ |
455 |
|
|
||
|
10 Years |
$ |
1,014 |
|
|
||
The Fund invests in a portfolio of high-quality Ohio tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Ohio state income taxes. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal and Ohio income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. Fixed income securities pay interest, dividends or distributions at a specified rate. The rate may be a fixed percentage of the principal or adjusted periodically. In addition, the issuer must repay the principal amount of the security, normally within a specified time.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Ohio issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Ohio, the Fund may be subject to additional risks compared to funds that invest in multiple states. Ohio's economy is relatively diversified across the manufacturing, agriculture and services sectors. However, the manufacturing sector, in particular automobile manufacturing related industries, is still a major employer within Ohio and exposes the state to the economic dislocations which occur within cyclical industries.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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.
When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. 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.
The Fund offers three share classes: Institutional Shares, Institutional Service Shares and Cash II 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 classes.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Ohio taxpayers because it invests in Ohio municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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.
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
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.
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.
You will receive periodic statements reporting all account activity, including dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Ohio taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 29.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
2 |
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.04 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.02 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.04 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.02 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return3 |
|
3.80 |
% |
|
3.10 |
% |
|
3.43 |
% |
|
3.49 |
% |
|
2.22 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.45 |
% |
|
0.38 |
% |
|
0.38 |
% |
|
0.37 |
% |
|
0.37 |
%4 |
|
|
|||||||||||||||
|
Net investment income |
|
3.69 |
% |
|
3.08 |
% |
|
3.39 |
% |
|
3.40 |
% |
|
3.38 |
%4 |
|
|
|||||||||||||||
|
Expense waiver/reimbursement5 |
|
0.37 |
% |
|
0.48 |
% |
|
0.48 |
% |
|
0.48 |
% |
|
0.51 |
%4 |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$94,388 |
|
|
$107,874 |
|
|
$131,395 |
|
|
55,710 |
|
|
$72,680 |
|
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Reflects operations for the period from March 5, 1996 (date of initial public investment) to October 31, 1996.
3 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
4 Computed on an annualized basis.
5 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--98.9%1 |
|
|
|
|
|
|
|
Ohio--98.9% |
|
|
|
|
$ |
4,250,000 |
|
Avon Lake, OH, 4.75% BANs, 3/29/2001 |
|
$ |
4,256,601 |
|
|
5,875,000 |
|
Belmont County, OH Weekly VRDNs (Lesco, Inc.)/(PNC Bank, N.A. LOC) |
|
|
5,875,000 |
|
|
2,075,000 |
|
Belmont County, OH, 4.21% BANs, 11/21/2000 |
|
|
2,075,283 |
|
|
4,000,000 |
|
Brookville, OH, (Series 1988) Weekly VRDNs (Green Tokai)/(Bank of Tokyo-Mitsubishi Ltd. LOC) |
|
|
4,000,000 |
|
|
2,900,000 |
|
Butler County, OH, 4.80% BANs, 7/11/2001 |
|
|
2,907,669 |
|
|
6,585,000 |
|
Canfield, OH Local School District, 4.75% BANs, 9/27/2001 |
|
|
6,604,940 |
|
|
3,000,000 |
|
Chillicothe, OH, 5.25% BANs, 6/1/2001 |
|
|
3,006,556 |
|
|
5,785,000 |
|
Clermont County, OH, Variable Rate IDRBs, (Series 1997) Weekly VRDNs (Buriot International, Inc.)/(PNC Bank, N.A. LOC) |
|
|
5,785,000 |
|
|
1,250,000 |
|
Cleveland, OH Airport System, (Series A) 4.35% Bonds (FSA INS), 1/1/2001 |
|
|
1,250,000 |
|
|
14,049,000 |
|
Clipper Tax-Exempt Certificates Trust (Ohio AMT), Series 1999-4 Weekly VRDNs (Ohio HFA)/(GNMA COL)/(State Street Bank and Trust Co. LIQ) |
|
|
14,049,000 |
|
|
685,000 |
|
Clyde, OH, 5.13% BANs, 6/21/2001 |
|
|
685,930 |
|
|
1,475,000 |
|
Columbiana County, OH, IDRBs Weekly VRDNs (C & S Land Company Project)/(Bank One, N.A. (Ohio) LOC) |
|
|
1,475,000 |
|
|
11,000,000 |
|
Cuyahoga County, OH Hospital Authority, (Series C) Weekly VRDNs (Cleveland Clinic) |
|
|
11,000,000 |
|
|
300,000 |
|
Cuyahoga County, OH IDA Weekly VRDNs (Animal Protection League (Cuyahoga County))/(KeyBank, N.A. LOC) |
|
|
300,000 |
|
|
5,100,000 |
|
Cuyahoga County, OH IDA Weekly VRDNs (Cleveland Gear Co.)/ (KeyBank, N.A. LOC) |
|
|
5,100,000 |
|
|
1,050,000 |
|
Cuyahoga County, OH IDA Weekly VRDNs (East Park Community, Inc.)/(KeyBank, N.A. LOC) |
|
|
1,050,000 |
|
|
1,820,000 |
|
Cuyahoga County, OH IDA Weekly VRDNs (Sure-Foot Industries, Inc.)/ (FirstMerit Bank, N.A. LOC) |
|
|
1,820,000 |
|
|
2,500,000 |
|
Cuyahoga County, OH IDA, (Series 1999) Weekly VRDNs (Kowalski Heat Treating Co.)/(FirstMerit Bank, N.A. LOC) |
|
|
2,500,000 |
|
|
4,900,000 |
|
Cuyahoga County, OH, (Series 1999) Weekly VRDNs (National Terminal Apartments)/(Fleet National Bank, Springfield, MA LOC) |
|
|
4,900,000 |
|
|
1,390,000 |
|
Delaware County, OH, IDRB, (Series 1995) Weekly VRDNs (Air Waves, Inc. Project)/(KeyBank, N.A. LOC) |
|
|
1,390,000 |
|
|
2,750,000 |
|
Euclid, OH, 4.75% BANs, 7/26/2001 |
|
|
2,754,794 |
|
|
2,550,000 |
|
Franklin County, OH IDA Weekly VRDNs (Unicorn Leasing Corp.)/(Fifth Third Bank, Cincinnati LOC) |
|
|
2,550,000 |
|
|
2,770,000 |
|
Franklin County, OH IDA, (Series 1995) Weekly VRDNs (Fabcon LLC Project)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,770,000 |
|
|
4,900,000 |
|
Franklin County, OH IDA, Adjustable Rate Demand IDRBs, (Series 1996A) Weekly VRDNs (Carams, Ltd.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
4,900,000 |
|
Prinicipal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Ohio--continued |
|
|
|
|
$ |
1,170,000 |
|
Franklin County, OH IDA, Adjustable Rate Demand IDRBs, (Series 1996B) Weekly VRDNs (Carams, Ltd.)/(Huntington National Bank, Columbus, OH LOC) |
|
$ |
1,170,000 |
|
|
3,000,000 |
|
Franklin County, OH, 4.65% TOBs (Blacklick Station Apartments)/(Fifth Third Bank, Cincinnati LOC), Mandatory Tender 10/1/2001 |
|
|
3,000,000 |
|
|
1,415,000 |
|
Franklin County, OH, Adjustable Rate Demand Economic Development Revenue Refunding Bonds, (Series 1996) Weekly VRDNs (CPM Investments)/(Huntington National Bank, Columbus, OH LOC) |
|
|
1,415,000 |
|
|
900,000 |
|
Geauga County, OH Park District, 4.30% BANs, 12/7/2000 |
|
|
900,212 |
|
|
7,375,000 |
|
Greene County, OH, (Series E), 4.55% BANs, 6/1/2001 |
|
|
7,385,775 |
|
|
3,288,000 |
|
Greene County, OH, (Series F), 4.55% BANs, 8/22/2001 |
|
|
3,293,346 |
|
|
2,300,000 |
|
Hamilton, OH, 4.61% BANs, 4/26/2001 |
|
|
2,302,758 |
|
|
1,200,000 |
|
Hilliard, OH, 4.90% BANs, 9/6/2001 |
|
|
1,204,859 |
|
|
2,200,000 |
|
Holmes County, OH IDA Weekly VRDNs (Poultry Processing)/(U.S. Bank, N.A., Boise LOC) |
|
|
2,200,000 |
|
|
2,000,000 |
|
Huber Heights, OH, IDR, (Series 1999) Weekly VRDNs (Paxar Corp.)/(SunTrust Bank LOC) |
|
|
2,000,000 |
|
|
955,000 |
|
Huber Heights, OH, IDRB, (Series 1994) Weekly VRDNs (Lasermike, Inc. Project)/(KeyBank, N.A. LOC) |
|
|
955,000 |
|
|
1,200,000 |
|
Kent, OH, Adjustable Rate IDRBs, (Series 1994) Weekly VRDNs (Raven's Metal Products, Inc. Project)/(FirstMerit Bank, N.A. LOC) |
|
|
1,200,000 |
|
|
3,000,000 |
|
Knox County, OH, 4.81% BANs, 7/19/2001 |
|
|
3,006,750 |
|
|
1,800,000 |
|
Knox County, OH, 5.16% BANs, 7/19/2001 |
|
|
1,807,518 |
|
|
2,815,000 |
|
Lake County, OH, Adjustable Rate IDRBs, (Series 1996) Weekly VRDNs (Apsco Properties, Ltd.)/(Bank One, N.A. (Ohio) LOC) |
|
|
2,815,000 |
|
|
2,050,000 |
|
Lorain County, OH Weekly VRDNs (Ohio Metallurgical Service, Inc.)/(FirstMerit Bank, N.A. LOC) |
|
|
2,050,000 |
|
|
3,485,000 |
|
Lorain Port Authority, OH, (Series 1994) Weekly VRDNs (Spitzer Great Lakes Ltd., Inc.)/(Bank One, N.A. (Ohio) LOC) |
|
|
3,485,000 |
|
|
950,000 |
|
Lorain Port Authority, OH, Adjustable Rate Demand Port Development Refunding Revenue Bonds, (Series 1996) Weekly VRDNs (Spitzer Project)/(Bank One, N.A. (Ohio) LOC) |
|
|
950,000 |
|
|
8,305,000 |
|
Lorain Port Authority, OH, IDRB, (Series 1996) Weekly VRDNs (Brush Wellman, Inc.)/(National City Bank, Ohio LOC) |
|
|
8,305,000 |
|
|
165,000 |
|
Lucas County, OH, Hospital Improvement Revenue Weekly VRDNs (Sunshine Children's Home)/(National City Bank, Ohio LOC) |
|
|
165,000 |
|
|
4,000,000 |
|
Lucas County, OH, 4.56% BANs, 4/12/2001 |
|
|
4,003,560 |
|
|
1,235,000 |
|
Lucas County, OH, Hospital Facility Improvement Revenue Bonds, (Series 93) Weekly VRDNs (Lott Industries, Inc.)/(National City Bank, Ohio LOC) |
|
|
1,235,000 |
|
|
3,500,000 |
|
Mahoning County, OH IDA, (Series 1999) Weekly VRDNs (Modern Builders Supply, Inc.)/(PNC Bank, N.A. LOC) |
|
|
3,500,000 |
|
|
5,025,000 |
|
Mahoning County, OH Multifamily HFA Weekly VRDNs (International Towers, Inc.)/(PNC Bank, N.A. LOC) |
|
|
5,025,000 |
|
|
2,500,000 |
|
Mansfield, OH, 4.82% BANs, 5/3/2001 |
|
|
2,503,833 |
|
Prinicipal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Ohio--continued |
|
|
|
|
$ |
40,000 |
|
Marion County, OH Health Care Facilities Weekly VRDNs (Marion Area Counseling Center, Inc.)/(Huntington National Bank, Columbus, OH LOC) |
|
$ |
40,000 |
|
|
4,660,000 |
|
Medina County, OH Weekly VRDNs (Three D Metals, Inc.)/(Firstar Bank, N.A., Cincinnati LOC) |
|
|
4,660,000 |
|
|
6,250,000 |
|
Medina County, OH, (Series 1998) Weekly VRDNs (Mack Industries)/(Huntington National Bank, Columbus, OH LOC) |
|
|
6,250,000 |
|
|
2,480,000 |
|
Medina County, OH, (Series 1998) Weekly VRDNs (Michael Day Enterprises)/(KeyBank, N.A. LOC) |
|
|
2,480,000 |
|
|
5,400,000 |
|
Medina County, OH, Solid Waste Disposal Revenue Bonds, (Series 1995) Weekly VRDNs (Valley City Steel Company Project)/(KeyBank, N.A. LOC) |
|
|
5,400,000 |
|
|
3,355,000 |
|
Miami County, OH, 4.86% BANs, 7/11/2001 |
|
|
3,360,520 |
|
|
4,450,000 |
|
Montgomery County, OH, (Series 1998B) 4.20% CP (Miami (OH) Valley Hospital)/(Morgan Guaranty Trust Co., New York LIQ), Mandatory Tender 11/13/2000 |
|
|
4,450,000 |
|
|
1,400,000 |
|
Montgomery County, OH, Revenue Bonds, (Series A) 6.20% Bonds (Sisters of Charity Health Care System)/(MBIA INS), 5/15/2001 |
|
|
1,412,374 |
|
|
515,000 |
|
North Olmsted, OH IDA, 5.00% TOBs (Therm-All)/(National City Bank, Ohio LOC), Optional Tender 2/1/2001 |
|
|
515,000 |
|
|
935,000 |
|
Ohio HFA Weekly VRDNs (Westchester Village)/(KeyBank, N.A. LOC) |
|
|
935,000 |
|
|
6,405,000 |
|
Ohio HFA, 4.40% TOBs (Lincoln Park Associates)/(Bank One, N.A. (Ohio) LOC), Optional Tender 11/1/2000 |
|
|
6,405,000 |
|
|
5,000,000 |
|
Ohio State Air Quality Development Authority, Air Quality Development Revenue Bonds, (1995 Series B) Weekly VRDNs (JMG Funding LP)/(Societe Generale, Paris LOC) |
|
|
5,000,000 |
|
|
3,635,000 |
|
Ohio State, Environmental Improvement Revenue Bonds, (Series 1996) Weekly VRDNs (Newark Group Industries, Inc.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
3,635,000 |
|
|
1,000,000 |
|
Ohio State, IDRB, (Series 1994) Weekly VRDNs (Anomatic Corp.)/(National City Bank, Ohio LOC) |
|
|
1,000,000 |
|
|
600,000 |
|
Orrville, OH IDA Weekly VRDNs (O.S. Associates/Contours, Inc.)/(National City Bank, Ohio LOC) |
|
|
600,000 |
|
|
2,250,000 |
|
Perrysburg, OH, 4.45% BANs, 11/16/2000 |
|
|
2,250,399 |
|
|
4,800,000 |
|
Pickaway County, OH IDA Weekly VRDNs (Crane Plastics)/(Bank One, N.A. (Ohio) LOC) |
|
|
4,800,000 |
|
|
645,000 |
|
Portage County, OH IDA Weekly VRDNs (Lovejoy Industries)/(Firstar Bank, N.A., Cincinnati LOC) |
|
|
645,000 |
|
|
3,690,000 |
|
Portage County, OH IDA, Adjustable Rate IDRBs, (Series 1996) Weekly VRDNs (Barnette Project)/(National City Bank, Ohio LOC) |
|
|
3,690,000 |
|
|
240,000 |
|
Solon, OH, IDR Weekly VRDNs (Graphic Laminating)/(KeyBank, N.A. LOC) |
|
|
240,000 |
|
|
1,840,000 |
|
Springfield, OH, 4.70% BANs, 9/26/2001 |
|
|
1,843,964 |
|
|
400,000 |
|
Stark County, OH IDR Weekly VRDNs (Sancap Abrasives, Inc.)/ (KeyBank, N.A. LOC) |
|
|
400,000 |
|
|
5,430,000 |
|
Stark County, OH IDR Weekly VRDNs (Shearer's Foods, Inc.)/(Bank One, N.A. (Ohio) LOC) |
|
|
5,430,000 |
|
Prinicipal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Ohio--continued |
|
|
|
|
$ |
1,745,000 |
|
Stark County, OH IDR, (Series 1994) Weekly VRDNs (Wilkof Morris)/ (KeyBank, N.A. LOC) |
|
$ |
1,745,000 |
|
|
1,080,000 |
|
Stark County, OH IDR, IDRB, (Series 1996) Weekly VRDNs (Foundations Systems and Anchors, Inc. Project)/(Bank One, N.A. (Ohio) LOC) |
|
|
1,080,000 |
|
|
1,160,000 |
|
Strongsville, OH Weekly VRDNs (Monarch Engraving, Inc.)/(FirstMerit Bank, N.A. LOC) |
|
|
1,160,000 |
|
|
985,000 |
|
Strongsville, OH, (Series 1994) Weekly VRDNs (Nutro Machinery Corp.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
985,000 |
|
|
1,875,000 |
|
Strongsville, OH, 4.60% BANs, 10/17/2001 |
|
|
1,878,776 |
|
|
3,000,000 |
|
Summit County, OH IDR Weekly VRDNs (Gardner Pie Co., Inc.)/(FirstMerit Bank, N.A. LOC) |
|
|
3,000,000 |
|
|
4,340,000 |
|
Summit County, OH IDR, (Series 1994) Weekly VRDNs (Harry London Candies, Inc.)/(KeyBank, N.A. LOC) |
|
|
4,340,000 |
|
|
900,000 |
|
Summit County, OH IDR, (Series 1997) Weekly VRDNs (Baker McMillen Co.)/(National City Bank, Ohio LOC) |
|
|
900,000 |
|
|
2,730,000 |
|
Summit County, OH IDR, (Series 1997) Weekly VRDNs (Malco Products, Inc.)/(Bank One, Ohio, N.A. LOC) |
|
|
2,730,000 |
|
|
1,985,000 |
|
Summit County, OH IDR, (Series 1998( Weekly VRDNs (Waldonia Investment)/(KeyBank, N.A. LOC) |
|
|
1,985,000 |
|
|
5,925,000 |
|
Summit County, OH IDR, (Series 1999) Weekly VRDNs (Waltco Truck Equipment)/(Svenska Handelsbanken, Stockholm LOC) |
|
|
5,925,000 |
|
|
425,000 |
|
Summit County, OH IDR, 5.00% TOBs (Bechmer-Boyce Project)/ (KeyBank, N.A. LOC), Optional Tender 1/15/2001 |
|
|
425,000 |
|
|
610,000 |
|
Summit County, OH IDR, 4.85% TOBs (Universal Rack)/(National City Bank, Ohio LOC), Optional Tender 2/1/2001 |
|
|
610,000 |
|
|
1,125,000 |
|
Summit County, OH IDR, Adjustable Rate IDRBs, (Series 1996) Weekly VRDNs (Fomo Products, Inc.)/(FirstMerit Bank, N.A. LOC) |
|
|
1,125,000 |
|
|
538,000 |
|
Summit County, OH IDR, Bonds, (Series 1994) Weekly VRDNs (Austin Printing Co., Inc.)/(Bank One, N.A. (Ohio) LOC) |
|
|
538,000 |
|
|
1,795,000 |
|
Summit County, OH IDR, IDRB, (Series 1994B) Weekly VRDNs (Harry London Candies, Inc.)/(KeyBank, N.A. LOC) |
|
|
1,795,000 |
|
|
585,000 |
|
Summit County, OH IDR, IDRB, (Series 1995) Weekly VRDNs (Cardtech Project (OH))/(KeyBank, N.A. LOC) |
|
|
585,000 |
|
|
605,000 |
|
Summit County, OH IDR, Multi-Mode Variable Rate I Weekly VRDNs (Mastergraphics, Inc. Project)/(KeyBank, N.A. LOC) |
|
|
605,000 |
|
|
1,815,000 |
|
Summit County, OH IDR, Variable Rate IDRBs, (Series 1998A) Weekly VRDNs (Wintek Ltd.)/(FirstMerit Bank, N.A. LOC) |
|
|
1,815,000 |
|
|
4,000,000 |
|
Toledo-Lucas County, OH Port Authority, Airport Development Revenue Bonds, (Series 1996-1) Weekly VRDNs (Burlington Air Express, Inc.)/(ABN AMRO Bank N.V., Amsterdam LOC) |
|
|
4,000,000 |
|
|
1,000,000 |
|
Toledo-Lucas County, OH Port Authority, IDA Weekly VRDNs (Medusa Corp.)/(Bayerische Hypotheken-und Vereinsbank AG LOC) |
|
|
1,000,000 |
|
|
1,700,000 |
|
Trumbull County, OH IDA, (Series 1989) Weekly VRDNs (McSonald Steel Corp.)/(PNC Bank, N.A. LOC) |
|
|
1,700,000 |
|
Prinicipal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Ohio--continued |
|
|
|
|
$ |
1,200,000 |
|
Trumbull County, OH IDA, IDR Refunding Bonds, (Series 1994) Weekly VRDNs (Churchill Downs, Inc.)/(Bank One, N.A. (Ohio) LOC) |
|
$ |
1,200,000 |
|
|
1,315,000 |
|
Tuscarawas County, OH, Adjustable Rate IDRBs, (Series 1995) Weekly VRDNs (Primary Packaging, Inc.)/(FirstMerit Bank, N.A. LOC) |
|
|
1,315,000 |
|
|
2,190,000 |
|
Williams County, OH, Multi-Mode Variable Rate IDRBs (Series 1996) Weekly VRDNs (Allied Moulded Products, Inc.)/(KeyBank, N.A. LOC) |
|
|
2,190,000 |
|
|
930,000 |
|
Willoughby City, OH, IDR Refunding Bonds, (Series 1995A) Weekly VRDNs (Pine Ridge Shopping Center Company Project)/(Firstar Bank, N.A., Cincinnati LOC) |
|
|
930,000 |
|
|
975,000 |
|
Willoughby City, OH, IDR Revenue Bonds (Series 1995B) Weekly VRDNs (Pine Ridge Shopping Center Company Project)/(Firstar Bank, N.A. Cininnati LOC) |
|
|
975,000 |
|
|
600,000 |
|
Wood County, OH Weekly VRDNs (Principle Business Enterprises)/(National City Bank, Ohio LOC) |
|
|
600,000 |
|
|
1,835,000 |
|
Wood County, OH, EDRB Weekly VRDNs (Roe Inc. Project)/(Huntington National Bank, Columbus, OH LOC) |
|
|
1,835,000 |
|
|
875,000 |
|
Wood County, OH, Series 1998 Weekly VRDNs (IMCO Carbide Tool, Inc.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
875,000 |
|
|
960,000 |
|
Wood County, OH, Williams Industrial Service Inc., Project Weekly VRDNs (Williams Industrial Service, Inc.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
960,000 |
|
|
3,490,000 |
|
Youngstown, OH, (Series 1996A) Weekly VRDNs (Cantar/Polyair Corp./Performa Corp.)/(HSBC Bank USA LOC) |
|
|
3,490,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)2 |
|
$ |
278,623,417 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 68.4% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by NRSROs or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
99.8% |
|
0.2% |
2 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($281,706,427) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMT |
--Alternative Minimum Tax |
|
BANs |
--Bond Anticipation Notes |
|
COL |
--Collateralized |
|
CP |
--Commercial Paper |
|
EDRB |
--Economic Development Revenue Bonds |
|
FSA |
--Financial Security Assurance |
|
GNMA |
--Government National Mortgage Association |
|
HFA |
--Housing Finance Authority |
|
IDA |
--Industrial Development Authority |
|
IDR |
--Industrial Development Revenue |
|
IDRBs |
--Industrial Development Revenue Bond(s) |
|
INS |
--Insured |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
TOBs |
--Tender Option Bonds |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
278,623,417 |
|
Cash |
|
|
|
|
|
1,236,014 |
|
Income receivable |
|
|
|
|
|
2,188,314 |
|
Receivable for shares sold |
|
|
|
|
|
422,440 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
282,470,185 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Income distribution payable |
|
$ |
688,263 |
|
|
|
|
Accrued expenses |
|
|
75,495 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
763,758 |
|
|
||||||
|
Net assets for 281,706,427 shares outstanding |
|
|
|
|
$ |
281,706,427 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
$94,388,263 ÷ 94,388,263 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Institutional Service Shares: |
|
|
|
|
|
|
|
$122,293,795 ÷ 122,293,795 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Cash II Shares: |
|
|
|
|
|
|
|
$65,024,369 ÷ 65,024,369 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
11,745,884 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
1,126,048 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
212,008 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
16,617 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
24,991 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
2,770 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,677 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
34,244 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
89,372 |
|
|
|
|
|
Distribution services fee--Cash II Shares |
|
|
|
|
|
|
216,852 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
265,732 |
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
257,338 |
|
|
|
|
|
Shareholder services fee--Cash II Shares |
|
|
|
|
|
|
180,710 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
44,900 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
22,871 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
14,048 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
1,365 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
2,521,543 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(342,310 |
) |
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Cash II Shares |
|
|
(36,142 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(265,732 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(51,468 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(695,652 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
1,825,891 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
9,919,993 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
9,919,993 |
|
|
$ |
10,226,317 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(3,924,832 |
) |
|
|
(4,019,703 |
) |
|
Institutional Service Shares |
|
|
(3,674,842 |
) |
|
|
(2,810,726 |
) |
|
Cash II Shares |
|
|
(2,320,319 |
) |
|
|
(3,395,888 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(9,919,993 |
) |
|
|
(10,226,317 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
1,305,244,506 |
|
|
|
1,437,132,752 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
3,165,192 |
|
|
|
3,824,029 |
|
|
Cost of shares redeemed |
|
|
(1,342,468,426 |
) |
|
|
(1,694,429,001 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(34,058,728 |
) |
|
|
(253,472,220 |
) |
|
|
||||||||
|
Change in net assets |
|
|
(34,058,728 |
) |
|
|
(253,472,220 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
315,765,155 |
|
|
|
569,237,375 |
|
|
|
||||||||
|
End of period |
|
$ |
281,706,427 |
|
|
$ |
315,765,155 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Money Market Obligations Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of Ohio Municipal Cash Trust (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers three classes of shares: Institutional Shares, Institutional Service Shares and Cash II Shares. The investment objective of the Fund is to provide current income exempt from federal regular income tax and the personal income taxes imposed by the State of Ohio and Ohio municipalities consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees ("Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At October 31, 2000, capital paid-in aggregated $281,706,427.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
781,192,196 |
|
|
733,607,559 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
300,704 |
|
|
166,650 |
|
|
Shares redeemed |
|
(794,978,994 |
) |
|
(757,294,785 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
(13,486,094 |
) |
|
(23,520,576 |
) |
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
Shares sold |
|
286,893,901 |
|
|
253,460,934 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
606,528 |
|
|
667,036 |
|
|
Shares redeemed |
|
(255,501,208 |
) |
|
(258,729,340 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
31,999,221 |
|
|
(4,601,370 |
) |
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Cash II Shares: |
|
|
|
|
|
|
|
Shares sold |
|
237,158,409 |
|
|
450,064,259 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
2,257,960 |
|
|
2,990,343 |
|
|
Shares redeemed |
|
(291,988,224 |
) |
|
(678,404,876 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM CASH II SHARE TRANSACTIONS |
|
(52,571,855 |
) |
|
(225,350,274 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(34,058,728 |
) |
|
(253,472,220 |
) |
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment Adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federate Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Cash II Shares. The Plan provides that the Fund may incur distribution expenses up to 0.30% of the average daily net assets of Cash II Shares, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $528,272,532 and $583,171,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 68.6% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 11.5% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Ohio Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Ohio Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
Statement of Additional Information (SAI) dated December 31, 2000 is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as they become available. To obtain the SAI, the Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Ohio Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N427
G00211-01-IS (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and the personal income tax imposed by the State of Ohio and Ohio municipalities consistent with stability of principal by investing in a portfolio of short-term, high-quality Ohio tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 8
How to Purchase Shares 8
How to Redeem Shares 10
Account and Share Information 13
Who Manages the Fund? 14
Financial Information 14
Report of Ernst & Young LLP, Independent Auditors 29
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and the personal income taxes imposed by the State of Ohio and Ohio municipalities 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.
The Fund invests in short-term, high-quality Ohio tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and the personal income taxes imposed by the State of Ohio and Ohio municipalities. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Service Shares total returns on a calendar year-end basis.
The Fund's Institutional Service Shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's Institutional Service Shares total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.68%.
Within the period shown in the Chart, the Fund's Institutional Service Shares highest quarterly return was 0.95% (quarter ended June 30, 1995). Its lowest quarterly return was 0.52% (quarter ended March 31, 1994).
The following table represents the Fund's Institutional Service Shares Average Annual Total Returns for the calendar periods ended December 31, 1998.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.97% |
|
5 Years |
|
3.26% |
|
Start of Performance1 |
|
3.13% |
1 The Fund's Institutional Service Shares start of performance date was April 22, 1991.
The Fund's Institutional Service Shares 7-Day Net Yield as of December 31, 1999 was 3.99%.
You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Shares of the Fund's Institutional Service Shares.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) . |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.40% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee3 |
|
0.25% |
|
Other Expenses |
|
0.17% |
|
Total Annual Fund Operating Expenses |
|
0.82% |
|
1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ending October 31, 2000. |
||
|
Total Waiver of Fund Expenses |
|
0.17% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.65% |
|
2 The adviser has voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.28% for the fiscal year ending October 31, 2000. |
||
|
3 The shareholder services provider has voluntarily waived a portion of the shareholder services fee. This voluntary waiver can be terminated at any time. The shareholder services fee paid by the Fund (after the voluntary waiver) was 0.20% for the fiscal year ending October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Institutional Service Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Institutional Services 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 Services Shares operating expenses are before waivers as shown above and remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
$ |
84 |
|
|
||
|
3 Years |
$ |
262 |
|
|
||
|
5 Years |
$ |
455 |
|
|
||
|
10 Years |
$ |
1,014 |
|
|
||
The Fund invests in a portfolio of high-quality Ohio tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Ohio state income taxes. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal and Ohio income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. Fixed income securities pay interest, dividends or distributions at a specified rate. The rate may be a fixed percentage of the principal or adjusted periodically. In addition, the issuer must repay the principal amount of the security, normally within a specified time.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Ohio issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Ohio, the Fund may be subject to additional risks compared to funds that invest in multiple states. Ohio's economy is relatively diversified across the manufacturing, agriculture and services sectors. However, the manufacturing sector, in particular automobile manufacturing related industries, is still a major employer within Ohio and exposes the state to the economic dislocations which occur within cyclical industries.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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.
When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. 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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
The Fund offers three share classes: Institutional Shares, Institutional Service Shares and Cash II Shares, each representing interests in a single portfolio of securities. This prospectus relates only to Institutional Service Shares. Each share class has different expenses, which affect their performance. Contact your investment professional or call 1-800-341-7400 for more information concerning the other classes.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Ohio taxpayers because it invests in Ohio municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by calling the Fund at 1-800-341-7400 once you have completed the appropriate authorization form for telephone transactions.
If you call before 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.
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Ohio taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 29.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.04 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.04 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.59 |
% |
|
2.90 |
% |
|
3.22 |
% |
|
3.29 |
% |
|
3.27 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.65 |
% |
|
0.57 |
% |
|
0.57 |
% |
|
0.57 |
% |
|
0.57 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.57 |
% |
|
2.88 |
% |
|
3.17 |
% |
|
3.25 |
% |
|
3.23 |
% |
|
|
|||||||||||||||
|
Expense waiver/reimbursement3 |
|
0.17 |
% |
|
0.28 |
% |
|
0.28 |
% |
|
0.28 |
% |
|
0.31 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$122,294 |
|
|
$90,294 |
|
|
$94,896 |
|
|
$80,619 |
|
|
$59,721 |
|
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--98.9%1 |
|
|
|
|
|
|
|
Ohio--98.9% |
|
|
|
|
$ |
4,250,000 |
|
Avon Lake, OH, 4.75% BANs, 3/29/2001 |
|
$ |
4,256,601 |
|
|
5,875,000 |
|
Belmont County, OH Weekly VRDNs (Lesco, Inc.)/(PNC Bank, N.A. LOC) |
|
|
5,875,000 |
|
|
2,075,000 |
|
Belmont County, OH, 4.21% BANs, 11/21/2000 |
|
|
2,075,283 |
|
|
4,000,000 |
|
Brookville, OH, (Series 1988) Weekly VRDNs (Green Tokai)/(Bank of Tokyo-Mitsubishi Ltd. LOC) |
|
|
4,000,000 |
|
|
2,900,000 |
|
Butler County, OH, 4.80% BANs, 7/11/2001 |
|
|
2,907,669 |
|
|
6,585,000 |
|
Canfield, OH Local School District, 4.75% BANs, 9/27/2001 |
|
|
6,604,940 |
|
|
3,000,000 |
|
Chillicothe, OH, 5.25% BANs, 6/1/2001 |
|
|
3,006,556 |
|
|
5,785,000 |
|
Clermont County, OH, Variable Rate IDRBs, (Series 1997) Weekly VRDNs (Buriot International, Inc.)/(PNC Bank, N.A. LOC) |
|
|
5,785,000 |
|
|
1,250,000 |
|
Cleveland, OH Airport System, (Series A) 4.35% Bonds (FSA INS), 1/1/2001 |
|
|
1,250,000 |
|
|
14,049,000 |
|
Clipper Tax-Exempt Certificates Trust (Ohio AMT), Series 1999-4 Weekly VRDNs (Ohio HFA)/(GNMA COL)/(State Street Bank and Trust Co. LIQ) |
|
|
14,049,000 |
|
|
685,000 |
|
Clyde, OH, 5.13% BANs, 6/21/2001 |
|
|
685,930 |
|
|
1,475,000 |
|
Columbiana County, OH, IDRBs Weekly VRDNs (C & S Land Company Project)/(Bank One, N.A. (Ohio) LOC) |
|
|
1,475,000 |
|
|
11,000,000 |
|
Cuyahoga County, OH Hospital Authority, (Series C) Weekly VRDNs (Cleveland Clinic) |
|
|
11,000,000 |
|
|
300,000 |
|
Cuyahoga County, OH IDA Weekly VRDNs (Animal Protection League (Cuyahoga County))/(KeyBank, N.A. LOC) |
|
|
300,000 |
|
|
5,100,000 |
|
Cuyahoga County, OH IDA Weekly VRDNs (Cleveland Gear Co.)/ (KeyBank, N.A. LOC) |
|
|
5,100,000 |
|
|
1,050,000 |
|
Cuyahoga County, OH IDA Weekly VRDNs (East Park Community, Inc.)/(KeyBank, N.A. LOC) |
|
|
1,050,000 |
|
|
1,820,000 |
|
Cuyahoga County, OH IDA Weekly VRDNs (Sure-Foot Industries, Inc.)/ (FirstMerit Bank, N.A. LOC) |
|
|
1,820,000 |
|
|
2,500,000 |
|
Cuyahoga County, OH IDA, (Series 1999) Weekly VRDNs (Kowalski Heat Treating Co.)/(FirstMerit Bank, N.A. LOC) |
|
|
2,500,000 |
|
|
4,900,000 |
|
Cuyahoga County, OH, (Series 1999) Weekly VRDNs (National Terminal Apartments)/(Fleet National Bank, Springfield, MA LOC) |
|
|
4,900,000 |
|
|
1,390,000 |
|
Delaware County, OH, IDRB, (Series 1995) Weekly VRDNs (Air Waves, Inc. Project)/(KeyBank, N.A. LOC) |
|
|
1,390,000 |
|
|
2,750,000 |
|
Euclid, OH, 4.75% BANs, 7/26/2001 |
|
|
2,754,794 |
|
|
2,550,000 |
|
Franklin County, OH IDA Weekly VRDNs (Unicorn Leasing Corp.)/(Fifth Third Bank, Cincinnati LOC) |
|
|
2,550,000 |
|
|
2,770,000 |
|
Franklin County, OH IDA, (Series 1995) Weekly VRDNs (Fabcon LLC Project)/(Wells Fargo Bank Minnesota, N.A. LOC) |
|
|
2,770,000 |
|
|
4,900,000 |
|
Franklin County, OH IDA, Adjustable Rate Demand IDRBs, (Series 1996A) Weekly VRDNs (Carams, Ltd.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
4,900,000 |
|
Prinicipal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Ohio--continued |
|
|
|
|
$ |
1,170,000 |
|
Franklin County, OH IDA, Adjustable Rate Demand IDRBs, (Series 1996B) Weekly VRDNs (Carams, Ltd.)/(Huntington National Bank, Columbus, OH LOC) |
|
$ |
1,170,000 |
|
|
3,000,000 |
|
Franklin County, OH, 4.65% TOBs (Blacklick Station Apartments)/(Fifth Third Bank, Cincinnati LOC), Mandatory Tender 10/1/2001 |
|
|
3,000,000 |
|
|
1,415,000 |
|
Franklin County, OH, Adjustable Rate Demand Economic Development Revenue Refunding Bonds, (Series 1996) Weekly VRDNs (CPM Investments)/(Huntington National Bank, Columbus, OH LOC) |
|
|
1,415,000 |
|
|
900,000 |
|
Geauga County, OH Park District, 4.30% BANs, 12/7/2000 |
|
|
900,212 |
|
|
7,375,000 |
|
Greene County, OH, (Series E), 4.55% BANs, 6/1/2001 |
|
|
7,385,775 |
|
|
3,288,000 |
|
Greene County, OH, (Series F), 4.55% BANs, 8/22/2001 |
|
|
3,293,346 |
|
|
2,300,000 |
|
Hamilton, OH, 4.61% BANs, 4/26/2001 |
|
|
2,302,758 |
|
|
1,200,000 |
|
Hilliard, OH, 4.90% BANs, 9/6/2001 |
|
|
1,204,859 |
|
|
2,200,000 |
|
Holmes County, OH IDA Weekly VRDNs (Poultry Processing)/(U.S. Bank, N.A., Boise LOC) |
|
|
2,200,000 |
|
|
2,000,000 |
|
Huber Heights, OH, IDR, (Series 1999) Weekly VRDNs (Paxar Corp.)/(SunTrust Bank LOC) |
|
|
2,000,000 |
|
|
955,000 |
|
Huber Heights, OH, IDRB, (Series 1994) Weekly VRDNs (Lasermike, Inc. Project)/(KeyBank, N.A. LOC) |
|
|
955,000 |
|
|
1,200,000 |
|
Kent, OH, Adjustable Rate IDRBs, (Series 1994) Weekly VRDNs (Raven's Metal Products, Inc. Project)/(FirstMerit Bank, N.A. LOC) |
|
|
1,200,000 |
|
|
3,000,000 |
|
Knox County, OH, 4.81% BANs, 7/19/2001 |
|
|
3,006,750 |
|
|
1,800,000 |
|
Knox County, OH, 5.16% BANs, 7/19/2001 |
|
|
1,807,518 |
|
|
2,815,000 |
|
Lake County, OH, Adjustable Rate IDRBs, (Series 1996) Weekly VRDNs (Apsco Properties, Ltd.)/(Bank One, N.A. (Ohio) LOC) |
|
|
2,815,000 |
|
|
2,050,000 |
|
Lorain County, OH Weekly VRDNs (Ohio Metallurgical Service, Inc.)/(FirstMerit Bank, N.A. LOC) |
|
|
2,050,000 |
|
|
3,485,000 |
|
Lorain Port Authority, OH, (Series 1994) Weekly VRDNs (Spitzer Great Lakes Ltd., Inc.)/(Bank One, N.A. (Ohio) LOC) |
|
|
3,485,000 |
|
|
950,000 |
|
Lorain Port Authority, OH, Adjustable Rate Demand Port Development Refunding Revenue Bonds, (Series 1996) Weekly VRDNs (Spitzer Project)/(Bank One, N.A. (Ohio) LOC) |
|
|
950,000 |
|
|
8,305,000 |
|
Lorain Port Authority, OH, IDRB, (Series 1996) Weekly VRDNs (Brush Wellman, Inc.)/(National City Bank, Ohio LOC) |
|
|
8,305,000 |
|
|
165,000 |
|
Lucas County, OH, Hospital Improvement Revenue Weekly VRDNs (Sunshine Children's Home)/(National City Bank, Ohio LOC) |
|
|
165,000 |
|
|
4,000,000 |
|
Lucas County, OH, 4.56% BANs, 4/12/2001 |
|
|
4,003,560 |
|
|
1,235,000 |
|
Lucas County, OH, Hospital Facility Improvement Revenue Bonds, (Series 93) Weekly VRDNs (Lott Industries, Inc.)/(National City Bank, Ohio LOC) |
|
|
1,235,000 |
|
|
3,500,000 |
|
Mahoning County, OH IDA, (Series 1999) Weekly VRDNs (Modern Builders Supply, Inc.)/(PNC Bank, N.A. LOC) |
|
|
3,500,000 |
|
|
5,025,000 |
|
Mahoning County, OH Multifamily HFA Weekly VRDNs (International Towers, Inc.)/(PNC Bank, N.A. LOC) |
|
|
5,025,000 |
|
|
2,500,000 |
|
Mansfield, OH, 4.82% BANs, 5/3/2001 |
|
|
2,503,833 |
|
Prinicipal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Ohio--continued |
|
|
|
|
$ |
40,000 |
|
Marion County, OH Health Care Facilities Weekly VRDNs (Marion Area Counseling Center, Inc.)/(Huntington National Bank, Columbus, OH LOC) |
|
$ |
40,000 |
|
|
4,660,000 |
|
Medina County, OH Weekly VRDNs (Three D Metals, Inc.)/(Firstar Bank, N.A., Cincinnati LOC) |
|
|
4,660,000 |
|
|
6,250,000 |
|
Medina County, OH, (Series 1998) Weekly VRDNs (Mack Industries)/(Huntington National Bank, Columbus, OH LOC) |
|
|
6,250,000 |
|
|
2,480,000 |
|
Medina County, OH, (Series 1998) Weekly VRDNs (Michael Day Enterprises)/(KeyBank, N.A. LOC) |
|
|
2,480,000 |
|
|
5,400,000 |
|
Medina County, OH, Solid Waste Disposal Revenue Bonds, (Series 1995) Weekly VRDNs (Valley City Steel Company Project)/(KeyBank, N.A. LOC) |
|
|
5,400,000 |
|
|
3,355,000 |
|
Miami County, OH, 4.86% BANs, 7/11/2001 |
|
|
3,360,520 |
|
|
4,450,000 |
|
Montgomery County, OH, (Series 1998B) 4.20% CP (Miami (OH) Valley Hospital)/(Morgan Guaranty Trust Co., New York LIQ), Mandatory Tender 11/13/2000 |
|
|
4,450,000 |
|
|
1,400,000 |
|
Montgomery County, OH, Revenue Bonds, (Series A) 6.20% Bonds (Sisters of Charity Health Care System)/(MBIA INS), 5/15/2001 |
|
|
1,412,374 |
|
|
515,000 |
|
North Olmsted, OH IDA, 5.00% TOBs (Therm-All)/(National City Bank, Ohio LOC), Optional Tender 2/1/2001 |
|
|
515,000 |
|
|
935,000 |
|
Ohio HFA Weekly VRDNs (Westchester Village)/(KeyBank, N.A. LOC) |
|
|
935,000 |
|
|
6,405,000 |
|
Ohio HFA, 4.40% TOBs (Lincoln Park Associates)/(Bank One, N.A. (Ohio) LOC), Optional Tender 11/1/2000 |
|
|
6,405,000 |
|
|
5,000,000 |
|
Ohio State Air Quality Development Authority, Air Quality Development Revenue Bonds, (1995 Series B) Weekly VRDNs (JMG Funding LP)/(Societe Generale, Paris LOC) |
|
|
5,000,000 |
|
|
3,635,000 |
|
Ohio State, Environmental Improvement Revenue Bonds, (Series 1996) Weekly VRDNs (Newark Group Industries, Inc.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
3,635,000 |
|
|
1,000,000 |
|
Ohio State, IDRB, (Series 1994) Weekly VRDNs (Anomatic Corp.)/(National City Bank, Ohio LOC) |
|
|
1,000,000 |
|
|
600,000 |
|
Orrville, OH IDA Weekly VRDNs (O.S. Associates/Contours, Inc.)/(National City Bank, Ohio LOC) |
|
|
600,000 |
|
|
2,250,000 |
|
Perrysburg, OH, 4.45% BANs, 11/16/2000 |
|
|
2,250,399 |
|
|
4,800,000 |
|
Pickaway County, OH IDA Weekly VRDNs (Crane Plastics)/(Bank One, N.A. (Ohio) LOC) |
|
|
4,800,000 |
|
|
645,000 |
|
Portage County, OH IDA Weekly VRDNs (Lovejoy Industries)/(Firstar Bank, N.A., Cincinnati LOC) |
|
|
645,000 |
|
|
3,690,000 |
|
Portage County, OH IDA, Adjustable Rate IDRBs, (Series 1996) Weekly VRDNs (Barnette Project)/(National City Bank, Ohio LOC) |
|
|
3,690,000 |
|
|
240,000 |
|
Solon, OH, IDR Weekly VRDNs (Graphic Laminating)/(KeyBank, N.A. LOC) |
|
|
240,000 |
|
|
1,840,000 |
|
Springfield, OH, 4.70% BANs, 9/26/2001 |
|
|
1,843,964 |
|
|
400,000 |
|
Stark County, OH IDR Weekly VRDNs (Sancap Abrasives, Inc.)/ (KeyBank, N.A. LOC) |
|
|
400,000 |
|
|
5,430,000 |
|
Stark County, OH IDR Weekly VRDNs (Shearer's Foods, Inc.)/(Bank One, N.A. (Ohio) LOC) |
|
|
5,430,000 |
|
Prinicipal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Ohio--continued |
|
|
|
|
$ |
1,745,000 |
|
Stark County, OH IDR, (Series 1994) Weekly VRDNs (Wilkof Morris)/ (KeyBank, N.A. LOC) |
|
$ |
1,745,000 |
|
|
1,080,000 |
|
Stark County, OH IDR, IDRB, (Series 1996) Weekly VRDNs (Foundations Systems and Anchors, Inc. Project)/(Bank One, N.A. (Ohio) LOC) |
|
|
1,080,000 |
|
|
1,160,000 |
|
Strongsville, OH Weekly VRDNs (Monarch Engraving, Inc.)/(FirstMerit Bank, N.A. LOC) |
|
|
1,160,000 |
|
|
985,000 |
|
Strongsville, OH, (Series 1994) Weekly VRDNs (Nutro Machinery Corp.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
985,000 |
|
|
1,875,000 |
|
Strongsville, OH, 4.60% BANs, 10/17/2001 |
|
|
1,878,776 |
|
|
3,000,000 |
|
Summit County, OH IDR Weekly VRDNs (Gardner Pie Co., Inc.)/(FirstMerit Bank, N.A. LOC) |
|
|
3,000,000 |
|
|
4,340,000 |
|
Summit County, OH IDR, (Series 1994) Weekly VRDNs (Harry London Candies, Inc.)/(KeyBank, N.A. LOC) |
|
|
4,340,000 |
|
|
900,000 |
|
Summit County, OH IDR, (Series 1997) Weekly VRDNs (Baker McMillen Co.)/(National City Bank, Ohio LOC) |
|
|
900,000 |
|
|
2,730,000 |
|
Summit County, OH IDR, (Series 1997) Weekly VRDNs (Malco Products, Inc.)/(Bank One, Ohio, N.A. LOC) |
|
|
2,730,000 |
|
|
1,985,000 |
|
Summit County, OH IDR, (Series 1998( Weekly VRDNs (Waldonia Investment)/(KeyBank, N.A. LOC) |
|
|
1,985,000 |
|
|
5,925,000 |
|
Summit County, OH IDR, (Series 1999) Weekly VRDNs (Waltco Truck Equipment)/(Svenska Handelsbanken, Stockholm LOC) |
|
|
5,925,000 |
|
|
425,000 |
|
Summit County, OH IDR, 5.00% TOBs (Bechmer-Boyce Project)/ (KeyBank, N.A. LOC), Optional Tender 1/15/2001 |
|
|
425,000 |
|
|
610,000 |
|
Summit County, OH IDR, 4.85% TOBs (Universal Rack)/(National City Bank, Ohio LOC), Optional Tender 2/1/2001 |
|
|
610,000 |
|
|
1,125,000 |
|
Summit County, OH IDR, Adjustable Rate IDRBs, (Series 1996) Weekly VRDNs (Fomo Products, Inc.)/(FirstMerit Bank, N.A. LOC) |
|
|
1,125,000 |
|
|
538,000 |
|
Summit County, OH IDR, Bonds, (Series 1994) Weekly VRDNs (Austin Printing Co., Inc.)/(Bank One, N.A. (Ohio) LOC) |
|
|
538,000 |
|
|
1,795,000 |
|
Summit County, OH IDR, IDRB, (Series 1994B) Weekly VRDNs (Harry London Candies, Inc.)/(KeyBank, N.A. LOC) |
|
|
1,795,000 |
|
|
585,000 |
|
Summit County, OH IDR, IDRB, (Series 1995) Weekly VRDNs (Cardtech Project (OH))/(KeyBank, N.A. LOC) |
|
|
585,000 |
|
|
605,000 |
|
Summit County, OH IDR, Multi-Mode Variable Rate I Weekly VRDNs (Mastergraphics, Inc. Project)/(KeyBank, N.A. LOC) |
|
|
605,000 |
|
|
1,815,000 |
|
Summit County, OH IDR, Variable Rate IDRBs, (Series 1998A) Weekly VRDNs (Wintek Ltd.)/(FirstMerit Bank, N.A. LOC) |
|
|
1,815,000 |
|
|
4,000,000 |
|
Toledo-Lucas County, OH Port Authority, Airport Development Revenue Bonds, (Series 1996-1) Weekly VRDNs (Burlington Air Express, Inc.)/(ABN AMRO Bank N.V., Amsterdam LOC) |
|
|
4,000,000 |
|
|
1,000,000 |
|
Toledo-Lucas County, OH Port Authority, IDA Weekly VRDNs (Medusa Corp.)/(Bayerische Hypotheken-und Vereinsbank AG LOC) |
|
|
1,000,000 |
|
|
1,700,000 |
|
Trumbull County, OH IDA, (Series 1989) Weekly VRDNs (McSonald Steel Corp.)/(PNC Bank, N.A. LOC) |
|
|
1,700,000 |
|
Prinicipal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Ohio--continued |
|
|
|
|
$ |
1,200,000 |
|
Trumbull County, OH IDA, IDR Refunding Bonds, (Series 1994) Weekly VRDNs (Churchill Downs, Inc.)/(Bank One, N.A. (Ohio) LOC) |
|
$ |
1,200,000 |
|
|
1,315,000 |
|
Tuscarawas County, OH, Adjustable Rate IDRBs, (Series 1995) Weekly VRDNs (Primary Packaging, Inc.)/(FirstMerit Bank, N.A. LOC) |
|
|
1,315,000 |
|
|
2,190,000 |
|
Williams County, OH, Multi-Mode Variable Rate IDRBs (Series 1996) Weekly VRDNs (Allied Moulded Products, Inc.)/(KeyBank, N.A. LOC) |
|
|
2,190,000 |
|
|
930,000 |
|
Willoughby City, OH, IDR Refunding Bonds, (Series 1995A) Weekly VRDNs (Pine Ridge Shopping Center Company Project)/(Firstar Bank, N.A., Cincinnati LOC) |
|
|
930,000 |
|
|
975,000 |
|
Willoughby City, OH, IDR Revenue Bonds (Series 1995B) Weekly VRDNs (Pine Ridge Shopping Center Company Project)/(Firstar Bank, N.A. Cininnati LOC) |
|
|
975,000 |
|
|
600,000 |
|
Wood County, OH Weekly VRDNs (Principle Business Enterprises)/(National City Bank, Ohio LOC) |
|
|
600,000 |
|
|
1,835,000 |
|
Wood County, OH, EDRB Weekly VRDNs (Roe Inc. Project)/(Huntington National Bank, Columbus, OH LOC) |
|
|
1,835,000 |
|
|
875,000 |
|
Wood County, OH, Series 1998 Weekly VRDNs (IMCO Carbide Tool, Inc.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
875,000 |
|
|
960,000 |
|
Wood County, OH, Williams Industrial Service Inc., Project Weekly VRDNs (Williams Industrial Service, Inc.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
960,000 |
|
|
3,490,000 |
|
Youngstown, OH, (Series 1996A) Weekly VRDNs (Cantar/Polyair Corp./Performa Corp.)/(HSBC Bank USA LOC) |
|
|
3,490,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)2 |
|
$ |
278,623,417 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 68.4% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by NRSROs or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
99.8% |
|
0.2% |
2 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($281,706,427) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMT |
--Alternative Minimum Tax |
|
BANs |
--Bond Anticipation Notes |
|
COL |
--Collateralized |
|
CP |
--Commercial Paper |
|
EDRB |
--Economic Development Revenue Bonds |
|
FSA |
--Financial Security Assurance |
|
GNMA |
--Government National Mortgage Association |
|
HFA |
--Housing Finance Authority |
|
IDA |
--Industrial Development Authority |
|
IDR |
--Industrial Development Revenue |
|
IDRBs |
--Industrial Development Revenue Bond(s) |
|
INS |
--Insured |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
TOBs |
--Tender Option Bonds |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
278,623,417 |
|
Cash |
|
|
|
|
|
1,236,014 |
|
Income receivable |
|
|
|
|
|
2,188,314 |
|
Receivable for shares sold |
|
|
|
|
|
422,440 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
282,470,185 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Income distribution payable |
|
$ |
688,263 |
|
|
|
|
Accrued expenses |
|
|
75,495 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
763,758 |
|
|
||||||
|
Net assets for 281,706,427 shares outstanding |
|
|
|
|
$ |
281,706,427 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
$94,388,263 ÷ 94,388,263 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Institutional Service Shares: |
|
|
|
|
|
|
|
$122,293,795 ÷ 122,293,795 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Cash II Shares: |
|
|
|
|
|
|
|
$65,024,369 ÷ 65,024,369 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
11,745,884 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
1,126,048 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
212,008 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
16,617 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
24,991 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
2,770 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,677 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
34,244 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
89,372 |
|
|
|
|
|
Distribution services fee--Cash II Shares |
|
|
|
|
|
|
216,852 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
265,732 |
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
257,338 |
|
|
|
|
|
Shareholder services fee--Cash II Shares |
|
|
|
|
|
|
180,710 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
44,900 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
22,871 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
14,048 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
1,365 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
2,521,543 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(342,310 |
) |
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Cash II Shares |
|
|
(36,142 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(265,732 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(51,468 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(695,652 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
1,825,891 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
9,919,993 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
9,919,993 |
|
|
$ |
10,226,317 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(3,924,832 |
) |
|
|
(4,019,703 |
) |
|
Institutional Service Shares |
|
|
(3,674,842 |
) |
|
|
(2,810,726 |
) |
|
Cash II Shares |
|
|
(2,320,319 |
) |
|
|
(3,395,888 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(9,919,993 |
) |
|
|
(10,226,317 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
1,305,244,506 |
|
|
|
1,437,132,752 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
3,165,192 |
|
|
|
3,824,029 |
|
|
Cost of shares redeemed |
|
|
(1,342,468,426 |
) |
|
|
(1,694,429,001 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(34,058,728 |
) |
|
|
(253,472,220 |
) |
|
|
||||||||
|
Change in net assets |
|
|
(34,058,728 |
) |
|
|
(253,472,220 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
315,765,155 |
|
|
|
569,237,375 |
|
|
|
||||||||
|
End of period |
|
$ |
281,706,427 |
|
|
$ |
315,765,155 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Money Market Obligations Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of Ohio Municipal Cash Trust (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers three classes of shares: Institutional Shares, Institutional Service Shares and Cash II Shares. The investment objective of the Fund is to provide current income exempt from federal regular income tax and the personal income taxes imposed by the State of Ohio and Ohio municipalities consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees ("Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At October 31, 2000, capital paid-in aggregated $281,706,427.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
781,192,196 |
|
|
733,607,559 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
300,704 |
|
|
166,650 |
|
|
Shares redeemed |
|
(794,978,994 |
) |
|
(757,294,785 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
(13,486,094 |
) |
|
(23,520,576 |
) |
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
Shares sold |
|
286,893,901 |
|
|
253,460,934 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
606,528 |
|
|
667,036 |
|
|
Shares redeemed |
|
(255,501,208 |
) |
|
(258,729,340 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
31,999,221 |
|
|
(4,601,370 |
) |
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Cash II Shares: |
|
|
|
|
|
|
|
Shares sold |
|
237,158,409 |
|
|
450,064,259 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
2,257,960 |
|
|
2,990,343 |
|
|
Shares redeemed |
|
(291,988,224 |
) |
|
(678,404,876 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM CASH II SHARE TRANSACTIONS |
|
(52,571,855 |
) |
|
(225,350,274 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(34,058,728 |
) |
|
(253,472,220 |
) |
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment Adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federate Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Cash II Shares. The Plan provides that the Fund may incur distribution expenses up to 0.30% of the average daily net assets of Cash II Shares, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $528,272,532 and $583,171,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 68.6% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 11.5% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Ohio Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Ohio Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
Statement of Additional Information (SAI) dated December 31, 2000 is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as they become available. To obtain the SAI, the Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Ohio Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N393
G00211-02-SS (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and the personal income taxes imposed by the Commonwealth of Pennsylvania consistent with stability of principal by investing in a portfolio of short-term, high-quality Pennsylvania tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 8
How to Redeem Shares 9
Account and Share Information 12
Who Manages the Fund? 13
Financial Information 13
Report of Ernst & Young LLP, Independent Auditors 29
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and the personal income taxes imposed by the Commonwealth of Pennsylvania 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.
The Fund invests in short-term, high-quality Pennsylvania tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Pennsylvania dividend and interest income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Cash Series Shares total returns on a calendar year-end basis.
The Fund's Shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.36%.
Within the periods shown in the Chart, the Fund's Cash Series Shares highest quarterly return was 1.14% (quarter ended March 31, 1991). Its lowest quarterly return was 0.37% (quarter ended March 31, 1994).
The following table represents the Fund's Cash Series Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.39% |
|
5 Years |
|
2.72% |
|
Start of Performance1 |
|
2.66% |
1 The Fund's Cash Series Shares start of performance date was December 31, 1990.
The Fund's Cash Series Shares 7-Day Net Yield as of December 31, 1999 was 3.63%.
You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Cash Series Shares of the Fund.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions)
|
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.50% |
|
Distribution (12b-1) Fee3 |
|
0.40% |
|
Shareholder Services Fee |
|
0.25% |
|
Other Expenses |
|
0.15% |
|
Total Annual Fund Operating Expenses |
|
1.30% |
|
1 Although not contractually obligated to do so, the adviser and distributor waived certain amounts during the fiscal year ended October 31, 2000. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waivers of Fund Expenses |
|
0.25% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
1.05% |
|
2 The adviser voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.30% for the fiscal year ended October 31, 2000. |
||
|
3 The distributor voluntarily waived a portion of the distribution (12b-1) fee for the Cash Series Shares. The distributor can terminate this voluntary waiver at any time. The distribution (12b-1) fee paid by the Fund's Cash Series Shares (after the voluntary waiver) was 0.35% for the fiscal year ended October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Cash Series Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Cash Series Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's Cash Series Shares operating expenses are before waivers as shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
|
$ |
132 |
|
|
|||
|
3 Years |
|
$ |
412 |
|
|
|||
|
5 Years |
|
$ |
713 |
|
|
|||
|
10 Years |
|
$ |
1,568 |
|
|
|||
The Fund invests in a portfolio of high-quality Pennsylvania tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Pennsylvania dividend and interest income tax. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors, such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal income tax and Pennsylvania dividend and interest income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. Fixed income securities pay interest, dividends or distributions at a specified rate. The rate may be a fixed percentage of the principal or adjusted periodically. In addition, the issuer must repay the principal amount of the security, normally within a specified time.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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 prices 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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Pennsylvania issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Pennsylvania, the Fund may be subject to additional risks compared to funds that invest in multiple states. Pennsylvania's economy has diversified away from the concentration in heavy industry and manufacturing which existed prior to the downsizing of the steel industry. In addition, it has improved its mixture of service and technology based businesses. Despite the improvements in its employment base, Pennsylvania is still subject to the cyclical impact which an economic downturn has on the manufacturing sector.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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. When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. NAV is determined at 12:00 noon (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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
The Fund offers three share classes: Cash Series Shares, Institutional Shares and Institutional Service Shares, each representing interests in a single portfolio of securities. This prospectus relates only to Cash Series Shares. Each share class has different expenses, which affect their performance. Contact your investment professional or call 1-800-341-7400 for more information concerning the other classes.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to retail customers of financial institutions, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Pennsylvania taxpayers because it invests in Pennsylvania municipal securities.
The Fund has adopted a Rule 12b-1 Plan, which allows it to pay marketing fees to the Distributor and investment professionals for the sale, distribution and customer servicing of the Fund's Cash Series 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.
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400 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).
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Pennsylvania taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 29.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.03 |
|
|
0.02 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.03 |
) |
|
(0.02 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.15 |
% |
|
2.32 |
% |
|
2.74 |
% |
|
2.77 |
% |
|
2.75 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
1.05 |
% |
|
1.05 |
% |
|
1.05 |
% |
|
1.05 |
% |
|
1.05 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.12 |
% |
|
2.28 |
% |
|
2.70 |
% |
|
2.72 |
% |
|
2.72 |
% |
|
|
|||||||||||||||
|
Expense waiver3 |
|
0.25 |
% |
|
0.25 |
% |
|
0.26 |
% |
|
0.27 |
% |
|
0.27 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$54,142 |
|
|
$43,292 |
|
|
$47,940 |
|
|
$23,777 |
|
|
$19,825 |
|
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--99.4%1 |
|
|
|
|
|
|
|
Pennsylvania--99.4% |
|
|
|
|
$ |
3,370,000 |
|
Adams County, PA IDA, (Series 1999C), Weekly VRDNs (Martin Limestone, Inc.)/(Allfirst LOC) |
|
$ |
3,370,000 |
|
|
6,910,000 |
|
Adams County, PA IDA, (Series 1999A), Weekly VRDNs (Valley Quarries, Inc.)/(Allfirst LOC) |
|
|
6,910,000 |
|
|
2,395,000 |
|
Adams County, PA IDA, (Series 1999B), Weekly VRDNs (Valley Quarries, Inc.)/(Allfirst LOC) |
|
|
2,395,000 |
|
|
7,600,000 |
|
Adams County, PA IDA, (Series 2000), Weekly VRDNs (Genlyte Thomas Group LLC)/(Bank of America, N.A. LOC) |
|
|
7,600,000 |
|
|
8,000,000 |
|
Allegheny County, PA HDA, Variable Rate Demand Hospital Revenue Bonds (Series 1998B), 4.30% TOBs (South Hills Health System)/(PNC Bank, N.A. LOC), Mandatory Tender 4/1/2001 |
|
|
8,000,000 |
|
|
2,775,000 |
|
Allegheny County, PA IDA, Variable Rate Demand Revenue Bonds (Series 1997A), Weekly VRDNs (Jewish Community Center)/(National City Bank, Pennsylvania LOC) |
|
|
2,775,000 |
|
|
940,000 |
|
Berks County, PA IDA, Weekly VRDNs (ADC Quaker Maid Meats)/(First Union National Bank, Charlotte, NC LOC) |
|
|
940,000 |
|
|
1,125,000 |
|
Berks County, PA IDA, (Series 1988), Weekly VRDNs (Arrow Electronics, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,125,000 |
|
|
5,200,000 |
|
Berks County, PA IDA, (Series 1998), Weekly VRDNs (Eastern Industries, Inc.)/(Dauphin Deposit Bank and Trust LOC) |
|
|
5,200,000 |
|
|
2,970,000 |
|
Berks County, PA IDA, Manufacturing Facilities Revenue Bonds (Series 1996), Weekly VRDNs (Ram Industries, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,970,000 |
|
|
1,290,000 |
|
Berks County, PA IDA, Manufacturing Facilities Revenue Bonds (Series 1995), Weekly VRDNs (Grafika Commercial Printing, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,290,000 |
|
|
635,000 |
|
Berks County, PA IDA, Revenue Bonds (Series 1995A/Subseries B), Weekly VRDNs (First Union National Bank, Charlotte, NC LOC) |
|
|
635,000 |
|
|
2,000,000 |
|
Bethel Park, PA, 4.375% TRANs, 12/29/2000 |
|
|
2,000,533 |
|
|
2,250,000 |
|
Boyertown, PA Area School District (Series 1999/00), 5.30% TRANs, 6/29/2001 |
|
|
2,257,055 |
|
|
760,000 |
|
Bucks County, PA IDA, Weekly VRDNs (Double H Plastics, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
760,000 |
|
|
2,250,000 |
|
Bucks County, PA IDA, Weekly VRDNs (Pennsylvania Associates)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,250,000 |
|
|
2,270,000 |
|
Bucks County, PA IDA (Series 1991), Weekly VRDNs (Cabot Medical Corp.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,270,000 |
|
|
1,200,000 |
|
Butler County, PA IDA (Series 1996 A), Weekly VRDNs (Armco, Inc.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
1,200,000 |
|
|
1,695,000 |
|
Butler County, PA IDA (Series 1998), Weekly VRDNs (Allegheny Metalworking Corp.)/(National City, Pennsylvania LOC) |
|
|
1,695,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Pennsylvania--continued |
|
|
|
|
$ |
4,000,000 |
|
Butler County, PA IDA (Series 2000B), 5.00% TOBs (Concordia Lutheran Ministries)/(Asset Guaranty INS)/(Fleet National Bank, Springfield, MA LIQ), Mandatory Tender 8/1/2001 |
|
$ |
4,017,181 |
|
|
8,500,000 |
|
Butler County, PA IDA, 5.00% TOBs (Concordia Lutheran Ministries)/(Asset Guaranty INS)/(Fleet Bank N.A. LIQ), Mandatory Tender 10/1/2001 |
|
|
8,543,467 |
|
|
2,135,000 |
|
Butler County, PA IDA, IDRB (Series 1994), Weekly VRDNs (Lue-Rich Holding Co., Inc. Project)/(ABN AMRO Bank N.V., Amsterdam LOC) |
|
|
2,135,000 |
|
|
900,000 |
|
Carbon County, PA IDA, Weekly VRDNs (Summit Management & Utilities, Inc.)/(PNC Bank, N.A. LOC) |
|
|
900,000 |
|
|
10,700,000 |
|
Carbon County, PA IDA (Series 1999), 4.25% RANs (Horsehead Resource Development, Inc.)/(Chase Manhattan Bank N.A., New York LOC), 12/1/2000 |
|
|
10,700,000 |
|
|
2,800,000 |
|
Chartiers Valley, PA Industrial & Commercial Development Authority, Nursing Home Revenue Refunding Bonds (Series 1997A), Weekly VRDNs (Woodhaven Convalescent Center)/(Bank One, Ohio, N.A. LOC) |
|
|
2,800,000 |
|
|
4,335,000 |
|
Chester County, PA IDA (Series 2000A), Weekly VRDNs (Innovative Solutions and Support LLC)/(PNC Bank, N.A. LOC) |
|
|
4,335,000 |
|
|
6,200,000 |
|
Chester County, PA IDA (Series 2000A), Weekly VRDNs (Devault Packing Co., Inc.)/(Summit Bank, NJ LOC) |
|
|
6,200,000 |
|
|
10,200,000 |
|
Chester County, PA, 4.195%, TRANs, 12/15/2000 |
|
|
10,200,169 |
|
|
7,300,000 |
|
Clearfield County, PA IDA, Weekly VRDNs (Penn Traffic Co.)/(Fleet Bank N.A. LOC) |
|
|
7,300,000 |
|
|
4,500,000 |
|
Clinton County, PA IDA (Series 1992A), 4.70%, TOBs (International Paper Co.), Optional Tender 1/15/2001 |
|
|
4,500,000 |
|
|
900,000 |
|
Cumberland County, PA IDA, Industrial Development Bonds (Series 1994), Weekly VRDNs (Lane Enterprises, Inc. Project)/(First Union National Bank, Charlotte, NC LOC) |
|
|
900,000 |
|
|
5,000,000 |
|
Cumberland County, PA Municipal Authority, (Series 1994), 4.90% TOBs (United Methodist Homes for the Aging)/(PNC Bank, N.A. LOC), Mandatory Tender 6/1/2001 |
|
|
5,000,000 |
|
|
5,000,000 |
|
Dauphin County, PA IDA (Series 2000), Weekly VRDNs (Consolidated Scrap Resources, Inc.)/(Allfirst LOC) |
|
|
5,000,000 |
|
|
3,000,000 |
|
Dauphin County, PA IDA, Variable Rate EDRBs (Series 1998-B) Weekly VRDNs (Key Ingredients, Inc.)/(Citibank N.A., New York LOC) |
|
|
3,000,000 |
|
|
400,000 |
|
Delaware County, PA Authority, Hospital Revenue Bonds (Series 1996), Weekly VRDNs (Crozer-Chester Medical Center)/(KBC Bank N.V. LOC) |
|
|
400,000 |
|
|
2,500,000 |
|
Downington Area School District, PA, 5.10% TRANs, 6/29/2001 |
|
|
2,504,696 |
|
|
500,000 |
|
East Hempfield Township, PA IDA (Series 1985), Weekly VRDNs (Yellow Freight System)/(Wachovia Bank of NC, N.A. LOC) |
|
|
500,000 |
|
|
600,000 |
|
East Hempfield Township, PA IDA (Series 1997), Weekly VRDNs (Mennonite Home)/(Dauphin Deposit Bank and Trust LOC) |
|
|
600,000 |
|
|
200,000 |
|
Erie County, PA Hospital Authority, Weekly VRDNs (St. Mary's Hospital Erie, PA)/(PNC Bank, N.A. LOC) |
|
|
200,000 |
|
|
20,000,000 |
|
Erie County, PA Hospital Authority Weekly VRDNs (St. Vincent Health System)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
20,000,000 |
|
|
8,500,000 |
|
Erie County, PA, 4.50% TRANs, 12/15/2000 |
|
|
8,504,430 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Pennsylvania--continued |
|
|
|
|
$ |
2,900,000 |
|
Franconia Township, PA IDA, IDRBs (Series 1997A), Weekly VRDNs (Asher's Chocolates)/(Mellon Bank N.A., Pittsburgh LOC) |
|
$ |
2,900,000 |
|
|
1,140,000 |
|
Franklin County, PA IDA Weekly VRDNs (The Guarriello LP)/(PNC Bank, N.A. LOC) |
|
|
1,140,000 |
|
|
2,290,000 |
|
Gettysburg Area, IDA (Series 1998A), Weekly VRDNs (Hanover Lantern, Inc.)/(Allfirst LOC) |
|
|
2,290,000 |
|
|
1,900,000 |
|
Greene County, PA IDA (Series 1999), Weekly VRDNs (CWS Co., Inc.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
1,900,000 |
|
|
2,255,000 |
|
Jackson Township, PA IDA (Series 1999A), Weekly VRDNs (Aerial Innovations, Inc.)/(Allfirst LOC) |
|
|
2,255,000 |
|
|
3,285,000 |
|
Lancaster, PA IDA (Series 1988C), Weekly VRDNs (Henry Molded Products, Inc.)/(Dauphin Deposit Bank and Trust LOC) |
|
|
3,285,000 |
|
|
2,095,000 |
|
Lancaster, PA IDA (Series 1998A),Weekly VRDNs (Henry Molded Products, Inc.)/(Dauphin Deposit Bank and Trust LOC) |
|
|
2,095,000 |
|
|
3,000,000 |
|
Lebanon County, PA Health Facilities Authority, (Series 1999), Weekly VRDNs (United Church of Christ Homes, Inc.)/(Allfirst LOC) |
|
|
3,000,000 |
|
|
5,575,000 |
|
Lehigh County, PA IDA (Series of 2000), Weekly VRDNs (P. R. E. USA, Inc./Suntuf 2000, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
5,575,000 |
|
|
1,000,000 |
|
Lehigh County, PA IDA, Variable Rate Demand Revenue Bonds, (Series 1997), Weekly VRDNs (American Manufacturing Co., Inc.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
1,000,000 |
|
|
6,120,000 |
|
McKean County, PA IDA (Series 1997), Weekly VRDNs (Keystone Powdered Metal Co.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
6,120,000 |
|
|
3,300,000 |
|
Monroe County, PA IDA, PCR, Weekly VRDNs (Cooper Industries, Inc.) |
|
|
3,300,000 |
|
|
600,000 |
|
Montgomery County, PA IDA, (Series 1992), Weekly VRDNs (RJI LP)/(First Union National Bank, Charlotte, NC LOC) |
|
|
600,000 |
|
|
16,000,000 |
|
Montgomery County, PA IDA (Series 2000), Weekly VRDNs (Lonza, Inc.)/(Deutsche Bank AG LOC) |
|
|
16,000,000 |
|
|
1,000,000 |
|
Montgomery County, PA IDA (Series A), Weekly VRDNs (Vari Corp.)/(Dauphin Deposit Bank and Trust LOC) |
|
|
1,000,000 |
|
|
4,250,000 |
|
Montgomery County, PA IDA (Series C), Weekly VRDNs (Vari Corp.)/(Dauphin Deposit Bank and Trust LOC) |
|
|
4,250,000 |
|
|
1,810,000 |
|
Montgomery County, PA IDA EDRB's (Series 1997), Weekly VRDNs (Palmer International, Inc.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
1,810,000 |
|
|
4,470,000 |
|
Moon Township, PA IDA, Weekly VRDNs (Airport Hotel Associates)/(National City Bank, Pennsylvania LOC) |
|
|
4,470,000 |
|
|
30,000 |
|
Moon Township, PA IDA (Series 1995A), Weekly VRDNs (One Thorn Run Center)/(National City Bank, Pennsylvania LOC) |
|
|
30,000 |
|
|
9,000,000 |
|
North Penn Health, Hospital and Education Authority, PA, Hospital Revenue Bonds (Series 1998), Weekly VRDNs (North Penn Hospital, PA)/(First Union National Bank, Charlotte, NC LOC) |
|
|
9,000,000 |
|
|
13,950,000 |
|
Northampton County, PA IDA, 4.85% CP (Citizens Utilities Co.), Mandatory Tender 11/6/2000 |
|
|
13,950,000 |
|
|
2,207,000 |
|
Northampton County, PA IDA, Variable Rate Revenue Bonds (Series 1997), Weekly VRDNs (Ultra-Poly Corp.)/(PNC Bank, N.A. LOC) |
|
|
2,207,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Pennsylvania--continued |
|
|
|
|
$ |
1,884,000 |
|
Northeast Bradford School District, PA, 5.39% TRANs, 6/29/2001 |
|
$ |
1,888,597 |
|
|
1,590,000 |
|
Northumberland County PA IDA, Revenue Bonds (Series 1995A), Weekly VRDNs (Furman Farms, Inc. Project)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,590,000 |
|
|
1,450,000 |
|
Pennsylvania EDFA Weekly VRDNs (Cyrogenics, Inc.)/(PNC Bank, N.A. LOC) |
|
|
1,450,000 |
|
|
2,100,000 |
|
Pennsylvania EDFA Weekly VRDNs (Industrial Scientific Corp.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
2,100,000 |
|
|
375,000 |
|
Pennsylvania EDFA Weekly VRDNs (ProMinent Fluid)/(PNC Bank, N.A. LOC) |
|
|
375,000 |
|
|
300,000 |
|
Pennsylvania EDFA Weekly VRDNs (RMF Associates)/(PNC Bank, N.A. LOC) |
|
|
300,000 |
|
|
875,000 |
|
Pennsylvania EDFA Weekly VRDNs (Stone and Lime Co.)/(PNC Bank, N.A. LOC) |
|
|
875,000 |
|
|
1,300,000 |
|
Pennsylvania EDFA (Series 1995-D2), Weekly VRDNs (ARCO Enterprises, Inc./Ronald L. Repasky, Sr. Project)/(PNC Bank, N.A. LOC) |
|
|
1,300,000 |
|
|
300,000 |
|
Pennsylvania EDFA (Series 1995-D9), Weekly VRDNs (North American Communications, Inc. Project)/(PNC Bank, N.A. LOC) |
|
|
300,000 |
|
|
918,800 |
|
Pennsylvania EDFA (Series 1992-C), Weekly VRDNs (Leonard H. Berenfield/Berenfield Containers)/(PNC Bank, N.A. LOC) |
|
|
918,800 |
|
|
1,900,000 |
|
Pennsylvania EDFA (Series 1996-E), Weekly VRDNs (Adelphoi, Inc.)/(PNC Bank, N.A. LOC) |
|
|
1,900,000 |
|
|
3,000,000 |
|
Pennsylvania EDFA (Series 1998-A), Weekly VRDNs (Fourth Generation Realty LLC)/(PNC Bank, N.A. LOC) |
|
|
3,000,000 |
|
|
2,200,000 |
|
Pennsylvania EDFA (Series B1), Weekly VRDNs (Erie Plating Co.)/(PNC Bank, N.A. LOC) |
|
|
2,200,000 |
|
|
2,900,000 |
|
Pennsylvania EDFA, EDRBs (Series 1996-D6), Weekly VRDNs (Toyo Tanso Specialty Materials, Inc.)/(PNC Bank, N.A. LOC) |
|
|
2,900,000 |
|
|
3,890,000 |
|
Pennsylvania EDFA, EDRBs (Series 1996C), Weekly VRDNs (Napco, Inc. Project)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
3,890,000 |
|
|
13,545,000 |
2 |
Pennsylvania HFA (Series 1997-58A), (PT-149), 4.40% TOBs (Commerzbank AG, Frankfurt LIQ), Optional Tender 10/11/2001 |
|
|
13,545,000 |
|
|
14,310,000 |
|
Pennsylvania HFA, MERLOTS (Series 1997K), Weekly VRDNs (First Union National Bank, Charlotte, NC LIQ) |
|
|
14,310,000 |
|
|
1,285,000 |
|
Pennsylvania HFA, (PT-119B), Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) |
|
|
1,285,000 |
|
|
865,000 |
|
Pennsylvania HFA, Section 8 Assisted Residential Development Refunding Bonds (Series 1992A), Weekly VRDNs (FSA INS)/(Citibank N.A., New York LIQ) |
|
|
865,000 |
|
|
12,100,000 |
|
Pennsylvania HFA, Variable Rate Certificates (Series 1999-65A) Weekly VRDNs (Bank of America, N.A. LIQ) |
|
|
12,100,000 |
|
|
1,000,000 |
|
Pennsylvania Intergovernmental Coop Authority, (PT-339), Weekly VRDNs (Philadelphia, PA)/(United States Treasury COL)/(Bayerische Hypotheken-und Vereinsbank AG LIQ) |
|
|
1,000,000 |
|
|
950,000 |
|
Pennsylvania Intergovernmental Coop Authority, 6.00% Bonds (FGIC INS), 6/15/2001 |
|
|
959,641 |
|
|
11,500,000 |
|
Pennsylvania State Higher Education Assistance Agency, Student Loan Adjustable Rate Revenue Bonds (Series 1997A), Weekly VRDNs (SLMA LOC) |
|
|
11,500,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Pennsylvania--continued |
|
|
|
|
$ |
2,635,000 |
|
Pennsylvania State Higher Education Facilities Authority, (Series 2000A), 4.75% RANs (Geneva College)/(Allied Irish Banks PLC LOC), 8/15/2001 |
|
$ |
2,642,974 |
|
|
5,600,000 |
|
Pennsylvania State Higher Education Facilities Authority, (Series B2), 3.80% TOBs (Carlow College)/(PNC Bank, N.A. LOC), Mandatory Tender 11/1/2000 |
|
|
5,600,000 |
|
|
1,430,000 |
|
Pennsylvania State Higher Education Facilities Authority, (Series O), 5.00% Bonds (AMBAC INS), 6/15/2001 |
|
|
1,436,052 |
|
|
4,500,000 |
|
Pennsylvania State Higher Education Facilities Authority, Revenue Bonds (Series 1997-B4), 3.80% TOBs (Kings College, PA)/(PNC Bank, N.A. LOC), Mandatory Tender 11/1/2000 |
|
|
4,500,000 |
|
|
2,125,000 |
|
Perkiomen Valley School District, PA, 5.30% TRANs, 6/29/2001 |
|
|
2,130,327 |
|
|
4,350,000 |
2 |
Philadelphia, PA IDA, 4.55% TOBs (Philadelphia Airport System)/(FGIC INS)/(Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 6/14/2001 |
|
|
4,350,000 |
|
|
10,000,000 |
|
Philadelphia, PA Water & Sewer, Lehman Trust Receipts, (Series 2000 FR/RI-N4), Weekly VRDNs (United States Treasury COL)/(Bank of New York LIQ) |
|
|
10,000,000 |
|
|
10,000,000 |
|
Philadelphia, PA, (Series A), 5.00% TRANs, 6/29/2001 |
|
|
10,036,686 |
|
|
2,500,000 |
|
Red Lion, PA Area School District, 5.30% TRANs, 6/29/2001 |
|
|
2,506,267 |
|
|
9,850,000 |
|
Schuylkill County, PA IDA, (Series 2000), Weekly VRDNs (Fabcon East Corp. LLC)/(Wells Fargo Bank Minnesota N.A. LOC) |
|
|
9,850,000 |
|
|
3,800,000 |
|
Venango, PA IDA (Series A), 4.40% CP (Scrubgrass Power Corp.)/(National Westminster Bank PLC LOC), Mandatory Tender 11/10/2000 |
|
|
3,800,000 |
|
|
3,000,000 |
|
Venango, PA IDA, Resource Recovery Bonds (Series 1993), 4.40% CP (Scrubgrass Power Corp.)/(National Westminster Bank PLC LOC), Mandatory Tender 11/10/2000 |
|
|
3,000,000 |
|
|
10,700,000 |
|
Washington County, PA IDA, Solid Waste Disposal Revenue Bonds (Series 1995), Weekly VRDNs (American Iron Oxide Co. Project)/(Bank of Tokyo-Mitsubishi Ltd. LOC) |
|
|
10,700,000 |
|
|
730,000 |
|
West Cornwall Township, PA Municipal Authority, Revenue Bonds (Series 1995), Weekly VRDNs (Lebanon Valley Brethern Home Project (PA)/(First Union National Bank, Charlotte, NC LOC) |
|
|
730,000 |
|
|
3,300,000 |
|
York County, PA IDA (Series 2000A), Weekly VRDNs (UL Holdings)/(Allfirst LOC) |
|
|
3,300,000 |
|
|
1,650,000 |
|
York County, PA IDA (Series of 2000), Weekly VRDNs (Fypon Ltd.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
1,650,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Pennsylvania--continued |
|
|
|
|
$ |
2,500,000 |
|
York County, PA IDA, Limited Obligation Revenue Bonds (Series 1997), Weekly VRDNs (Metal Exchange Corp.)/(Comerica Bank LOC) |
|
$ |
2,500,000 |
|
|
2,750,000 |
|
York County, PA IDA, Variable Rate Demand Limited Obligation Revenue Bonds (Series 1996), Weekly VRDNs (Metal Exchange Corp.)/(Comerica Bank LOC) |
|
|
2,750,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
|
$ |
414,093,875 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 63.2% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 and F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
95.09% |
|
4.91% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $17,895,000, which represents 4.3% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($416,691,830) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
COL |
--Collateralized |
|
CP |
--Commercial Paper |
|
EDFA |
--Economic Development Financing Authority |
|
EDRB |
--Economic Development Revenue Bonds |
|
FGIC |
--Financial Guaranty Insurance Company |
|
FSA |
--Financial Security Assurance |
|
HDA |
--Hospital Development Authority |
|
HFA |
--Housing Finance Authority |
|
IDA |
--Industrial Development Authority |
|
IDRB(s) |
--Industrial Development Revenue Bond(s) |
|
INS |
--Insured |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
PCR |
--Pollution Control Revenue |
|
PRF |
--Refunded |
|
RANs |
--Revenue Anticipation Notes |
|
SLMA |
--Student Loan Marketing Association |
|
TOBs |
--Tender Option Bonds |
|
TRANs |
--Tax and Revenue Anticipation Notes |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
414,093,875 |
|
Cash |
|
|
|
|
|
24,959 |
|
Income receivable |
|
|
|
|
|
3,806,445 |
|
Receivable for shares sold |
|
|
|
|
|
26,974 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
417,952,253 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
209,855 |
|
|
|
|
Income distribution payable |
|
|
987,522 |
|
|
|
|
Accrued expenses |
|
|
63,046 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
1,260,423 |
|
|
||||||
|
Net assets for 416,691,830 shares outstanding |
|
|
|
|
$ |
416,691,830 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
$114,179,689 ÷ 114,179,689 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Institutional Service Shares: |
|
|
|
|
|
|
|
$248,369,957 ÷ 248,369,957 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Cash Series Shares: |
|
|
|
|
|
|
|
$54,142,184 ÷ 54,142,184 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
19,462,678 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
2,355,670 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
354,808 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
25,742 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
122,639 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
3,769 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,156 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
13,024 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
109,042 |
|
|
|
|
|
Distribution services fee--Cash Series Shares |
|
|
|
|
|
|
200,679 |
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
728,403 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
324,007 |
|
|
|
|
|
Shareholder services fee--Cash Series Shares |
|
|
|
|
|
|
125,424 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
38,635 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
28,098 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
27,608 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
3,525 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
4,472,229 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(952,882 |
) |
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Cash Series Shares |
|
|
(25,085 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(324,007 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(145,681 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(1,447,655 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
3,024,574 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
16,438,104 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
||
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
16,438,104 |
|
|
$ |
12,564,568 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(4,760,149 |
) |
|
|
(3,050,817 |
) |
|
Institutional Service Shares |
|
|
(10,114,058 |
) |
|
|
(8,398,776 |
) |
|
Cash Series Shares |
|
|
(1,563,897 |
) |
|
|
(1,114,975 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(16,438,104 |
) |
|
|
(12,564,568 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
1,594,556,969 |
|
|
|
1,619,949,097 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
4,751,497 |
|
|
|
3,820,422 |
|
|
Cost of shares redeemed |
|
|
(1,614,279,079 |
) |
|
|
(1,696,708,970 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(14,970,613 |
) |
|
|
(72,939,451 |
) |
|
|
||||||||
|
Change in net assets |
|
|
(14,970,613 |
) |
|
|
(72,939,451 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
431,662,443 |
|
|
|
504,601,894 |
|
|
|
||||||||
|
End of period |
|
$ |
416,691,830 |
|
|
$ |
431,662,443 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Money Market Obligations Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of Pennsylvania Municipal Cash Trust (the "Fund") a non-diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers three classes of shares: Institutional Service Shares, Cash Series Shares and Institutional Shares. The investment objective of the Fund is current income exempt from federal income tax and the personal income taxes imposed by the Commonwealth of Pennsylvania consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
At October 31, 2000, the Fund for federal tax purposes, had a capital loss carryforward of $1,534, which will reduce the Fund's taxable income arising from the future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for Federal tax. Pursuant to the code, such capital loss carryforward will expire as follows:
|
Expiration Year |
|
Expiration Amount |
|
2001 |
|
$ 64 |
|
|
||
|
2005 |
|
$1,470 |
|
|
||
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees ("Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At October 31, 2000, capital paid-in aggregated $416,691,830.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
507,943,703 |
|
|
590,890,826 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
1,703,868 |
|
|
1,069,331 |
|
|
Shares redeemed |
|
(530,499,834 |
) |
|
(521,209,277 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
(20,852,263 |
) |
|
70,750,880 |
|
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
Shares sold |
|
910,504,908 |
|
|
886,863,203 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
1,558,214 |
|
|
1,700,459 |
|
|
Shares redeemed |
|
(917,031,927 |
) |
|
(1,027,605,705 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
(4,968,805 |
) |
|
(139,042,043 |
) |
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Cash Series Shares: |
|
|
|
|
|
|
|
Shares sold |
|
176,108,358 |
|
|
142,195,068 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
1,489,415 |
|
|
1,050,632 |
|
|
Shares redeemed |
|
(166,747,318 |
) |
|
(147,893,988 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM CASH SERIES SHARE TRANSACTIONS |
|
10,850,455 |
|
|
(4,648,288 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(14,970,613 |
) |
|
(72,939,451 |
) |
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Funds with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Cash Series Shares. The Plan provides that the Fund may incur distribution expenses up to 0.40% of the average daily net assets of the Cash Series Shares, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $756,135,000 and $833,775,000 respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 67.1% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 11.0% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Pennsylvania Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Pennsylvania Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as they become available. To obtain the SAI, Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Pennsylvania Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N526
9101005 A-CS (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from regular income tax and the personal income taxes imposed by the Commonwealth of Pennsylvania consistent with stability of principal by investing in a portfolio of short-term, high-quality Pennsylvania tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 8
How to Redeem Shares 9
Account and Share Information 12
Who Manages the Fund? 13
Financial Information 13
Report of Ernst & Young LLP, Independent Auditors 29
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and the personal income taxes imposed by the Commonwealth of Pennsylvania 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.
The Fund invests in short-term, high-quality Pennsylvania tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Pennsylvania dividend and interest income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Shares total returns on a calendar year-end basis.
The Fund's Shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.82%.
Within the periods shown in the Chart, the Fund's Institutional Shares highest quarterly return was 0.89% (quarter ended June 30, 1997). Its lowest quarterly return was 0.66% (quarter ended March 31, 1999).
The following table represents the Fund's Institutional Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
3.01% |
|
Start of Performance1 |
|
3.29% |
1 The Fund's Institutional Shares start of performance date was July 19, 1995.
The Fund's Institutional Shares 7-Day Net Yield as of December 31, 1999 was 4.23%. You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the Fund.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions)
|
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.50% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee3 |
|
0.25% |
|
Other Expenses |
|
0.15% |
|
Total Annual Fund Operating Expenses |
|
0.90% |
|
1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts during the fiscal year ending October 31, 2000. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waivers of Fund Expenses |
|
0.45% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.45% |
|
2 The adviser voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.30% for the fiscal year ended October 31, 2000. |
||
|
3 The shareholder services provider voluntarily waived the shareholder services fee. The shareholder services provider can terminate this voluntary waiver at any time. The shareholder services fee paid by the Fund (after the voluntary waiver) was 0.00% for the fiscal year ended October 31, 2000. |
||
This 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 shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
|
$ |
92 |
|
|
|||
|
3 Years |
|
$ |
287 |
|
|
|||
|
5 Years |
|
$ |
498 |
|
|
|||
|
10 Years |
|
$ |
1,108 |
|
|
|||
The Fund invests in a portfolio of high-quality Pennsylvania tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Pennsylvania dividend and interest income tax. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal income tax and Pennsylvania dividend and interest income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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 prices 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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Pennsylvania issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Pennsylvania, the Fund may be subject to additional risks compared to funds that invest in multiple states. Pennsylvania's economy has diversified away from the concentration in heavy industry and manufacturing which existed prior to the downsizing of the steel industry; in addition, it has improved its mixture of service and technology based businesses. Despite the improvements in its employment base, Pennsylvania is still subject to the cyclical impact which an economic downturn has on the manufacturing sector.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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. When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. 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.
The Fund offers three share classes: Cash Series Shares, 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 classes.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Pennsylvania taxpayers because it invests in Pennsylvania municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400 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 p.m. (Eastern time), your redemption will be wired to you the following business day. You will receive that day's dividend.
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
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.
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.
You will receive periodic statements reporting all account activity, including dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Pennsylvania taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 29.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.04 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.04 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.77 |
% |
|
2.94 |
% |
|
3.36 |
% |
|
3.38 |
% |
|
3.37 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.45 |
% |
|
0.45 |
% |
|
0.45 |
% |
|
0.45 |
% |
|
0.45 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.67 |
% |
|
2.92 |
% |
|
3.31 |
% |
|
3.35 |
% |
|
3.27 |
% |
|
|
|||||||||||||||
|
Expense waiver3 |
|
0.45 |
% |
|
0.45 |
% |
|
0.46 |
% |
|
0.47 |
% |
|
0.47 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$114,180 |
|
|
$135,032 |
|
|
$64,281 |
|
|
$63,148 |
|
|
$37,076 |
|
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--99.4%1 |
|
|
|
|
|
|
|
Pennsylvania--99.4% |
|
|
|
|
$ |
3,370,000 |
|
Adams County, PA IDA, (Series 1999C), Weekly VRDNs (Martin Limestone, Inc.)/(Allfirst LOC) |
|
$ |
3,370,000 |
|
|
6,910,000 |
|
Adams County, PA IDA, (Series 1999A), Weekly VRDNs (Valley Quarries, Inc.)/(Allfirst LOC) |
|
|
6,910,000 |
|
|
2,395,000 |
|
Adams County, PA IDA, (Series 1999B), Weekly VRDNs (Valley Quarries, Inc.)/(Allfirst LOC) |
|
|
2,395,000 |
|
|
7,600,000 |
|
Adams County, PA IDA, (Series 2000), Weekly VRDNs (Genlyte Thomas Group LLC)/(Bank of America, N.A. LOC) |
|
|
7,600,000 |
|
|
8,000,000 |
|
Allegheny County, PA HDA, Variable Rate Demand Hospital Revenue Bonds (Series 1998B), 4.30% TOBs (South Hills Health System)/(PNC Bank, N.A. LOC), Mandatory Tender 4/1/2001 |
|
|
8,000,000 |
|
|
2,775,000 |
|
Allegheny County, PA IDA, Variable Rate Demand Revenue Bonds (Series 1997A), Weekly VRDNs (Jewish Community Center)/(National City Bank, Pennsylvania LOC) |
|
|
2,775,000 |
|
|
940,000 |
|
Berks County, PA IDA, Weekly VRDNs (ADC Quaker Maid Meats)/(First Union National Bank, Charlotte, NC LOC) |
|
|
940,000 |
|
|
1,125,000 |
|
Berks County, PA IDA, (Series 1988), Weekly VRDNs (Arrow Electronics, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,125,000 |
|
|
5,200,000 |
|
Berks County, PA IDA, (Series 1998), Weekly VRDNs (Eastern Industries, Inc.)/(Dauphin Deposit Bank and Trust LOC) |
|
|
5,200,000 |
|
|
2,970,000 |
|
Berks County, PA IDA, Manufacturing Facilities Revenue Bonds (Series 1996), Weekly VRDNs (Ram Industries, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,970,000 |
|
|
1,290,000 |
|
Berks County, PA IDA, Manufacturing Facilities Revenue Bonds (Series 1995), Weekly VRDNs (Grafika Commercial Printing, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,290,000 |
|
|
635,000 |
|
Berks County, PA IDA, Revenue Bonds (Series 1995A/Subseries B), Weekly VRDNs (First Union National Bank, Charlotte, NC LOC) |
|
|
635,000 |
|
|
2,000,000 |
|
Bethel Park, PA, 4.375% TRANs, 12/29/2000 |
|
|
2,000,533 |
|
|
2,250,000 |
|
Boyertown, PA Area School District (Series 1999/00), 5.30% TRANs, 6/29/2001 |
|
|
2,257,055 |
|
|
760,000 |
|
Bucks County, PA IDA, Weekly VRDNs (Double H Plastics, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
760,000 |
|
|
2,250,000 |
|
Bucks County, PA IDA, Weekly VRDNs (Pennsylvania Associates)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,250,000 |
|
|
2,270,000 |
|
Bucks County, PA IDA (Series 1991), Weekly VRDNs (Cabot Medical Corp.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,270,000 |
|
|
1,200,000 |
|
Butler County, PA IDA (Series 1996 A), Weekly VRDNs (Armco, Inc.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
1,200,000 |
|
|
1,695,000 |
|
Butler County, PA IDA (Series 1998), Weekly VRDNs (Allegheny Metalworking Corp.)/(National City, Pennsylvania LOC) |
|
|
1,695,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Pennsylvania--continued |
|
|
|
|
$ |
4,000,000 |
|
Butler County, PA IDA (Series 2000B), 5.00% TOBs (Concordia Lutheran Ministries)/(Asset Guaranty INS)/(Fleet National Bank, Springfield, MA LIQ), Mandatory Tender 8/1/2001 |
|
$ |
4,017,181 |
|
|
8,500,000 |
|
Butler County, PA IDA, 5.00% TOBs (Concordia Lutheran Ministries)/(Asset Guaranty INS)/(Fleet Bank N.A. LIQ), Mandatory Tender 10/1/2001 |
|
|
8,543,467 |
|
|
2,135,000 |
|
Butler County, PA IDA, IDRB (Series 1994), Weekly VRDNs (Lue-Rich Holding Co., Inc. Project)/(ABN AMRO Bank N.V., Amsterdam LOC) |
|
|
2,135,000 |
|
|
900,000 |
|
Carbon County, PA IDA, Weekly VRDNs (Summit Management & Utilities, Inc.)/(PNC Bank, N.A. LOC) |
|
|
900,000 |
|
|
10,700,000 |
|
Carbon County, PA IDA (Series 1999), 4.25% RANs (Horsehead Resource Development, Inc.)/(Chase Manhattan Bank N.A., New York LOC), 12/1/2000 |
|
|
10,700,000 |
|
|
2,800,000 |
|
Chartiers Valley, PA Industrial & Commercial Development Authority, Nursing Home Revenue Refunding Bonds (Series 1997A), Weekly VRDNs (Woodhaven Convalescent Center)/(Bank One, Ohio, N.A. LOC) |
|
|
2,800,000 |
|
|
4,335,000 |
|
Chester County, PA IDA (Series 2000A), Weekly VRDNs (Innovative Solutions and Support LLC)/(PNC Bank, N.A. LOC) |
|
|
4,335,000 |
|
|
6,200,000 |
|
Chester County, PA IDA (Series 2000A), Weekly VRDNs (Devault Packing Co., Inc.)/(Summit Bank, NJ LOC) |
|
|
6,200,000 |
|
|
10,200,000 |
|
Chester County, PA, 4.195%, TRANs, 12/15/2000 |
|
|
10,200,169 |
|
|
7,300,000 |
|
Clearfield County, PA IDA, Weekly VRDNs (Penn Traffic Co.)/(Fleet Bank N.A. LOC) |
|
|
7,300,000 |
|
|
4,500,000 |
|
Clinton County, PA IDA (Series 1992A), 4.70%, TOBs (International Paper Co.), Optional Tender 1/15/2001 |
|
|
4,500,000 |
|
|
900,000 |
|
Cumberland County, PA IDA, Industrial Development Bonds (Series 1994), Weekly VRDNs (Lane Enterprises, Inc. Project)/(First Union National Bank, Charlotte, NC LOC) |
|
|
900,000 |
|
|
5,000,000 |
|
Cumberland County, PA Municipal Authority, (Series 1994), 4.90% TOBs (United Methodist Homes for the Aging)/(PNC Bank, N.A. LOC), Mandatory Tender 6/1/2001 |
|
|
5,000,000 |
|
|
5,000,000 |
|
Dauphin County, PA IDA (Series 2000), Weekly VRDNs (Consolidated Scrap Resources, Inc.)/(Allfirst LOC) |
|
|
5,000,000 |
|
|
3,000,000 |
|
Dauphin County, PA IDA, Variable Rate EDRBs (Series 1998-B) Weekly VRDNs (Key Ingredients, Inc.)/(Citibank N.A., New York LOC) |
|
|
3,000,000 |
|
|
400,000 |
|
Delaware County, PA Authority, Hospital Revenue Bonds (Series 1996), Weekly VRDNs (Crozer-Chester Medical Center)/(KBC Bank N.V. LOC) |
|
|
400,000 |
|
|
2,500,000 |
|
Downington Area School District, PA, 5.10% TRANs, 6/29/2001 |
|
|
2,504,696 |
|
|
500,000 |
|
East Hempfield Township, PA IDA (Series 1985), Weekly VRDNs (Yellow Freight System)/(Wachovia Bank of NC, N.A. LOC) |
|
|
500,000 |
|
|
600,000 |
|
East Hempfield Township, PA IDA (Series 1997), WeeklyVRDNs (Mennonite Home)/(Dauphin Deposit Bank and Trust LOC) |
|
|
600,000 |
|
|
200,000 |
|
Erie County, PA Hospital Authority, Weekly VRDNs (St. Mary's Hospital Erie, PA)/(PNC Bank, N.A. LOC) |
|
|
200,000 |
|
|
20,000,000 |
|
Erie County, PA Hospital Authority Weekly VRDNs (St. Vincent Health System)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
20,000,000 |
|
|
8,500,000 |
|
Erie County, PA, 4.50% TRANs, 12/15/2000 |
|
|
8,504,430 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Pennsylvania--continued |
|
|
|
|
$ |
2,900,000 |
|
Franconia Township, PA IDA, IDRBs (Series 1997A), Weekly VRDNs (Asher's Chocolates)/(Mellon Bank N.A., Pittsburgh LOC) |
|
$ |
2,900,000 |
|
|
1,140,000 |
|
Franklin County, PA IDA Weekly VRDNs (The Guarriello LP)/(PNC Bank, N.A. LOC) |
|
|
1,140,000 |
|
|
2,290,000 |
|
Gettysburg Area, IDA (Series 1998A), Weekly VRDNs (Hanover Lantern, Inc.)/(Allfirst LOC) |
|
|
2,290,000 |
|
|
1,900,000 |
|
Greene County, PA IDA (Series 1999), Weekly VRDNs (CWS Co., Inc.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
1,900,000 |
|
|
2,255,000 |
|
Jackson Township, PA IDA (Series 1999A), Weekly VRDNs (Aerial Innovations, Inc.)/(Allfirst LOC) |
|
|
2,255,000 |
|
|
3,285,000 |
|
Lancaster, PA IDA (Series 1988C), Weekly VRDNs (Henry Molded Products, Inc.)/(Dauphin Deposit Bank and Trust LOC) |
|
|
3,285,000 |
|
|
2,095,000 |
|
Lancaster, PA IDA (Series 1998A),Weekly VRDNs (Henry Molded Products, Inc.)/(Dauphin Deposit Bank and Trust LOC) |
|
|
2,095,000 |
|
|
3,000,000 |
|
Lebanon County, PA Health Facilities Authority, (Series 1999), Weekly VRDNs (United Church of Christ Homes, Inc.)/(Allfirst LOC) |
|
|
3,000,000 |
|
|
5,575,000 |
|
Lehigh County, PA IDA (Series of 2000), Weekly VRDNs (P. R. E. USA, Inc./Suntuf 2000, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
5,575,000 |
|
|
1,000,000 |
|
Lehigh County, PA IDA, Variable Rate Demand Revenue Bonds, (Series 1997), Weekly VRDNs (American Manufacturing Co., Inc.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
1,000,000 |
|
|
6,120,000 |
|
McKean County, PA IDA (Series 1997), Weekly VRDNs (Keystone Powdered Metal Co.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
6,120,000 |
|
|
3,300,000 |
|
Monroe County, PA IDA, PCR, Weekly VRDNs (Cooper Industries, Inc.) |
|
|
3,300,000 |
|
|
600,000 |
|
Montgomery County, PA IDA, (Series 1992), Weekly VRDNs (RJI LP)/(First Union National Bank, Charlotte, NC LOC) |
|
|
600,000 |
|
|
16,000,000 |
|
Montgomery County, PA IDA (Series 2000), Weekly VRDNs (Lonza, Inc.)/(Deutsche Bank AG LOC) |
|
|
16,000,000 |
|
|
1,000,000 |
|
Montgomery County, PA IDA (Series A), Weekly VRDNs (Vari Corp.)/(Dauphin Deposit Bank and Trust LOC) |
|
|
1,000,000 |
|
|
4,250,000 |
|
Montgomery County, PA IDA (Series C), Weekly VRDNs (Vari Corp.)/(Dauphin Deposit Bank and Trust LOC) |
|
|
4,250,000 |
|
|
1,810,000 |
|
Montgomery County, PA IDA EDRB's (Series 1997), Weekly VRDNs (Palmer International, Inc.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
1,810,000 |
|
|
4,470,000 |
|
Moon Township, PA IDA,Weekly VRDNs (Airport Hotel Associates)/(National City Bank, Pennsylvania LOC) |
|
|
4,470,000 |
|
|
30,000 |
|
Moon Township, PA IDA (Series 1995A), Weekly VRDNs (One Thorn Run Center)/(National City Bank, Pennsylvania LOC) |
|
|
30,000 |
|
|
9,000,000 |
|
North Penn Health, Hospital and Education Authority, PA, Hospital Revenue Bonds (Series 1998), Weekly VRDNs (North Penn Hospital, PA)/(First Union National Bank, Charlotte, NC LOC) |
|
|
9,000,000 |
|
|
13,950,000 |
|
Northampton County, PA IDA, 4.85% CP (Citizens Utilities Co.), Mandatory Tender 11/6/2000 |
|
|
13,950,000 |
|
|
2,207,000 |
|
Northampton County, PA IDA, Variable Rate Revenue Bonds (Series 1997), Weekly VRDNs (Ultra-Poly Corp.)/(PNC Bank, N.A. LOC) |
|
|
2,207,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Pennsylvania--continued |
|
|
|
|
$ |
1,884,000 |
|
Northeast Bradford School District, PA, 5.39% TRANs, 6/29/2001 |
|
$ |
1,888,597 |
|
|
1,590,000 |
|
Northumberland County PA IDA, Revenue Bonds (Series 1995A), Weekly VRDNs (Furman Farms, Inc. Project)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,590,000 |
|
|
1,450,000 |
|
Pennsylvania EDFA Weekly VRDNs (Cyrogenics, Inc.)/(PNC Bank, N.A. LOC) |
|
|
1,450,000 |
|
|
2,100,000 |
|
Pennsylvania EDFA Weekly VRDNs (Industrial Scientific Corp.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
2,100,000 |
|
|
375,000 |
|
Pennsylvania EDFA Weekly VRDNs (ProMinent Fluid)/(PNC Bank, N.A. LOC) |
|
|
375,000 |
|
|
300,000 |
|
Pennsylvania EDFA Weekly VRDNs (RMF Associates)/(PNC Bank, N.A. LOC) |
|
|
300,000 |
|
|
875,000 |
|
Pennsylvania EDFA Weekly VRDNs (Stone and Lime Co.)/(PNC Bank, N.A. LOC) |
|
|
875,000 |
|
|
1,300,000 |
|
Pennsylvania EDFA (Series 1995-D2), Weekly VRDNs (ARCO Enterprises, Inc./Ronald L. Repasky, Sr. Project)/(PNC Bank, N.A. LOC) |
|
|
1,300,000 |
|
|
300,000 |
|
Pennsylvania EDFA (Series 1995-D9), Weekly VRDNs (North American Communications, Inc. Project)/(PNC Bank, N.A. LOC) |
|
|
300,000 |
|
|
918,800 |
|
Pennsylvania EDFA (Series 1992-C), Weekly VRDNs (Leonard H. Berenfield/Berenfield Containers)/(PNC Bank, N.A. LOC) |
|
|
918,800 |
|
|
1,900,000 |
|
Pennsylvania EDFA (Series 1996-E), Weekly VRDNs (Adelphoi, Inc.)/(PNC Bank, N.A. LOC) |
|
|
1,900,000 |
|
|
3,000,000 |
|
Pennsylvania EDFA (Series 1998-A), Weekly VRDNs (Fourth Generation Realty LLC)/(PNC Bank, N.A. LOC) |
|
|
3,000,000 |
|
|
2,200,000 |
|
Pennsylvania EDFA (Series B1), Weekly VRDNs (Erie Plating Co.)/(PNC Bank, N.A. LOC) |
|
|
2,200,000 |
|
|
2,900,000 |
|
Pennsylvania EDFA, EDRBs (Series 1996-D6), Weekly VRDNs (Toyo Tanso Specialty Materials, Inc.)/(PNC Bank, N.A. LOC) |
|
|
2,900,000 |
|
|
3,890,000 |
|
Pennsylvania EDFA, EDRBs (Series 1996C), Weekly VRDNs (Napco, Inc. Project)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
3,890,000 |
|
|
13,545,000 |
2 |
Pennsylvania HFA (Series 1997-58A), (PT-149), 4.40% TOBs (Commerzbank AG, Frankfurt LIQ), Optional Tender 10/11/2001 |
|
|
13,545,000 |
|
|
14,310,000 |
|
Pennsylvania HFA, MERLOTS (Series 1997K), Weekly VRDNs (First Union National Bank, Charlotte, NC LIQ) |
|
|
14,310,000 |
|
|
1,285,000 |
|
Pennsylvania HFA, (PT-119B), Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) |
|
|
1,285,000 |
|
|
865,000 |
|
Pennsylvania HFA, Section 8 Assisted Residential Development Refunding Bonds (Series 1992A), Weekly VRDNs (FSA INS)/(Citibank N.A., New York LIQ) |
|
|
865,000 |
|
|
12,100,000 |
|
Pennsylvania HFA, Variable Rate Certificates (Series 1999-65A) Weekly VRDNs (Bank of America, N.A. LIQ) |
|
|
12,100,000 |
|
|
1,000,000 |
|
Pennsylvania Intergovernmental Coop Authority, (PT-339), Weekly VRDNs (Philadelphia, PA)/(United States Treasury COL)/(Bayerische Hypotheken-und Vereinsbank AG LIQ) |
|
|
1,000,000 |
|
|
950,000 |
|
Pennsylvania Intergovernmental Coop Authority, 6.00% Bonds (FGIC INS), 6/15/2001 |
|
|
959,641 |
|
|
11,500,000 |
|
Pennsylvania State Higher Education Assistance Agency, Student Loan Adjustable Rate Revenue Bonds (Series 1997A), Weekly VRDNs (SLMA LOC) |
|
|
11,500,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Pennsylvania--continued |
|
|
|
|
$ |
2,635,000 |
|
Pennsylvania State Higher Education Facilities Authority, (Series 2000A), 4.75% RANs (Geneva College)/(Allied Irish Banks PLC LOC), 8/15/2001 |
|
$ |
2,642,974 |
|
|
5,600,000 |
|
Pennsylvania State Higher Education Facilities Authority, (Series B2), 3.80% TOBs (Carlow College)/(PNC Bank, N.A. LOC), Mandatory Tender 11/1/2000 |
|
|
5,600,000 |
|
|
1,430,000 |
|
Pennsylvania State Higher Education Facilities Authority, (Series O), 5.00% Bonds (AMBAC INS), 6/15/2001 |
|
|
1,436,052 |
|
|
4,500,000 |
|
Pennsylvania State Higher Education Facilities Authority, Revenue Bonds (Series 1997-B4), 3.80% TOBs (Kings College, PA)/(PNC Bank, N.A. LOC), Mandatory Tender 11/1/2000 |
|
|
4,500,000 |
|
|
2,125,000 |
|
Perkiomen Valley School District, PA, 5.30% TRANs, 6/29/2001 |
|
|
2,130,327 |
|
|
4,350,000 |
2 |
Philadelphia, PA IDA, 4.55% TOBs (Philadelphia Airport System)/(FGIC INS)/(Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 6/14/2001 |
|
|
4,350,000 |
|
|
10,000,000 |
|
Philadelphia, PA Water & Sewer, Lehman Trust Receipts, (Series 2000 FR/RI-N4), Weekly VRDNs (United States Treasury COL)/(Bank of New York LIQ) |
|
|
10,000,000 |
|
|
10,000,000 |
|
Philadelphia, PA, (Series A), 5.00% TRANs, 6/29/2001 |
|
|
10,036,686 |
|
|
2,500,000 |
|
Red Lion, PA Area School District, 5.30% TRANs, 6/29/2001 |
|
|
2,506,267 |
|
|
9,850,000 |
|
Schuylkill County, PA IDA, (Series 2000), Weekly VRDNs (Fabcon East Corp. LLC)/(Wells Fargo Bank Minnesota N.A. LOC) |
|
|
9,850,000 |
|
|
3,800,000 |
|
Venango, PA IDA (Series A), 4.40% CP (Scrubgrass Power Corp.)/(National Westminster Bank PLC LOC), Mandatory Tender 11/10/2000 |
|
|
3,800,000 |
|
|
3,000,000 |
|
Venango, PA IDA, Resource Recovery Bonds (Series 1993), 4.40% CP (Scrubgrass Power Corp.)/(National Westminster Bank PLC LOC), Mandatory Tender 11/10/2000 |
|
|
3,000,000 |
|
|
10,700,000 |
|
Washington County, PA IDA, Solid Waste Disposal Revenue Bonds (Series 1995), Weekly VRDNs (American Iron Oxide Co. Project)/(Bank of Tokyo-Mitsubishi Ltd. LOC) |
|
|
10,700,000 |
|
|
730,000 |
|
West Cornwall Township, PA Municipal Authority, Revenue Bonds (Series 1995), Weekly VRDNs (Lebanon Valley Brethern Home Project (PA)/(First Union National Bank, Charlotte, NC LOC) |
|
|
730,000 |
|
|
3,300,000 |
|
York County, PA IDA (Series 2000A), Weekly VRDNs (UL Holdings)/(Allfirst LOC) |
|
|
3,300,000 |
|
|
1,650,000 |
|
York County, PA IDA (Series of 2000), Weekly VRDNs (Fypon Ltd.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
1,650,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Pennsylvania--continued |
|
|
|
|
$ |
2,500,000 |
|
York County, PA IDA, Limited Obligation Revenue Bonds (Series 1997), Weekly VRDNs (Metal Exchange Corp.)/(Comerica Bank LOC) |
|
$ |
2,500,000 |
|
|
2,750,000 |
|
York County, PA IDA, Variable Rate Demand Limited Obligation Revenue Bonds (Series 1996), Weekly VRDNs (Metal Exchange Corp.)/(Comerica Bank LOC) |
|
|
2,750,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
|
$ |
414,093,875 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 63.2% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 and F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
95.09% |
|
4.91% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $17,895,000, which represents 4.3% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($416,691,830) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
COL |
--Collateralized |
|
CP |
--Commercial Paper |
|
EDFA |
--Economic Development Financing Authority |
|
EDRB |
--Economic Development Revenue Bonds |
|
FGIC |
--Financial Guaranty Insurance Company |
|
FSA |
--Financial Security Assurance |
|
HDA |
--Hospital Development Authority |
|
HFA |
--Housing Finance Authority |
|
IDA |
--Industrial Development Authority |
|
IDRB(s) |
--Industrial Development Revenue Bond(s) |
|
INS |
--Insured |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
PCR |
--Pollution Control Revenue |
|
PRF |
--Refunded |
|
RANs |
--Revenue Anticipation Notes |
|
SLMA |
--Student Loan Marketing Association |
|
TOBs |
--Tender Option Bonds |
|
TRANs |
--Tax and Revenue Anticipation Notes |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
414,093,875 |
|
Cash |
|
|
|
|
|
24,959 |
|
Income receivable |
|
|
|
|
|
3,806,445 |
|
Receivable for shares sold |
|
|
|
|
|
26,974 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
417,952,253 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
209,855 |
|
|
|
|
Income distribution payable |
|
|
987,522 |
|
|
|
|
Accrued expenses |
|
|
63,046 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
1,260,423 |
|
|
||||||
|
Net assets for 416,691,830 shares outstanding |
|
|
|
|
$ |
416,691,830 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
$114,179,689 ÷ 114,179,689 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Institutional Service Shares: |
|
|
|
|
|
|
|
$248,369,957 ÷ 248,369,957 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Cash Series Shares: |
|
|
|
|
|
|
|
$54,142,184 ÷ 54,142,184 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
19,462,678 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
2,355,670 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
354,808 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
25,742 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
122,639 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
3,769 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,156 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
13,024 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
109,042 |
|
|
|
|
|
Distribution services fee--Cash Series Shares |
|
|
|
|
|
|
200,679 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
324,007 |
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
728,403 |
|
|
|
|
|
Shareholder services fee--Cash Series Shares |
|
|
|
|
|
|
125,424 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
38,635 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
28,098 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
27,608 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
3,525 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
4,472,229 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(952,882 |
) |
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Cash Series Shares |
|
|
(25,085 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(324,007 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(145,681 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(1,447,655 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
3,024,574 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
16,438,104 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
||
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
16,438,104 |
|
|
$ |
12,564,568 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(4,760,149 |
) |
|
|
(3,050,817 |
) |
|
Institutional Service Shares |
|
|
(10,114,058 |
) |
|
|
(8,398,776 |
) |
|
Cash Series Shares |
|
|
(1,563,897 |
) |
|
|
(1,114,975 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(16,438,104 |
) |
|
|
(12,564,568 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
1,594,556,969 |
|
|
|
1,619,949,097 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
4,751,497 |
|
|
|
3,820,422 |
|
|
Cost of shares redeemed |
|
|
(1,614,279,079 |
) |
|
|
(1,696,708,970 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(14,970,613 |
) |
|
|
(72,939,451 |
) |
|
|
||||||||
|
Change in net assets |
|
|
(14,970,613 |
) |
|
|
(72,939,451 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
431,662,443 |
|
|
|
504,601,894 |
|
|
|
||||||||
|
End of period |
|
$ |
416,691,830 |
|
|
$ |
431,662,443 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Money Market Obligations Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of Pennsylvania Municipal Cash Trust (the "Fund") a non-diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers three classes of shares: Institutional Service Shares, Cash Series Shares and Institutional Shares. The investment objective of the Fund is current income exempt from federal income tax and the personal income taxes imposed by the Commonwealth of Pennsylvania consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
At October 31, 2000, the Fund for federal tax purposes, had a capital loss carryforward of $1,534, which will reduce the Fund's taxable income arising from the future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for Federal tax. Pursuant to the code, such capital loss carryforward will expire as follows:
|
Expiration Year |
|
Expiration Amount |
|
2001 |
|
$ 64 |
|
|
||
|
2005 |
|
$1,470 |
|
|
||
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees ("Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At October 31, 2000, capital paid-in aggregated $416,691,830.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
507,943,703 |
|
|
590,890,826 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
1,703,868 |
|
|
1,069,331 |
|
|
Shares redeemed |
|
(530,499,834 |
) |
|
(521,209,277 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
(20,852,263 |
) |
|
70,750,880 |
|
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
Shares sold |
|
910,504,908 |
|
|
886,863,203 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
1,558,214 |
|
|
1,700,459 |
|
|
Shares redeemed |
|
(917,031,927 |
) |
|
(1,027,605,705 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
(4,968,805 |
) |
|
(139,042,043 |
) |
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Cash Series Shares: |
|
|
|
|
|
|
|
Shares sold |
|
176,108,358 |
|
|
142,195,068 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
1,489,415 |
|
|
1,050,632 |
|
|
Shares redeemed |
|
(166,747,318 |
) |
|
(147,893,988 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM CASH SERIES SHARE TRANSACTIONS |
|
10,850,455 |
|
|
(4,648,288 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(14,970,613 |
) |
|
(72,939,451 |
) |
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Funds with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Cash Series Shares. The Plan provides that the Fund may incur distribution expenses up to 0.40% of the average daily net assets of the Cash Series Shares, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $756,135,000 and $833,775,000 respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 67.1% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 11.0% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Pennsylvania Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Pennsylvania Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as they become available. To obtain the SAI, Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Pennsylvania Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N534
G00214-01-IS (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and the personal income taxes imposed by the Commonwealth of Pennsylvania consistent with stability of principal by investing in a portfolio of short-term, high-quality Pennsylvania tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 8
How to Redeem Shares 9
Account and Share Information 12
Who Manages the Fund? 13
Financial Information 13
Report of Ernst & Young LLP, Independent Auditors 29
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and the personal income taxes imposed by the Commonwealth of Pennsylvania 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.
The Fund invests in short-term, high-quality Pennsylvania tax exempt securities. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Pennsylvania dividend and interest income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Service Shares total returns on a calendar year-end basis.
The Fund's Shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.67%.
Within the periods shown in the Chart, the Fund's Institutional Service Shares highest quarterly return was 1.43% (quarter ended December 31, 1990). Its lowest quarterly return was 0.47% (quarter ended March 31, 1994).
The following table represents the Fund's Institutional Service Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.80% |
|
5 Years |
|
3.13% |
|
10 Years |
|
3.31% |
The Fund's Institutional Shares 7-Day Net Yield as of December 31, 1999 was 4.03%.
You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Institutional Service Shares of the Fund.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions)
|
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.50% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee3 |
|
0.25% |
|
Other Expenses |
|
0.15% |
|
Total Annual Fund Operating Expenses |
|
0.90% |
|
1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts during the fiscal year ended October 31, 2000. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waivers of Fund Expenses |
|
0.25% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.65% |
|
2 The adviser voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.30% for the fiscal year ended October 31, 2000. |
||
|
3 The shareholder services provider voluntarily waived a portion of the shareholder services fee. The shareholder services provider can terminate this voluntary waiver at any time. The shareholder services fee paid by the Fund (after the voluntary waiver) was 0.20% for the fiscal year ended October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Institutional Service Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Institutional Service Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's Institutional Service Shares operating expenses are before waivers as shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
|
$ |
92 |
|
|
|||
|
3 Years |
|
$ |
287 |
|
|
|||
|
5 Years |
|
$ |
498 |
|
|
|||
|
10 Years |
|
$ |
1,108 |
|
|
|||
The Fund invests in a portfolio of high-quality Pennsylvania tax exempt securities maturing in 397 days or less. The Fund will invest its assets so that at least 80% of its annual interest income is exempt from federal regular income tax and Pennsylvania dividend and interest income tax. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors, such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal income tax and Pennsylvania dividend and interest income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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 fixed income securities must repay the principal amount of the security, normally within a specified time.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These NRSROs assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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 prices 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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Pennsylvania issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Pennsylvania, the Fund may be subject to additional risks compared to funds that invest in multiple states. Pennsylvania's economy has diversified away from the concentration in heavy industry and manufacturing which existed prior to the downsizing of the steel industry; in addition, it has improved its mixture of service and technology based businesses. Despite the improvements in its employment base, Pennsylvania is still subject to the cyclical impact which an economic downturn has on the manufacturing sector.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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. When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. 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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
The Fund offers three share classes: Cash Series Shares, Institutional Shares and Institutional Service Shares, each representing interests in a single portfolio of securities. This prospectus relates only to Institutional Service Shares. Each share class has different expenses, which affect their performance. Contact your investment professional or call 1-800-341-7400 for more information concerning the other classes.
The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Pennsylvania taxpayers because it invests in Pennsylvania municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400 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).
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Pennsylvania taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 29.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.04 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.04 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.56 |
% |
|
2.73 |
% |
|
3.15 |
% |
|
3.18 |
% |
|
3.16 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.65 |
% |
|
0.65 |
% |
|
0.65 |
% |
|
0.65 |
% |
|
0.65 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.47 |
% |
|
2.68 |
% |
|
3.09 |
% |
|
3.14 |
% |
|
3.12 |
% |
|
|
|||||||||||||||
|
Expense waiver3 |
|
0.25 |
% |
|
0.25 |
% |
|
0.26 |
% |
|
0.27 |
% |
|
0.27 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$248,370 |
|
$253,339 |
|
$392,381 |
|
$264,634 |
|
$221,851 |
|
||||
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--99.4%1 |
|
|
|
|
|
|
|
Pennsylvania--99.4% |
|
|
|
|
$ |
3,370,000 |
|
Adams County, PA IDA, (Series 1999C), Weekly VRDNs (Martin Limestone, Inc.)/(Allfirst LOC) |
|
$ |
3,370,000 |
|
|
6,910,000 |
|
Adams County, PA IDA, (Series 1999A), Weekly VRDNs (Valley Quarries, Inc.)/(Allfirst LOC) |
|
|
6,910,000 |
|
|
2,395,000 |
|
Adams County, PA IDA, (Series 1999B), Weekly VRDNs (Valley Quarries, Inc.)/(Allfirst LOC) |
|
|
2,395,000 |
|
|
7,600,000 |
|
Adams County, PA IDA, (Series 2000), Weekly VRDNs (Genlyte Thomas Group LLC)/(Bank of America, N.A. LOC) |
|
|
7,600,000 |
|
|
8,000,000 |
|
Allegheny County, PA HDA, Variable Rate Demand Hospital Revenue Bonds (Series 1998B), 4.30% TOBs (South Hills Health System)/(PNC Bank, N.A. LOC), Mandatory Tender 4/1/2001 |
|
|
8,000,000 |
|
|
2,775,000 |
|
Allegheny County, PA IDA, Variable Rate Demand Revenue Bonds (Series 1997A), Weekly VRDNs (Jewish Community Center)/(National City Bank, Pennsylvania LOC) |
|
|
2,775,000 |
|
|
940,000 |
|
Berks County, PA IDA, Weekly VRDNs (ADC Quaker Maid Meats)/(First Union National Bank, Charlotte, NC LOC) |
|
|
940,000 |
|
|
1,125,000 |
|
Berks County, PA IDA, (Series 1988), Weekly VRDNs (Arrow Electronics, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,125,000 |
|
|
5,200,000 |
|
Berks County, PA IDA, (Series 1998), Weekly VRDNs (Eastern Industries, Inc.)/(Dauphin Deposit Bank and Trust LOC) |
|
|
5,200,000 |
|
|
2,970,000 |
|
Berks County, PA IDA, Manufacturing Facilities Revenue Bonds (Series 1996), Weekly VRDNs (Ram Industries, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,970,000 |
|
|
1,290,000 |
|
Berks County, PA IDA, Manufacturing Facilities Revenue Bonds (Series 1995), Weekly VRDNs (Grafika Commercial Printing, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,290,000 |
|
|
635,000 |
|
Berks County, PA IDA, Revenue Bonds (Series 1995A/Subseries B), Weekly VRDNs (First Union National Bank, Charlotte, NC LOC) |
|
|
635,000 |
|
|
2,000,000 |
|
Bethel Park, PA, 4.375% TRANs, 12/29/2000 |
|
|
2,000,533 |
|
|
2,250,000 |
|
Boyertown, PA Area School District (Series 1999/00), 5.30% TRANs, 6/29/2001 |
|
|
2,257,055 |
|
|
760,000 |
|
Bucks County, PA IDA, Weekly VRDNs (Double H Plastics, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
760,000 |
|
|
2,250,000 |
|
Bucks County, PA IDA, Weekly VRDNs (Pennsylvania Associates)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,250,000 |
|
|
2,270,000 |
|
Bucks County, PA IDA (Series 1991), Weekly VRDNs (Cabot Medical Corp.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,270,000 |
|
|
1,200,000 |
|
Butler County, PA IDA (Series 1996 A), Weekly VRDNs (Armco, Inc.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
1,200,000 |
|
|
1,695,000 |
|
Butler County, PA IDA (Series 1998), Weekly VRDNs (Allegheny Metalworking Corp.)/(National City, Pennsylvania LOC) |
|
|
1,695,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Pennsylvania--continued |
|
|
|
|
$ |
4,000,000 |
|
Butler County, PA IDA (Series 2000B), 5.00% TOBs (Concordia Lutheran Ministries)/(Asset Guaranty INS)/(Fleet National Bank, Springfield, MA LIQ), Mandatory Tender 8/1/2001 |
|
$ |
4,017,181 |
|
|
8,500,000 |
|
Butler County, PA IDA, 5.00% TOBs (Concordia Lutheran Ministries)/(Asset Guaranty INS)/(Fleet Bank N.A. LIQ), Mandatory Tender 10/1/2001 |
|
|
8,543,467 |
|
|
2,135,000 |
|
Butler County, PA IDA, IDRB (Series 1994), Weekly VRDNs (Lue-Rich Holding Co., Inc. Project)/(ABN AMRO Bank N.V., Amsterdam LOC) |
|
|
2,135,000 |
|
|
900,000 |
|
Carbon County, PA IDA, Weekly VRDNs (Summit Management & Utilities, Inc.)/(PNC Bank, N.A. LOC) |
|
|
900,000 |
|
|
10,700,000 |
|
Carbon County, PA IDA (Series 1999), 4.25% RANs (Horsehead Resource Development, Inc.)/(Chase Manhattan Bank N.A., New York LOC), 12/1/2000 |
|
|
10,700,000 |
|
|
2,800,000 |
|
Chartiers Valley, PA Industrial & Commercial Development Authority, Nursing Home Revenue Refunding Bonds (Series 1997A), Weekly VRDNs (Woodhaven Convalescent Center)/(Bank One, Ohio, N.A. LOC) |
|
|
2,800,000 |
|
|
4,335,000 |
|
Chester County, PA IDA (Series 2000A), Weekly VRDNs (Innovative Solutions and Support LLC)/(PNC Bank, N.A. LOC) |
|
|
4,335,000 |
|
|
6,200,000 |
|
Chester County, PA IDA (Series 2000A), Weekly VRDNs (Devault Packing Co., Inc.)/(Summit Bank, NJ LOC) |
|
|
6,200,000 |
|
|
10,200,000 |
|
Chester County, PA, 4.195%, TRANs, 12/15/2000 |
|
|
10,200,169 |
|
|
7,300,000 |
|
Clearfield County, PA IDA, Weekly VRDNs (Penn Traffic Co.)/(Fleet Bank N.A. LOC) |
|
|
7,300,000 |
|
|
4,500,000 |
|
Clinton County, PA IDA (Series 1992A), 4.70%, TOBs (International Paper Co.), Optional Tender 1/15/2001 |
|
|
4,500,000 |
|
|
900,000 |
|
Cumberland County, PA IDA, Industrial Development Bonds (Series 1994), Weekly VRDNs (Lane Enterprises, Inc. Project)/(First Union National Bank, Charlotte, NC LOC) |
|
|
900,000 |
|
|
5,000,000 |
|
Cumberland County, PA Municipal Authority, (Series 1994), 4.90% TOBs (United Methodist Homes for the Aging)/(PNC Bank, N.A. LOC), Mandatory Tender 6/1/2001 |
|
|
5,000,000 |
|
|
5,000,000 |
|
Dauphin County, PA IDA (Series 2000), Weekly VRDNs (Consolidated Scrap Resources, Inc.)/(Allfirst LOC) |
|
|
5,000,000 |
|
|
3,000,000 |
|
Dauphin County, PA IDA, Variable Rate EDRBs (Series 1998-B) Weekly VRDNs (Key Ingredients, Inc.)/(Citibank N.A., New York LOC) |
|
|
3,000,000 |
|
|
400,000 |
|
Delaware County, PA Authority, Hospital Revenue Bonds (Series 1996), Weekly VRDNs (Crozer-Chester Medical Center)/(KBC Bank N.V. LOC) |
|
|
400,000 |
|
|
2,500,000 |
|
Downington Area School District, PA, 5.10% TRANs, 6/29/2001 |
|
|
2,504,696 |
|
|
500,000 |
|
East Hempfield Township, PA IDA (Series 1985), Weekly VRDNs (Yellow Freight System)/(Wachovia Bank of NC, N.A. LOC) |
|
|
500,000 |
|
|
600,000 |
|
East Hempfield Township, PA IDA (Series 1997), Weekly VRDNs (Mennonite Home)/(Dauphin Deposit Bank and Trust LOC) |
|
|
600,000 |
|
|
200,000 |
|
Erie County, PA Hospital Authority, Weekly VRDNs (St. Mary's Hospital Erie, PA)/(PNC Bank, N.A. LOC) |
|
|
200,000 |
|
|
20,000,000 |
|
Erie County, PA Hospital Authority Weekly VRDNs (St. Vincent Health System)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
20,000,000 |
|
|
8,500,000 |
|
Erie County, PA, 4.50% TRANs, 12/15/2000 |
|
|
8,504,430 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Pennsylvania--continued |
|
|
|
|
$ |
2,900,000 |
|
Franconia Township, PA IDA, IDRBs (Series 1997A), Weekly VRDNs (Asher's Chocolates)/(Mellon Bank N.A., Pittsburgh LOC) |
|
$ |
2,900,000 |
|
|
1,140,000 |
|
Franklin County, PA IDA Weekly VRDNs (The Guarriello LP)/(PNC Bank, N.A. LOC) |
|
|
1,140,000 |
|
|
2,290,000 |
|
Gettysburg Area, IDA (Series 1998A), Weekly VRDNs (Hanover Lantern, Inc.)/(Allfirst LOC) |
|
|
2,290,000 |
|
|
1,900,000 |
|
Greene County, PA IDA (Series 1999), Weekly VRDNs (CWS Co., Inc.)/(Huntington National Bank, Columbus, OH LOC) |
|
|
1,900,000 |
|
|
2,255,000 |
|
Jackson Township, PA IDA (Series 1999A), Weekly VRDNs (Aerial Innovations, Inc.)/(Allfirst LOC) |
|
|
2,255,000 |
|
|
3,285,000 |
|
Lancaster, PA IDA (Series 1988C), Weekly VRDNs (Henry Molded Products, Inc.)/(Dauphin Deposit Bank and Trust LOC) |
|
|
3,285,000 |
|
|
2,095,000 |
|
Lancaster, PA IDA (Series 1998A),Weekly VRDNs (Henry Molded Products, Inc.)/(Dauphin Deposit Bank and Trust LOC) |
|
|
2,095,000 |
|
|
3,000,000 |
|
Lebanon County, PA Health Facilities Authority, (Series 1999), Weekly VRDNs (United Church of Christ Homes, Inc.)/(Allfirst LOC) |
|
|
3,000,000 |
|
|
5,575,000 |
|
Lehigh County, PA IDA (Series of 2000), Weekly VRDNs (P. R. E. USA, Inc./Suntuf 2000, Inc.)/(First Union National Bank, Charlotte, NC LOC) |
|
|
5,575,000 |
|
|
1,000,000 |
|
Lehigh County, PA IDA, Variable Rate Demand Revenue Bonds, (Series 1997), Weekly VRDNs (American Manufacturing Co., Inc.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
1,000,000 |
|
|
6,120,000 |
|
McKean County, PA IDA (Series 1997), Weekly VRDNs (Keystone Powdered Metal Co.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
6,120,000 |
|
|
3,300,000 |
|
Monroe County, PA IDA, PCR, Weekly VRDNs (Cooper Industries, Inc.) |
|
|
3,300,000 |
|
|
600,000 |
|
Montgomery County, PA IDA, (Series 1992), Weekly VRDNs (RJI LP)/(First Union National Bank, Charlotte, NC LOC) |
|
|
600,000 |
|
|
16,000,000 |
|
Montgomery County, PA IDA (Series 2000), Weekly VRDNs (Lonza, Inc.)/(Deutsche Bank AG LOC) |
|
|
16,000,000 |
|
|
1,000,000 |
|
Montgomery County, PA IDA (Series A), Weekly VRDNs (Vari Corp.)/(Dauphin Deposit Bank and Trust LOC) |
|
|
1,000,000 |
|
|
4,250,000 |
|
Montgomery County, PA IDA (Series C), Weekly VRDNs (Vari Corp.)/(Dauphin Deposit Bank and Trust LOC) |
|
|
4,250,000 |
|
|
1,810,000 |
|
Montgomery County, PA IDA EDRB's (Series 1997), Weekly VRDNs (Palmer International, Inc.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
1,810,000 |
|
|
4,470,000 |
|
Moon Township, PA IDA,Weekly VRDNs (Airport Hotel Associates)/(National City Bank, Pennsylvania LOC) |
|
|
4,470,000 |
|
|
30,000 |
|
Moon Township, PA IDA (Series 1995A), Weekly VRDNs (One Thorn Run Center)/(National City Bank, Pennsylvania LOC) |
|
|
30,000 |
|
|
9,000,000 |
|
North Penn Health, Hospital and Education Authority, PA, Hospital Revenue Bonds (Series 1998), Weekly VRDNs (North Penn Hospital, PA)/(First Union National Bank, Charlotte, NC LOC) |
|
|
9,000,000 |
|
|
13,950,000 |
|
Northampton County, PA IDA, 4.85% CP (Citizens Utilities Co.), Mandatory Tender 11/6/2000 |
|
|
13,950,000 |
|
|
2,207,000 |
|
Northampton County, PA IDA, Variable Rate Revenue Bonds (Series 1997), Weekly VRDNs (Ultra-Poly Corp.)/(PNC Bank, N.A. LOC) |
|
|
2,207,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Pennsylvania--continued |
|
|
|
|
$ |
1,884,000 |
|
Northeast Bradford School District, PA, 5.39% TRANs, 6/29/2001 |
|
$ |
1,888,597 |
|
|
1,590,000 |
|
Northumberland County PA IDA, Revenue Bonds (Series 1995A), Weekly VRDNs (Furman Farms, Inc. Project)/(First Union National Bank, Charlotte, NC LOC) |
|
|
1,590,000 |
|
|
1,450,000 |
|
Pennsylvania EDFA Weekly VRDNs (Cyrogenics, Inc.)/(PNC Bank, N.A. LOC) |
|
|
1,450,000 |
|
|
2,100,000 |
|
Pennsylvania EDFA Weekly VRDNs (Industrial Scientific Corp.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
2,100,000 |
|
|
375,000 |
|
Pennsylvania EDFA Weekly VRDNs (ProMinent Fluid)/(PNC Bank, N.A. LOC) |
|
|
375,000 |
|
|
300,000 |
|
Pennsylvania EDFA Weekly VRDNs (RMF Associates)/(PNC Bank, N.A. LOC) |
|
|
300,000 |
|
|
875,000 |
|
Pennsylvania EDFA Weekly VRDNs (Stone and Lime Co.)/(PNC Bank, N.A. LOC) |
|
|
875,000 |
|
|
1,300,000 |
|
Pennsylvania EDFA (Series 1995-D2), Weekly VRDNs (ARCO Enterprises, Inc./Ronald L. Repasky, Sr. Project)/(PNC Bank, N.A. LOC) |
|
|
1,300,000 |
|
|
300,000 |
|
Pennsylvania EDFA (Series 1995-D9), Weekly VRDNs (North American Communications, Inc. Project)/(PNC Bank, N.A. LOC) |
|
|
300,000 |
|
|
918,800 |
|
Pennsylvania EDFA (Series 1992-C), Weekly VRDNs (Leonard H. Berenfield/Berenfield Containers)/(PNC Bank, N.A. LOC) |
|
|
918,800 |
|
|
1,900,000 |
|
Pennsylvania EDFA (Series 1996-E), Weekly VRDNs (Adelphoi, Inc.)/(PNC Bank, N.A. LOC) |
|
|
1,900,000 |
|
|
3,000,000 |
|
Pennsylvania EDFA (Series 1998-A), Weekly VRDNs (Fourth Generation Realty LLC)/(PNC Bank, N.A. LOC) |
|
|
3,000,000 |
|
|
2,200,000 |
|
Pennsylvania EDFA (Series B1), Weekly VRDNs (Erie Plating Co.)/(PNC Bank, N.A. LOC) |
|
|
2,200,000 |
|
|
2,900,000 |
|
Pennsylvania EDFA, EDRBs (Series 1996-D6), Weekly VRDNs (Toyo Tanso Specialty Materials, Inc.)/(PNC Bank, N.A. LOC) |
|
|
2,900,000 |
|
|
3,890,000 |
|
Pennsylvania EDFA, EDRBs (Series 1996C), Weekly VRDNs (Napco, Inc. Project)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
3,890,000 |
|
|
13,545,000 |
2 |
Pennsylvania HFA (Series 1997-58A), (PT-149), 4.40% TOBs (Commerzbank AG, Frankfurt LIQ), Optional Tender 10/11/2001 |
|
|
13,545,000 |
|
|
14,310,000 |
|
Pennsylvania HFA, MERLOTS (Series 1997K), Weekly VRDNs (First Union National Bank, Charlotte, NC LIQ) |
|
|
14,310,000 |
|
|
1,285,000 |
|
Pennsylvania HFA, (PT-119B), Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) |
|
|
1,285,000 |
|
|
865,000 |
|
Pennsylvania HFA, Section 8 Assisted Residential Development Refunding Bonds (Series 1992A), Weekly VRDNs (FSA INS)/(Citibank N.A., New York LIQ) |
|
|
865,000 |
|
|
12,100,000 |
|
Pennsylvania HFA, Variable Rate Certificates (Series 1999-65A) Weekly VRDNs (Bank of America, N.A. LIQ) |
|
|
12,100,000 |
|
|
1,000,000 |
|
Pennsylvania Intergovernmental Coop Authority, (PT-339), Weekly VRDNs (Philadelphia, PA)/(United States Treasury COL)/(Bayerische Hypotheken-und Vereinsbank AG LIQ) |
|
|
1,000,000 |
|
|
950,000 |
|
Pennsylvania Intergovernmental Coop Authority, 6.00% Bonds (FGIC INS), 6/15/2001 |
|
|
959,641 |
|
|
11,500,000 |
|
Pennsylvania State Higher Education Assistance Agency, Student Loan Adjustable Rate Revenue Bonds (Series 1997A), Weekly VRDNs (SLMA LOC) |
|
|
11,500,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Pennsylvania--continued |
|
|
|
|
$ |
2,635,000 |
|
Pennsylvania State Higher Education Facilities Authority, (Series 2000A), 4.75% RANs (Geneva College)/(Allied Irish Banks PLC LOC), 8/15/2001 |
|
$ |
2,642,974 |
|
|
5,600,000 |
|
Pennsylvania State Higher Education Facilities Authority, (Series B2), 3.80% TOBs (Carlow College)/(PNC Bank, N.A. LOC), Mandatory Tender 11/1/2000 |
|
|
5,600,000 |
|
|
1,430,000 |
|
Pennsylvania State Higher Education Facilities Authority, (Series O), 5.00% Bonds (AMBAC INS), 6/15/2001 |
|
|
1,436,052 |
|
|
4,500,000 |
|
Pennsylvania State Higher Education Facilities Authority, Revenue Bonds (Series 1997-B4), 3.80% TOBs (Kings College, PA)/(PNC Bank, N.A. LOC), Mandatory Tender 11/1/2000 |
|
|
4,500,000 |
|
|
2,125,000 |
|
Perkiomen Valley School District, PA, 5.30% TRANs, 6/29/2001 |
|
|
2,130,327 |
|
|
4,350,000 |
2 |
Philadelphia, PA IDA, 4.55% TOBs (Philadelphia Airport System)/(FGIC INS)/(Merrill Lynch Capital Services, Inc. LIQ), Optional Tender 6/14/2001 |
|
|
4,350,000 |
|
|
10,000,000 |
|
Philadelphia, PA Water & Sewer, Lehman Trust Receipts, (Series 2000 FR/RI-N4), Weekly VRDNs (United States Treasury COL)/(Bank of New York LIQ) |
|
|
10,000,000 |
|
|
10,000,000 |
|
Philadelphia, PA, (Series A), 5.00% TRANs, 6/29/2001 |
|
|
10,036,686 |
|
|
2,500,000 |
|
Red Lion, PA Area School District, 5.30% TRANs, 6/29/2001 |
|
|
2,506,267 |
|
|
9,850,000 |
|
Schuylkill County, PA IDA, (Series 2000), Weekly VRDNs (Fabcon East Corp. LLC)/(Wells Fargo Bank Minnesota N.A. LOC) |
|
|
9,850,000 |
|
|
3,800,000 |
|
Venango, PA IDA (Series A), 4.40% CP (Scrubgrass Power Corp.)/(National Westminster Bank PLC LOC), Mandatory Tender 11/10/2000 |
|
|
3,800,000 |
|
|
3,000,000 |
|
Venango, PA IDA, Resource Recovery Bonds (Series 1993), 4.40% CP (Scrubgrass Power Corp.)/(National Westminster Bank PLC LOC), Mandatory Tender 11/10/2000 |
|
|
3,000,000 |
|
|
10,700,000 |
|
Washington County, PA IDA, Solid Waste Disposal Revenue Bonds (Series 1995), Weekly VRDNs (American Iron Oxide Co. Project)/(Bank of Tokyo-Mitsubishi Ltd. LOC) |
|
|
10,700,000 |
|
|
730,000 |
|
West Cornwall Township, PA Municipal Authority, Revenue Bonds (Series 1995), Weekly VRDNs (Lebanon Valley Brethern Home Project (PA)/(First Union National Bank, Charlotte, NC LOC) |
|
|
730,000 |
|
|
3,300,000 |
|
York County, PA IDA (Series 2000A), Weekly VRDNs (UL Holdings)/(Allfirst LOC) |
|
|
3,300,000 |
|
|
1,650,000 |
|
York County, PA IDA (Series of 2000), Weekly VRDNs (Fypon Ltd.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
1,650,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Pennsylvania--continued |
|
|
|
|
$ |
2,500,000 |
|
York County, PA IDA, Limited Obligation Revenue Bonds (Series 1997), Weekly VRDNs (Metal Exchange Corp.)/(Comerica Bank LOC) |
|
$ |
2,500,000 |
|
|
2,750,000 |
|
York County, PA IDA, Variable Rate Demand Limited Obligation Revenue Bonds (Series 1996), Weekly VRDNs (Metal Exchange Corp.)/(Comerica Bank LOC) |
|
|
2,750,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (AT AMORTIZED COST)3 |
|
$ |
414,093,875 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 63.2% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 and F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
95.09% |
|
4.91% |
2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Trustees. At October 31, 2000, these securities amounted to $17,895,000, which represents 4.3% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($416,691,830) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
COL |
--Collateralized |
|
CP |
--Commercial Paper |
|
EDFA |
--Economic Development Financing Authority |
|
EDRB |
--Economic Development Revenue Bonds |
|
FGIC |
--Financial Guaranty Insurance Company |
|
FSA |
--Financial Security Assurance |
|
HDA |
--Hospital Development Authority |
|
HFA |
--Housing Finance Authority |
|
IDA |
--Industrial Development Authority |
|
IDRB(s) |
--Industrial Development Revenue Bond(s) |
|
INS |
--Insured |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
PCR |
--Pollution Control Revenue |
|
PRF |
--Refunded |
|
RANs |
--Revenue Anticipation Notes |
|
SLMA |
--Student Loan Marketing Association |
|
TOBs |
--Tender Option Bonds |
|
TRANs |
--Tax and Revenue Anticipation Notes |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
414,093,875 |
|
Cash |
|
|
|
|
|
24,959 |
|
Income receivable |
|
|
|
|
|
3,806,445 |
|
Receivable for shares sold |
|
|
|
|
|
26,974 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
417,952,253 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
209,855 |
|
|
|
|
Income distribution payable |
|
|
987,522 |
|
|
|
|
Accrued expenses |
|
|
63,046 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
1,260,423 |
|
|
||||||
|
Net assets for 416,691,830 shares outstanding |
|
|
|
|
$ |
416,691,830 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
$114,179,689 ÷ 114,179,689 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Institutional Service Shares: |
|
|
|
|
|
|
|
$248,369,957 ÷ 248,369,957 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Cash Series Shares: |
|
|
|
|
|
|
|
$54,142,184 ÷ 54,142,184 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
19,462,678 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
2,355,670 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
354,808 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
25,742 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
122,639 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
3,769 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,156 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
13,024 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
109,042 |
|
|
|
|
|
Distribution services fee--Cash Series Shares |
|
|
|
|
|
|
200,679 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
324,007 |
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
728,403 |
|
|
|
|
|
Shareholder services fee--Cash Series Shares |
|
|
|
|
|
|
125,424 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
38,635 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
28,098 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
27,608 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
3,525 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
4,472,229 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(952,882 |
) |
|
|
|
|
|
|
|
|
Waiver of distribution services fee--Cash Series Shares |
|
|
(25,085 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(324,007 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(145,681 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(1,447,655 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
3,024,574 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
16,438,104 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
||
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
16,438,104 |
|
|
$ |
12,564,568 |
|
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(4,760,149 |
) |
|
|
(3,050,817 |
) |
|
Institutional Service Shares |
|
|
(10,114,058 |
) |
|
|
(8,398,776 |
) |
|
Cash Series Shares |
|
|
(1,563,897 |
) |
|
|
(1,114,975 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(16,438,104 |
) |
|
|
(12,564,568 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
1,594,556,969 |
|
|
|
1,619,949,097 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
4,751,497 |
|
|
|
3,820,422 |
|
|
Cost of shares redeemed |
|
|
(1,614,279,079 |
) |
|
|
(1,696,708,970 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(14,970,613 |
) |
|
|
(72,939,451 |
) |
|
|
||||||||
|
Change in net assets |
|
|
(14,970,613 |
) |
|
|
(72,939,451 |
) |
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
431,662,443 |
|
|
|
504,601,894 |
|
|
|
||||||||
|
End of period |
|
$ |
416,691,830 |
|
|
$ |
431,662,443 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Money Market Obligations Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of Pennsylvania Municipal Cash Trust (the "Fund") a non-diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers three classes of shares: Institutional Service Shares, Cash Series Shares and Institutional Shares. The investment objective of the Fund is current income exempt from federal income tax and the personal income taxes imposed by the Commonwealth of Pennsylvania consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
At October 31, 2000, the Fund for federal tax purposes, had a capital loss carryforward of $1,534, which will reduce the Fund's taxable income arising from the future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for Federal tax. Pursuant to the code, such capital loss carryforward will expire as follows:
|
Expiration Year |
|
Expiration Amount |
|
2001 |
|
$ 64 |
|
|
||
|
2005 |
|
$1,470 |
|
|
||
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees ("Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At October 31, 2000, capital paid-in aggregated $416,691,830.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
507,943,703 |
|
|
590,890,826 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
1,703,868 |
|
|
1,069,331 |
|
|
Shares redeemed |
|
(530,499,834 |
) |
|
(521,209,277 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
(20,852,263 |
) |
|
70,750,880 |
|
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
Shares sold |
|
910,504,908 |
|
|
886,863,203 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
1,558,214 |
|
|
1,700,459 |
|
|
Shares redeemed |
|
(917,031,927 |
) |
|
(1,027,605,705 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
(4,968,805 |
) |
|
(139,042,043 |
) |
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Cash Series Shares: |
|
|
|
|
|
|
|
Shares sold |
|
176,108,358 |
|
|
142,195,068 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
1,489,415 |
|
|
1,050,632 |
|
|
Shares redeemed |
|
(166,747,318 |
) |
|
(147,893,988 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM CASH SERIES SHARE TRANSACTIONS |
|
10,850,455 |
|
|
(4,648,288 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(14,970,613 |
) |
|
(72,939,451 |
) |
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Funds with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Cash Series Shares. The Plan provides that the Fund may incur distribution expenses up to 0.40% of the average daily net assets of the Cash Series Shares, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $756,135,000 and $833,775,000 respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 67.1% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 11.0% of total investments.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Pennsylvania Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations for the year then ended, the statements of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Pennsylvania Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations for the year then ended, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as they become available. To obtain the SAI, Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Pennsylvania Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N542
9101005A-SS (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and the income tax imposed by the Commonwealth of Virginia consistent with stability of principal by investing in a portfolio of short-term, high-quality Virginia tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 7
How to Purchase Shares 8
How to Redeem Shares 9
Account and Share Information 11
Who Manages the Fund? 12
Financial Information 12
Report of Ernst & Young LLP, Independent Auditors 25
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and the income tax imposed by the Commonwealth of Virginia 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.
The Fund invests in short-term, high-quality Virginia tax exempt securities. The Fund will invest so that at least 80% of its annual interest income is exempt from federal regular and Virginia state income tax or so that at least 80% of its net assets is invested in obligations, the interest income from which is exempt from federal regular and Virginia state income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Shares total returns on a calendar year-end basis.
The Fund's shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.85%.
Within the period shown in the Chart, the Fund's Institutional Shares highest quarterly return was 0.93% (quarter ended June 30, 1995). Its lowest quarterly return was 0.57% (quarter ended March 31, 1994).
The following table represents the Fund's Institutional Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.98% |
|
5 Years |
|
3.26% |
|
Start of Performance1 |
|
3.14% |
1 The Fund's Institutional Shares start of performance date was September 16, 1993.
The Fund's Institutional Shares 7-Day Net Yield as of December 31, 1999 was 4.17%. You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the Fund.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.40% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee3 |
|
0.25% |
|
Other Expenses |
|
0.21% |
|
Total Annual Fund Operating Expenses |
|
0.86% |
|
1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts during the fiscal year ended October 31, 2000. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waiver of Fund Expenses |
|
0.37% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.49% |
|
2 The adviser voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.28% for the fiscal year ended October 31, 2000. |
||
|
3 The shareholder services provider voluntarily waived the shareholder services fee. The shareholder services provider can terminate this voluntary waiver at any time. The shareholder services fee paid by the Fund's Institutional Shares (after the voluntary waiver) was 0.00% for the fiscal year ended October 31, 2000. |
||
This 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 shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
$ |
88 |
|
|
||
|
3 Years |
$ |
274 |
|
|
||
|
5 Years |
$ |
477 |
|
|
||
|
10 Years |
$ |
1,061 |
|
|
||
The Fund invests its assets in a portfolio of high-quality Virginia tax exempt securities maturing in 397 days or less. The Fund will invest so that at least 80% of its annual interest income is exempt from federal regular and Virginia state income tax or so that at least 80% of its net assets are invested in obligations, the interest income from which is exempt from federal regular and Virginia state income tax. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal and Virginia income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These services assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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 prices 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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Virginia issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Virginia, the Fund may be subject to additional risks compared to funds that invest in multiple states. Virginia's economy is strongly tied to government and defense-related industries and was adversely impacted by federal government downsizing. However, to counter the government and defense declines, the Commonwealth has actively and successfully pursued economic diversification; focusing particularly on high technology, trade and tourism.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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.
When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. 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.
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, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Virginia taxpayers because it invests in Virginia municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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.
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
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.
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.
You will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Virginia taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 25.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.04 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.04 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.81 |
% |
|
2.90 |
% |
|
3.26 |
% |
|
3.31 |
% |
|
3.24 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Expenses |
|
0.49 |
% |
|
0.49 |
% |
|
0.49 |
% |
|
0.49 |
% |
|
0.49 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.69 |
% |
|
2.87 |
% |
|
3.23 |
% |
|
3.26 |
% |
|
3.19 |
% |
|
|
|||||||||||||||
|
Expense waiver3 |
|
0.37 |
% |
|
0.35 |
% |
|
0.36 |
% |
|
0.36 |
% |
|
0.40 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$50,047 |
|
$34,562 |
|
$24,559 |
|
$24,382 |
|
$26,302 |
|
||||
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on NAV, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--99.6%1 |
|
|
|
|
|
|
|
Virginia--99.6% |
|
|
|
|
$ |
12,000,000 |
|
ABN AMRO MuniTOPS Certificates Trust (Virginia Non-AMT) (Series 1998-21), Weekly VRDNs (Norfolk, VA Water Revenue)/(FSA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) |
|
$ |
12,000,000 |
|
|
1,500,000 |
|
Alexandria, VA Redevelopment and Housing Authority, (Series 1996A), Weekly VRDNs (Glebe Park Apartments Project)/(KBC Bank N.V. LOC) |
|
|
1,500,000 |
|
|
2,450,000 |
|
Amelia County, VA IDA, (Series 1991), Weekly VRDNs (Chambers Waste Systems)/(Morgan Guaranty Trust Co., New York LOC) |
|
|
2,450,000 |
|
|
5,785,000 |
|
Arlington County, VA, (Series 2000), 5.05% BANs, 7/1/2001 |
|
|
5,785,904 |
|
|
4,500,000 |
|
Bedford County, VA IDA, (Series 1999), Weekly VRDNs (David R. Snowman and Carol J. Snowman)/(Crestar Bank of Virginia, Richmond LOC) |
|
|
4,500,000 |
|
|
1,610,000 |
|
Botetourt County, VA IDA, (Series 1995), Weekly VRDNs (Emkay Holdings LLC)/(State Street Bank and Trust Co. LOC) |
|
|
1,610,000 |
|
|
9,200,000 |
|
Campbell County, VA IDA Weekly VRDNs (Georgia-Pacific Corp.)/(SunTrust Bank, Atlanta LOC) |
|
|
9,200,000 |
|
|
7,120,000 |
|
Carroll County, VA IDA, IDRB (Series 1995),Weekly VRDNs (Kentucky Derby Hosiery Co., Inc., Project)/(Bank One, Kentucky LOC) |
|
|
7,120,000 |
|
|
1,275,000 |
|
Charlottesville, VA IDA, IDR Refunding Bonds, 4.75% TOBs (Safeway, Inc.)/(Bankers Trust Co., New York LOC), Mandatory Tender 12/1/2000 |
|
|
1,275,000 |
|
|
5,995,000 |
|
Chesapeake, VA IDA, Trust Receipts (Series 1998 FR/RI-C10), Weekly VRDNs (Sumitomo Machinery Corp. of America Corp.)/(Bank of America, N.A. SWP) |
|
|
5,995,000 |
|
|
1,800,000 |
|
Chesterfield County, VA IDA, (Series 1998), Weekly VRDNs (Lumberg, Inc.)/(Bank of America, N.A. LOC) |
|
|
1,800,000 |
|
|
5,800,000 |
|
Danville, VA IDA, (Series 1997), Weekly VRDNs (Diebold, Inc.)/ (Bank One, N.A. Ohio LOC) |
|
|
5,800,000 |
|
|
3,000,000 |
|
Dinwiddie County, VA IDA, (Series 1999A), Daily VRDNs (Chaparral Steel Co.)/(Bank of America, N.A. LOC) |
|
|
3,000,000 |
|
|
5,298,975 |
|
Equity Trust III, (1996 Series), Weekly VRDNs (Bayerische Hypotheken-und Vereinsbank AG LOC) |
|
|
5,298,975 |
|
|
6,800,000 |
|
Fairfax County, VA EDA, (Series 1995), Weekly VRDNs (American Society of Civil Engineers Foundation, Inc.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
6,800,000 |
|
|
6,850,000 |
|
Fairfax County, VA EDA, (Series A), 5.55% Bonds (Ogden Martin Systems of Fairfax, Inc.)/(AMBAC INS), 2/1/2001 |
|
|
6,868,150 |
|
|
11,000,000 |
|
Fairfax County, VA IDA, (Series1998A-35), Reg D, Weekly VRDNs (Fairfax Hospital System)/(Bayerische Hypotheken-und Vereinsbank AG LIQ)/(United States Treasury PRF)(@102) |
|
|
11,000,000 |
|
|
10,700,000 |
|
Falls Church, VA IDA, (Series 1985), 4.75% TOBs (Kaiser Permanente), Optional Tender 11/1/2000 |
|
|
10,700,000 |
|
|
7,113,000 |
|
Fluvanna County, VA IDA, (Series 1986), Weekly VRDNs (Thomasville Furniture Industries)/(UBS AG LOC) |
|
|
7,113,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Virginia--continued |
|
|
|
|
$ |
5,210,000 |
|
Frederick County, VA IDA, (Series 1997), Weekly VRDNs (Jouan, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
$ |
5,210,000 |
|
|
1,875,000 |
|
Halifax County, VA IDA, (Series 1998),Weekly VRDNs (Annin & Co., Inc.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
1,875,000 |
|
|
14,500,000 |
|
Halifax, VA IDA, MMMs, PCR, 4.40% CP (Virginia Electric Power Co.), Mandatory Tender 2/8/2001 |
|
|
14,500,000 |
|
|
7,500,000 |
|
Halifax, VA IDA, MMMs, PCR, 4.40% CP (Virginia Electric Power Co.), Mandatory Tender 2/9/2001 |
|
|
7,500,000 |
|
|
2,735,000 |
|
Hampton, VA IDA, (Series 1998), Weekly VRDNs (USA Waste Services, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
2,735,000 |
|
|
4,000,000 |
|
Hampton, VA Redevelopment & Housing Authority, (Series 1998), Weekly VRDNs (Township Apartments)/(AmSouth Bank N.A., Birmingham LOC) |
|
|
4,000,000 |
|
|
1,000,000 |
|
Hanover County, VA, 5.00% Bonds, 7/15/2001 |
|
|
1,004,378 |
|
|
6,000,000 |
|
Henrico County, VA EDA, (Series 2000), Weekly VRDNs (Westminster-Canterbury of Richmond)/(SunTrust Bank LOC) |
|
|
6,000,000 |
|
|
13,000,000 |
|
James City County, VA IDA, (Series 1997), Weekly VRDNs (Riverside Health System-Patriots Colony) |
|
|
13,000,000 |
|
|
6,500,000 |
|
Loudoun County, VA, (Series 1998), 4.70% TOBs (Signature Flight Support Corp.)/(Bayerische Landesbank Girozentrale LOC), Optional Tender 12/1/2000 |
|
|
6,500,000 |
|
|
2,610,000 |
|
Mecklenburg County, VA IDA, IDRB Weekly VRDNs (Harden Manufacturing Corp.)/(Columbus Bank and Trust Co., Georgia LOC) |
|
|
2,610,000 |
|
|
2,450,000 |
|
Mecklenburg County, VA IDA, IDRB Weekly VRDNs (Smith Land Holdings LLC)/(Columbus Bank and Trust Co., Georgia LOC) |
|
|
2,450,000 |
|
|
3,300,000 |
|
Metropolitan Washington, DC Airports Authority, (Series A), 4.40% CP, Mandatory Tender 1/11/2001 |
|
|
3,300,000 |
|
|
8,500,000 |
|
Metropolitan Washington, DC Airports Authority, 4.70% CP (Bank of America, N.A. LOC), Mandatory Tender 11/24/2000 |
|
|
8,500,000 |
|
|
4,750,000 |
|
New Kent County, VA, (Series 1999), Weekly VRDNs (Basic Construction Company LLC)/(SunTrust Bank LOC) |
|
|
4,750,000 |
|
|
3,795,000 |
|
Newport News, VA IDA, (Series 1997), Weekly VRDNs (Iceland Seafood Corp.)/(SunTrust Bank LOC) |
|
|
3,795,000 |
|
|
2,450,000 |
|
Newport News, VA Redevelopment & Housing Authority, Walker Village (Series 2000), 4.60% TOBs (FGIC INS), Mandatory Tender 4/1/2001 |
|
|
2,450,000 |
|
|
2,205,000 |
|
Newport News, VA, (Series A), 6.50% Bonds (United States Treasury PRF), 11/1/2000 (@102) |
|
|
2,249,100 |
|
|
5,000,000 |
|
Norfolk, VA Water Revenue, (Series 2000), 5.30% BANs, 6/30/2001 |
|
|
5,001,075 |
|
|
1,500,000 |
|
Portsmouth, VA Redevelopment and Housing Authority, (Series 2000), Weekly VRDNs (Yorkshire Square Townhouse Apartments)/(SunTrust Bank LOC) |
|
|
1,500,000 |
|
|
865,000 |
|
Pulaski County, VA IDA, (Series 1995), Weekly VRDNs (Balogh Real Estate LP Mar-Bal, Inc. Project)/(Bank One, N.A. Ohio LOC) |
|
|
865,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Virginia--continued |
|
|
|
|
$ |
845,000 |
|
Richmond, VA IDA, (Series 1997), Weekly VRDNs (PM Beef)/(U.S. Bank, N.A., Minneapolis LOC) |
|
$ |
845,000 |
|
|
4,200,000 |
|
Richmond, VA Redevelopment & Housing Authority Weekly VRDNs (Greystone Place Apartments)/(SunTrust Bank LOC) |
|
|
4,200,000 |
|
|
2,830,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series 1989), Weekly VRDNs (Belmont Apartment)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,830,000 |
|
|
10,500,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-1), Weekly, VRDNs (Richmond, VA Red Tobacco Row)/(Credit Suisse First Boston LOC) |
|
|
10,500,000 |
|
|
7,000,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-10),Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische Landesbank Girozentrale INV) |
|
|
7,000,000 |
|
|
6,000,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-2), Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische Landesbank Girozentrale INV) |
|
|
6,000,000 |
|
|
1,500,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-3B), Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische Landesbank Girozentrale INV) |
|
|
1,500,000 |
|
|
7,000,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-4), Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische Landesbank Girozentrale INV) |
|
|
7,000,000 |
|
|
3,160,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-5), Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische Landesbank Girozentrale INV) |
|
|
3,160,000 |
|
|
3,555,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-6), Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische Landesbank Girozentrale INV) |
|
|
3,555,000 |
|
|
7,000,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-9), Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische Landesbank Girozentrale INV) |
|
|
7,000,000 |
|
|
5,795,000 |
|
Richmond, VA Redevelopment & Housing Authority, Multi-Family Refunding Revenue Bonds (Series 1997), Weekly VRDNs (Newport Manor)/(Columbus Bank and Trust Co., Georgia LOC) |
|
|
5,795,000 |
|
|
1,800,000 |
|
Roanoke, VA IDA, (Series 1991A), 3.90% TOBs (NSW Corp.)/(Deutsche Bank AG LOC), Optional Tender 11/6/2000 |
|
|
1,800,000 |
|
|
1,200,000 |
|
Roanoke, VA IDA, (Series 1991B), 3.95% TOBs (NSW Corp.)/(Deutsche Bank AG LOC), Optional Tender 11/6/2000 |
|
|
1,200,000 |
|
|
8,485,000 |
|
Roanoke, VA IDA, Hospital Revenue Bonds (Series 1995C), Weekly VRDNs (Carilion Health System Obligated Group)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
8,485,000 |
|
|
1,585,000 |
|
Rockbridge County, VA IDA, IDR Bonds, 4.40% TOBs (Safeway, Inc.)/(Deutsche Bank AG LOC) 2/1/2001 |
|
|
1,585,000 |
|
|
2,320,000 |
|
South Hill, VA IDA, (Series 1997), Weekly VRDNs (International Veneer Co., Inc.)/(Bank One, Indiana, N.A. LOC) |
|
|
2,320,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Virginia--continued |
|
|
|
|
$ |
2,500,000 |
|
Staunton, VA IDA, (Series 1997), Weekly VRDNs (Diebold, Inc.)/(Bank One, N.A. Ohio LOC) |
|
$ |
2,500,000 |
|
|
1,840,000 |
|
Tazewell County, VA IDA, (Series 1993), Weekly VRDNs (Seville Properties Bluefield)/(Huntington National Bank, Columbus, OH LOC) |
|
|
1,840,000 |
|
|
7,200,000 |
|
Virginia Port Authority, 4.50% Bonds, 7/1/2001 |
|
|
7,205,183 |
|
|
9,920,000 |
|
Virginia Port Authority, MERLOTS (Series 1997M), Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
9,920,000 |
|
|
2,455,000 |
|
Virginia Resources Authority, Water and Sewer (Series 1997), Weekly VRDNs (Henrico County, VA)/(SunTrust Bank LIQ) |
|
|
2,455,000 |
|
|
4,245,000 |
|
Virginia Small Business Financing Authority Weekly VRDNs (Moses Lake Industries)/(KeyBank, N.A. LOC) |
|
|
4,245,000 |
|
|
2,000,000 |
|
Virginia Small Business Financing Authority, (Series 1999), Weekly VRDNs (Coral Graphic Services ao Virginia, Inc.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
2,000,000 |
|
|
1,320,000 |
|
Virginia State Housing Development Authority, (Series I), 5.05% Bonds, 5/1/2001 |
|
|
1,324,096 |
|
|
8,355,000 |
|
Virginia State Housing Development Authority, MERLOTS (Series 2000CC), Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
8,355,000 |
|
|
1,507,000 |
|
Williamsburg, VA IDA, (Series 1988), Weekly VRDNs (Colonial Williamsburg Foundation Museum)/(Bank of America, N.A. LOC) |
|
|
1,507,000 |
|
|
975,000 |
|
Winchester, VA IDA, (Series 1995), Weekly VRDNs (Midwesco Filter Resources, Inc. Project)/(Harris Trust & Savings Bank, Chicago LOC) |
|
|
975,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS ( AT AMORTIZED COST)2 |
|
$ |
326,711,861 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 67.5% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based On Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
100.00% |
|
0.00% |
|
|
||
2 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($328,025,651) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
AMT |
--Alternative Minimum Tax |
|
BANs |
--Bond Anticipation Notes |
|
CP |
--Commercial Paper |
|
EDA |
--Economic Development Authority |
|
FGIC |
--Financial Guaranty Insurance Company |
|
FSA |
--Financial Security Assurance |
|
IDA |
--Industrial Development Authority |
|
IDR |
--Industrial Development Revenue |
|
IDRB |
--Industrial Development Revenue Bond |
|
INS |
--Insured |
|
INV |
--Investment Agreement |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
MMMs |
--Money Market Municipals |
|
PCR |
--Pollution Control Revenue |
|
PRF |
--Prerefunded |
|
TOBs |
--Tender Option Bonds |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
326,711,861 |
|
Cash |
|
|
|
|
|
146,695 |
|
Income receivable |
|
|
|
|
|
2,303,434 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
329,161,990 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
802,086 |
|
|
|
|
Income distribution payable |
|
|
260,787 |
|
|
|
|
Accrued expenses |
|
|
73,466 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
1,136,339 |
|
|
||||||
|
Net assets for 328,025,651 shares outstanding |
|
|
|
|
$ |
328,025,651 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
$50,046,522 ÷ 50,046,522 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Institutional Service Shares: |
|
|
|
|
|
|
|
$277,979,129 ÷ 277,979,129 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
12,601,414 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
1,193,293 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
224,666 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
16,783 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
211,749 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
2,679 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,937 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
12,136 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
81,120 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
117,694 |
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
628,077 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
28,953 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
27,639 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
15,995 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
4,498 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
2,577,219 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(356,538 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(117,694 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(251,231 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(725,463 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
$ |
1,851,756 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
10,749,658 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
10,749,658 |
|
|
$ |
7,908,501 |
|
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(1,739,348 |
) |
|
|
(964,191 |
) |
|
Institutional Service Shares |
|
|
(9,010,310 |
) |
|
|
(6,944,310 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(10,749,658 |
) |
|
|
(7,908,501 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
1,186,153,615 |
|
|
|
1,226,749,956 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
8,107,524 |
|
|
|
5,827,519 |
|
|
Cost of shares redeemed |
|
|
(1,146,507,527 |
) |
|
|
(1,224,012,492 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
47,753,612 |
|
|
|
8,564,983 |
|
|
|
||||||||
|
Change in net assets |
|
|
47,753,612 |
|
|
|
8,564,983 |
|
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
280,272,039 |
|
|
|
271,707,056 |
|
|
|
||||||||
|
End of period |
|
$ |
328,025,651 |
|
|
$ |
280,272,039 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Effective February 1, 2000, Virginia Municipal Cash Trust (the "Fund") became a portfolio of Money Market Obligations Trust (the "Trust").The Trust is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Shares and Institutional Service Shares. The investment objective of the Fund is current income exempt from federal regular income tax and the income tax imposed by the Commonwealth of Virginia consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividends and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
At October 31, 2000, the Fund, for federal tax purposes, had a capital loss carryforward of $2,348, which will reduce the Fund's taxable income arising from the future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the code, such capital loss carryforward will expire as follows:
|
Expiration Year |
|
Expiration Amount |
|
2002 |
|
$1,190 |
|
|
||
|
2004 |
|
$1,158 |
|
|
||
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At October 31, 2000, capital paid-in aggregated $328,025,651.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
230,192,935 |
|
|
94,679,273 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
373,479 |
|
|
76,053 |
|
|
Shares redeemed |
|
(215,081,968 |
) |
|
(84,751,755 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
15,484,446 |
|
|
10,003,571 |
|
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
Shares sold |
|
955,960,680 |
|
|
1,132,070,683 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
7,734,045 |
|
|
5,751,466 |
|
|
Shares redeemed |
|
(931,425,559 |
) |
|
(1,139,260,737 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
32,269,166 |
|
|
(1,438,588 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
47,753,612 |
|
|
8,564,983 |
|
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Trust shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $595,135,600 and $532,580,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 49.5% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 6.2% of total investments.
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments of the Virginia Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations, the statement of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Virginia Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as it becomes available. To obtain the SAI, the Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Virginia Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N252
3080501A-IS (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Federated Investors
World-Class Investment Manager
A Portfolio of Money Market Obligations Trust
December 31, 2000
A money market mutual fund seeking to provide current income exempt from federal regular income tax and the income tax imposed by the Commonwealth of Virginia consistent with stability of principal by investing in a portfolio of short-term, high-quality Virginia tax exempt securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the Fund Invests? 5
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 7
How is the Fund Sold? 8
How to Purchase Shares 8
How to Redeem Shares 10
Account and Share Information 14
Who Manages the Fund? 15
Financial Information 15
Report of Ernst & Young LLP, Independent Auditors 29
The Fund is a money market fund that seeks to maintain a stable net asset value (NAV) of $1.00 per Share. The Fund's investment objective is to provide current income exempt from federal regular income tax and the income tax imposed by the Commonwealth of Virginia 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.
The Fund invests in short-term, high-quality Virginia tax exempt securities. The Fund will invest so that at least 80% of its annual interest income is exempt from federal regular and Virginia state income tax or so that at least 80% of its net assets is invested in obligations, the interest income from which is exempt from federal regular and Virginia state income tax. Interest from the Fund's investments may be subject to the federal alternative minimum tax for individuals and corporations (AMT). The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less.
All mutual funds take investment risks. Therefore, even though the Fund is a money market fund that seeks to maintain a stable NAV, it is possible to lose money by investing in the Fund. Because the Fund may invest a significant portion of its assets in securities of a single state, an investment in the Fund may involve additional risks compared to a fully diversified money market 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.
Historically, the Fund has maintained a constant $1.00 NAV per Share. The bar chart shows the variability of the Fund's Institutional Service Shares total returns on a calendar year-end basis.
The Fund's shares are sold without a sales charge (load). The total returns displayed above are based upon NAV.
The Fund's total return for the nine-month period from January 1, 2000 to September 30, 2000 was 2.74%.
Within the period shown in the Chart, the Fund's Institutional Service Shares highest quarterly return was 0.90% (quarter ended June 30, 1995). Its lowest quarterly return was 0.55% (quarter ended March 31, 1994).
The following table represents the Fund's Institutional Service Shares Average Annual Total Returns for the calendar periods ended December 31, 1999.
|
Calendar Period |
|
Fund |
|
1 Year |
|
2.83% |
|
5 Years |
|
3.12% |
|
Start of Performance1 |
|
3.01% |
1 The Fund's Institutional Service Shares start of performance date was September 16, 1993.
The Fund's Institutional Service Shares 7-Day Net Yield as of December 31, 1999 was 4.02%. You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides you with historical performance information so that you can analyze whether the Fund's investment risks are balanced by its potential returns.
This table describes the fees and expenses that you may pay if you buy and hold Institutional Service Shares of the Fund.
|
Shareholder Fees |
|
|
|
Fees Paid Directly From Your Investment |
|
|
|
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) |
|
None |
|
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable) |
|
None |
|
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price) |
|
None |
|
Redemption Fee (as a percentage of amount redeemed, if applicable) |
|
None |
|
Exchange Fee |
|
None |
|
|
|
|
|
Annual Fund Operating Expenses (Before Waivers)1 |
|
|
|
Expenses That are Deducted From Fund Assets (as a percentage of average net assets) |
|
|
|
Management Fee2 |
|
0.40% |
|
Distribution (12b-1) Fee |
|
None |
|
Shareholder Services Fee3 |
|
0.25% |
|
Other Expenses |
|
0.21% |
|
Total Annual Fund Operating Expenses |
|
0.86% |
|
1 Although not contractually obligated to do so, the adviser and shareholder services provider waived certain amounts during the fiscal year ended October 31, 2000. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended October 31, 2000. |
||
|
Total Waiver of Fund Expenses |
|
0.22% |
|
Total Actual Annual Fund Operating Expenses (after waivers) |
|
0.64% |
|
2 The adviser voluntarily waived a portion of the management fee. The adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.28% for the fiscal year ended October 31, 2000. |
||
|
3 The shareholder services provider voluntarily waived a portion of the shareholder services fee. The shareholder services provider can terminate this voluntary waiver at any time. The shareholder services fee paid by the Fund's Institutional Services Shares (after the voluntary waiver) was 0.15% for the fiscal year ended October 31, 2000. |
||
This Example is intended to help you compare the cost of investing in the Fund's Institutional Service Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Institutional Service Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's Institutional Service Shares operating expenses are before waivers as shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:
|
1 Year |
|
$ 88 |
|
|
||
|
3 Years |
|
$ 274 |
|
|
||
|
5 Years |
|
$ 477 |
|
|
||
|
10 Years |
|
$1,061 |
|
|
||
The Fund invests its assets in a portfolio of high-quality Virginia tax exempt securities maturing in 397 days or less. The Fund will invest so that at least 80% of its annual interest income is exempt from federal regular and Virginia state income tax or so that at least 80% of its net assets are invested in obligations, the interest income from which is exempt from federal regular and Virginia state income tax. Interest from the Fund's investments may be subject to AMT. The dollar-weighted average maturity of the Fund's portfolio will be 90 days or less. The Adviser actively manages the Fund's portfolio, seeking to limit the credit risk taken by the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list of issuers and securities that meet the Adviser's standard for minimal credit risk. The Adviser monitors the credit risks of all portfolio securities on an ongoing basis by reviewing periodic financial data and ratings of nationally recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate outlook and the tax exempt securities available. The Adviser formulates its interest rate outlook by analyzing a variety of factors such as current and expected U.S. economic growth; current and expected interest rates and inflation; and the Federal Reserve Board's monetary policy. The Adviser structures the portfolio by investing primarily in variable rate demand instruments and municipal notes. The Adviser generally shortens the portfolio's maturity when it expects interest rates to rise and extends the maturity when it expects interest rates to fall. This strategy seeks to enhance the returns from favorable interest rate changes and reduce the effect of unfavorable changes.
The Fund may temporarily depart from its principal investment strategies by investing its assets in cash and securities subject to federal and Virginia income tax. It may do this to minimize potential losses and maintain liquidity to meet shareholder redemptions during adverse market conditions. This may cause the Fund to receive and distribute taxable income to investors.
Tax exempt securities are fixed income securities that pay interest that is not subject to federal income taxes. 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.
Typically, states, counties, cities and other political subdivisions and authorities issue tax exempt securities. The market categorizes tax exempt securities by their source of repayment.
Variable rate demand instruments are tax exempt securities that require the issuer or a third party, such as a dealer or bank, to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. The Fund treats demand instruments as short-term securities, because their variable interest rate adjusts in response to changes in market rates, even though their stated maturity may extend beyond 397 days.
Municipal notes are short-term tax exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed income security if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser usually evaluates the credit risk of a fixed income security based solely upon its credit enhancement.
The securities in which the Fund invests must be rated in one of the two highest short-term rating categories by one or more NRSROs or be of comparable quality to securities having such ratings.
Credit risk is the possibility that an issuer will default on a security by failing to pay interest or principal when due. If an issuer defaults, the Fund will lose money. Money market funds try to minimize this risk by purchasing higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard & Poor's and Moody's Investors Service. These services assign ratings to securities by assessing the likelihood of issuer default. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely on the Adviser's credit assessment.
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 prices 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.
A substantial part of the Fund's portfolio may be comprised of securities issued by Virginia issuers or credit enhanced by banks or companies with similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities.
Since the Fund invests primarily in issuers from Virginia, the Fund may be subject to additional risks compared to funds that invest in multiple states. Virginia's economy is strongly tied to government and defense-related industries and was adversely impacted by federal government downsizing. However, to counter the government and defense declines, the Commonwealth has actively and successfully pursued economic diversification, focusing particularly on high technology, trade and tourism.
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is open. The Fund attempts to stabilize the 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.
When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next determined NAV. 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 $10,000. There is no required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $10,000 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.
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, Federated Securities Corp., markets the Shares described in this prospectus to financial institutions acting in an agency or fiduciary capacity, or to individuals, directly or through investment professionals. The Fund may not be a suitable investment for retirement plans or for non-Virginia taxpayers because it invests in Virginia municipal securities.
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).
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.
Investment professionals should send payments according to the instructions in the sections "By Wire" or "By 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 incurred by the Fund or Federated Shareholder Services Company, the Fund's transfer agent.
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.
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.
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.
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.
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.
You should redeem Shares:
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.
You may redeem Shares by simply calling the Fund at 1-800-341-7400.
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).
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:
Call your investment professional or the Fund if you need special instructions.
Signatures must be guaranteed if:
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.
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:
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.
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:
You will not accrue interest or dividends on uncashed checks from the Fund if those checks are undeliverable and returned to the Fund.
You may automatically redeem Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your investment professional or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
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.
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.
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.
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.
You will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
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.
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.
The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are exempt from federal income tax, although a portion of the Fund's dividends may not be exempt. Dividends may be subject to state and local taxes, although the Fund's dividends will be exempt from the Virginia taxes discussed above to the extent they are derived from interest on obligations exempt from such taxes. Capital gains and non-exempt dividends are taxable whether paid in cash or reinvested in the Fund. Redemptions are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.
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 176 mutual funds and separate accounts, which totaled approximately $125 billion in assets as of December 31, 1999. 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.
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.
The following Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, whose report, along with the Fund's audited financial statements, is included in this prospectus.
(For a Share Outstanding Throughout Each Period)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on page 29.
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
Net Asset Value, Beginning of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.04 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
0.03 |
|
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.04 |
) |
|
(0.03 |
) |
|
(0.03) |
|
|
(0.03) |
|
|
(0.03 |
) |
|
|
|||||||||||||||
|
Net Asset Value, End of Period |
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
$ 1.00 |
|
|
|
|||||||||||||||
|
Total Return2 |
|
3.65 |
% |
|
2.75 |
% |
|
3.11 |
% |
|
3.17 |
% |
|
3.14 |
% |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
0.64 |
% |
|
0.64 |
% |
|
0.64 |
% |
|
0.63 |
% |
|
0.59 |
% |
|
|
|||||||||||||||
|
Net investment income |
|
3.59 |
% |
|
2.71 |
% |
|
3.06 |
% |
|
3.12 |
% |
|
3.10 |
% |
|
|
|||||||||||||||
|
Expense waiver3 |
|
0.22 |
% |
|
0.20 |
% |
|
0.21 |
% |
|
0.23 |
% |
|
0.30 |
% |
|
|
|||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$277,979 |
|
|
$245,710 |
|
|
$247,149 |
|
|
$198,838 |
|
|
$177,575 |
|
|
|
|||||||||||||||
1 For the year ended October 31, 1999, the Fund was audited by Ernst & Young LLP. Each of the previous years was audited by other auditors.
2 Based on NAV, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--99.6%1 |
|
|
|
|
|
|
|
Virginia--99.6% |
|
|
|
|
$ |
12,000,000 |
|
ABN AMRO MuniTOPS Certificates Trust (Virginia Non-AMT) (Series 1998-21), Weekly VRDNs (Norfolk, VA Water Revenue)/(FSA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) |
|
$ |
12,000,000 |
|
|
1,500,000 |
|
Alexandria, VA Redevelopment and Housing Authority, (Series 1996A), Weekly VRDNs (Glebe Park Apartments Project)/(KBC Bank N.V. LOC) |
|
|
1,500,000 |
|
|
2,450,000 |
|
Amelia County, VA IDA, (Series 1991), Weekly VRDNs (Chambers Waste Systems)/(Morgan Guaranty Trust Co., New York LOC) |
|
|
2,450,000 |
|
|
5,785,000 |
|
Arlington County, VA, (Series 2000), 5.05% BANs, 7/1/2001 |
|
|
5,785,904 |
|
|
4,500,000 |
|
Bedford County, VA IDA, (Series 1999), Weekly VRDNs (David R. Snowman and Carol J. Snowman)/(Crestar Bank of Virginia, Richmond LOC) |
|
|
4,500,000 |
|
|
1,610,000 |
|
Botetourt County, VA IDA, (Series 1995), Weekly VRDNs (Emkay Holdings LLC)/(State Street Bank and Trust Co. LOC) |
|
|
1,610,000 |
|
|
9,200,000 |
|
Campbell County, VA IDA Weekly VRDNs (Georgia-Pacific Corp.)/(SunTrust Bank, Atlanta LOC) |
|
|
9,200,000 |
|
|
7,120,000 |
|
Carroll County, VA IDA, IDRB (Series 1995),Weekly VRDNs (Kentucky Derby Hosiery Co., Inc., Project)/(Bank One, Kentucky LOC) |
|
|
7,120,000 |
|
|
1,275,000 |
|
Charlottesville, VA IDA, IDR Refunding Bonds, 4.75% TOBs (Safeway, Inc.)/(Bankers Trust Co., New York LOC), Mandatory Tender 12/1/2000 |
|
|
1,275,000 |
|
|
5,995,000 |
|
Chesapeake, VA IDA, Trust Receipts (Series 1998 FR/RI-C10), Weekly VRDNs (Sumitomo Machinery Corp. of America Corp.)/(Bank of America, N.A. SWP) |
|
|
5,995,000 |
|
|
1,800,000 |
|
Chesterfield County, VA IDA, (Series 1998), Weekly VRDNs (Lumberg, Inc.)/(Bank of America, N.A. LOC) |
|
|
1,800,000 |
|
|
5,800,000 |
|
Danville, VA IDA, (Series 1997), Weekly VRDNs (Diebold, Inc.)/ (Bank One, N.A. Ohio LOC) |
|
|
5,800,000 |
|
|
3,000,000 |
|
Dinwiddie County, VA IDA, (Series 1999A), Daily VRDNs (Chaparral Steel Co.)/(Bank of America, N.A. LOC) |
|
|
3,000,000 |
|
|
5,298,975 |
|
Equity Trust III, (1996 Series), Weekly VRDNs (Bayerische Hypotheken-und Vereinsbank AG LOC) |
|
|
5,298,975 |
|
|
6,800,000 |
|
Fairfax County, VA EDA, (Series 1995), Weekly VRDNs (American Society of Civil Engineers Foundation, Inc.)/(Mellon Bank N.A., Pittsburgh LOC) |
|
|
6,800,000 |
|
|
6,850,000 |
|
Fairfax County, VA EDA, (Series A), 5.55% Bonds (Ogden Martin Systems of Fairfax, Inc.)/(AMBAC INS), 2/1/2001 |
|
|
6,868,150 |
|
|
11,000,000 |
|
Fairfax County, VA IDA, (Series1998A-35), Reg D, Weekly VRDNs (Fairfax Hospital System)/(Bayerische Hypotheken-und Vereinsbank AG LIQ)/(United States Treasury PRF)(@102) |
|
|
11,000,000 |
|
|
10,700,000 |
|
Falls Church, VA IDA, (Series 1985), 4.75% TOBs (Kaiser Permanente), Optional Tender 11/1/2000 |
|
|
10,700,000 |
|
|
7,113,000 |
|
Fluvanna County, VA IDA, (Series 1986), Weekly VRDNs (Thomasville Furniture Industries)/(UBS AG LOC) |
|
|
7,113,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Virginia--continued |
|
|
|
|
$ |
5,210,000 |
|
Frederick County, VA IDA, (Series 1997), Weekly VRDNs (Jouan, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
$ |
5,210,000 |
|
|
1,875,000 |
|
Halifax County, VA IDA, (Series 1998),Weekly VRDNs (Annin & Co., Inc.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
1,875,000 |
|
|
14,500,000 |
|
Halifax, VA IDA, MMMs, PCR, 4.40% CP (Virginia Electric Power Co.), Mandatory Tender 2/8/2001 |
|
|
14,500,000 |
|
|
7,500,000 |
|
Halifax, VA IDA, MMMs, PCR, 4.40% CP (Virginia Electric Power Co.), Mandatory Tender 2/9/2001 |
|
|
7,500,000 |
|
|
2,735,000 |
|
Hampton, VA IDA, (Series 1998), Weekly VRDNs (USA Waste Services, Inc.)/(Wachovia Bank of NC, N.A. LOC) |
|
|
2,735,000 |
|
|
4,000,000 |
|
Hampton, VA Redevelopment & Housing Authority, (Series 1998), Weekly VRDNs (Township Apartments)/(AmSouth Bank N.A., Birmingham LOC) |
|
|
4,000,000 |
|
|
1,000,000 |
|
Hanover County, VA, 5.00% Bonds, 7/15/2001 |
|
|
1,004,378 |
|
|
6,000,000 |
|
Henrico County, VA EDA, (Series 2000), Weekly VRDNs (Westminster-Canterbury of Richmond)/(SunTrust Bank LOC) |
|
|
6,000,000 |
|
|
13,000,000 |
|
James City County, VA IDA, (Series 1997), Weekly VRDNs (Riverside Health System-Patriots Colony) |
|
|
13,000,000 |
|
|
6,500,000 |
|
Loudoun County, VA, (Series 1998), 4.70% TOBs (Signature Flight Support Corp.)/(Bayerische Landesbank Girozentrale LOC), Optional Tender 12/1/2000 |
|
|
6,500,000 |
|
|
2,610,000 |
|
Mecklenburg County, VA IDA, IDRB Weekly VRDNs (Harden Manufacturing Corp.)/(Columbus Bank and Trust Co., Georgia LOC) |
|
|
2,610,000 |
|
|
2,450,000 |
|
Mecklenburg County, VA IDA, IDRB Weekly VRDNs (Smith Land Holdings LLC)/(Columbus Bank and Trust Co., Georgia LOC) |
|
|
2,450,000 |
|
|
3,300,000 |
|
Metropolitan Washington, DC Airports Authority, (Series A), 4.40% CP, Mandatory Tender 1/11/2001 |
|
|
3,300,000 |
|
|
8,500,000 |
|
Metropolitan Washington, DC Airports Authority, 4.70% CP (Bank of America, N.A. LOC), Mandatory Tender 11/24/2000 |
|
|
8,500,000 |
|
|
4,750,000 |
|
New Kent County, VA, (Series 1999), Weekly VRDNs (Basic Construction Company LLC)/(SunTrust Bank LOC) |
|
|
4,750,000 |
|
|
3,795,000 |
|
Newport News, VA IDA, (Series 1997), Weekly VRDNs (Iceland Seafood Corp.)/(SunTrust Bank LOC) |
|
|
3,795,000 |
|
|
2,450,000 |
|
Newport News, VA Redevelopment & Housing Authority, Walker Village (Series 2000), 4.60% TOBs (FGIC INS), Mandatory Tender 4/1/2001 |
|
|
2,450,000 |
|
|
2,205,000 |
|
Newport News, VA, (Series A), 6.50% Bonds (United States Treasury PRF), 11/1/2000 (@102) |
|
|
2,249,100 |
|
|
5,000,000 |
|
Norfolk, VA Water Revenue, (Series 2000), 5.30% BANs, 6/30/2001 |
|
|
5,001,075 |
|
|
1,500,000 |
|
Portsmouth, VA Redevelopment and Housing Authority, (Series 2000), Weekly VRDNs (Yorkshire Square Townhouse Apartments)/(SunTrust Bank LOC) |
|
|
1,500,000 |
|
|
865,000 |
|
Pulaski County, VA IDA, (Series 1995), Weekly VRDNs (Balogh Real Estate LP Mar-Bal, Inc. Project)/(Bank One, N.A. Ohio LOC) |
|
|
865,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Virginia--continued |
|
|
|
|
$ |
845,000 |
|
Richmond, VA IDA, (Series 1997), Weekly VRDNs (PM Beef)/(U.S. Bank, N.A., Minneapolis LOC) |
|
$ |
845,000 |
|
|
4,200,000 |
|
Richmond, VA Redevelopment & Housing Authority Weekly VRDNs (Greystone Place Apartments)/(SunTrust Bank LOC) |
|
|
4,200,000 |
|
|
2,830,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series 1989), Weekly VRDNs (Belmont Apartment)/(First Union National Bank, Charlotte, NC LOC) |
|
|
2,830,000 |
|
|
10,500,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-1), Weekly, VRDNs (Richmond, VA Red Tobacco Row)/(Credit Suisse First Boston LOC) |
|
|
10,500,000 |
|
|
7,000,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-10),Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische Landesbank Girozentrale INV) |
|
|
7,000,000 |
|
|
6,000,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-2), Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische Landesbank Girozentrale INV) |
|
|
6,000,000 |
|
|
1,500,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-3B), Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische Landesbank Girozentrale INV) |
|
|
1,500,000 |
|
|
7,000,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-4), Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische Landesbank Girozentrale INV) |
|
|
7,000,000 |
|
|
3,160,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-5), Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische Landesbank Girozentrale INV) |
|
|
3,160,000 |
|
|
3,555,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-6), Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische Landesbank Girozentrale INV) |
|
|
3,555,000 |
|
|
7,000,000 |
|
Richmond, VA Redevelopment & Housing Authority, (Series B-9), Weekly VRDNs (Richmond, VA Red Tobacco Row)/(Bayerische Landesbank Girozentrale INV) |
|
|
7,000,000 |
|
|
5,795,000 |
|
Richmond, VA Redevelopment & Housing Authority, Multi-Family Refunding Revenue Bonds (Series 1997), Weekly VRDNs (Newport Manor)/(Columbus Bank and Trust Co., Georgia LOC) |
|
|
5,795,000 |
|
|
1,800,000 |
|
Roanoke, VA IDA, (Series 1991A), 3.90% TOBs (NSW Corp.)/(Deutsche Bank AG LOC), Optional Tender 11/6/2000 |
|
|
1,800,000 |
|
|
1,200,000 |
|
Roanoke, VA IDA, (Series 1991B), 3.95% TOBs (NSW Corp.)/(Deutsche Bank AG LOC), Optional Tender 11/6/2000 |
|
|
1,200,000 |
|
|
8,485,000 |
|
Roanoke, VA IDA, Hospital Revenue Bonds (Series 1995C), Weekly VRDNs (Carilion Health System Obligated Group)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
8,485,000 |
|
|
1,585,000 |
|
Rockbridge County, VA IDA, IDR Bonds, 4.40% TOBs (Safeway, Inc.)/(Deutsche Bank AG LOC) 2/1/2001 |
|
|
1,585,000 |
|
|
2,320,000 |
|
South Hill, VA IDA, (Series 1997), Weekly VRDNs (International Veneer Co., Inc.)/(Bank One, Indiana, N.A. LOC) |
|
|
2,320,000 |
|
Principal |
|
|
|
Value |
||
|
|
|
|
SHORT-TERM MUNICIPALS--continued1 |
|
|
|
|
|
|
|
Virginia--continued |
|
|
|
|
$ |
2,500,000 |
|
Staunton, VA IDA, (Series 1997), Weekly VRDNs (Diebold, Inc.)/(Bank One, N.A. Ohio LOC) |
|
$ |
2,500,000 |
|
|
1,840,000 |
|
Tazewell County, VA IDA, (Series 1993), Weekly VRDNs (Seville Properties Bluefield)/(Huntington National Bank, Columbus, OH LOC) |
|
|
1,840,000 |
|
|
7,200,000 |
|
Virginia Port Authority, 4.50% Bonds, 7/1/2001 |
|
|
7,205,183 |
|
|
9,920,000 |
|
Virginia Port Authority, MERLOTS (Series 1997M), Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
9,920,000 |
|
|
2,455,000 |
|
Virginia Resources Authority, Water and Sewer (Series 1997), Weekly VRDNs (Henrico County, VA)/(SunTrust Bank LIQ) |
|
|
2,455,000 |
|
|
4,245,000 |
|
Virginia Small Business Financing Authority Weekly VRDNs (Moses Lake Industries)/(KeyBank, N.A. LOC) |
|
|
4,245,000 |
|
|
2,000,000 |
|
Virginia Small Business Financing Authority, (Series 1999), Weekly VRDNs (Coral Graphic Services ao Virginia, Inc.)/(Chase Manhattan Bank N.A., New York LOC) |
|
|
2,000,000 |
|
|
1,320,000 |
|
Virginia State Housing Development Authority, (Series I), 5.05% Bonds, 5/1/2001 |
|
|
1,324,096 |
|
|
8,355,000 |
|
Virginia State Housing Development Authority, MERLOTS (Series 2000CC), Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) |
|
|
8,355,000 |
|
|
1,507,000 |
|
Williamsburg, VA IDA, (Series 1988), Weekly VRDNs (Colonial Williamsburg Foundation Museum)/(Bank of America, N.A. LOC) |
|
|
1,507,000 |
|
|
975,000 |
|
Winchester, VA IDA, (Series 1995), Weekly VRDNs (Midwesco Filter Resources, Inc. Project)/(Harris Trust & Savings Bank, Chicago LOC) |
|
|
975,000 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS ( AT AMORTIZED COST)2 |
|
$ |
326,711,861 |
|
|
||||||
Securities that are subject to alternative minimum tax represent 67.5% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security.
At October 31, 2000, the portfolio securities were rated as follows:
Tier Rating Based On Total Market Value (Unaudited)
|
First Tier |
|
Second Tier |
|
100.00% |
|
0.00% |
|
|
||
2 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets ($328,025,651) at October 31, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
AMT |
--Alternative Minimum Tax |
|
BANs |
--Bond Anticipation Notes |
|
CP |
--Commercial Paper |
|
EDA |
--Economic Development Authority |
|
FGIC |
--Financial Guaranty Insurance Company |
|
FSA |
--Financial Security Assurance |
|
IDA |
--Industrial Development Authority |
|
IDR |
--Industrial Development Revenue |
|
IDRB |
--Industrial Development Revenue Bond |
|
INS |
--Insured |
|
INV |
--Investment Agreement |
|
LIQ |
--Liquidity Agreement |
|
LOC |
--Letter of Credit |
|
MBIA |
--Municipal Bond Investors Assurance |
|
MERLOTS |
--Municipal Exempt Receipts -- Liquidity Optional Tender Series |
|
MMMs |
--Money Market Municipals |
|
PCR |
--Pollution Control Revenue |
|
PRF |
--Prerefunded |
|
TOBs |
--Tender Option Bonds |
|
VRDNs |
--Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
October 31, 2000
|
Assets: |
|
|
|
|
|
|
|
Total investments in securities, at amortized cost and value |
|
|
|
|
$ |
326,711,861 |
|
Cash |
|
|
|
|
|
146,695 |
|
Income receivable |
|
|
|
|
|
2,303,434 |
|
|
||||||
|
TOTAL ASSETS |
|
|
|
|
|
329,161,990 |
|
|
||||||
|
Liabilities: |
|
|
|
|
|
|
|
Payable for shares redeemed |
|
$ |
802,086 |
|
|
|
|
Income distribution payable |
|
|
260,787 |
|
|
|
|
Accrued expenses |
|
|
73,466 |
|
|
|
|
|
||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
1,136,339 |
|
|
||||||
|
Net assets for 328,025,651 shares outstanding |
|
|
|
|
$ |
328,025,651 |
|
|
||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
Institutional Shares: |
|
|
|
|
|
|
|
$50,046,522 ÷ 50,046,522 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
|
Institutional Service Shares: |
|
|
|
|
|
|
|
$277,979,129 ÷ 277,979,129 shares outstanding |
|
|
|
|
|
$1.00 |
|
|
||||||
See Notes which are an integral part of the Financial Statements
Year Ended October 31, 2000
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
|
|
$ |
12,601,414 |
|
|
|||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
1,193,293 |
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
224,666 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
16,783 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
211,749 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
2,679 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
11,937 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
12,136 |
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
81,120 |
|
|
|
|
|
Shareholder services fee--Institutional Shares |
|
|
|
|
|
|
117,694 |
|
|
|
|
|
Shareholder services fee--Institutional Service Shares |
|
|
|
|
|
|
628,077 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
28,953 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
27,639 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
15,995 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
4,498 |
|
|
|
|
|
|
|||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
2,577,219 |
|
|
|
|
|
|
|||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(356,538 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Shares |
|
|
(117,694 |
) |
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Institutional Service Shares |
|
|
(251,231 |
) |
|
|
|
|
|
|
|
|
|
|||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(725,463 |
) |
|
|
|
|
|
|||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
1,851,756 |
|
|
|||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
$ |
10,749,658 |
|
|
|||||||||||
See Notes which are an integral part of the Financial Statements
|
Year Ended October 31 |
|
|
2000 |
|
|
|
1999 |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
10,749,658 |
|
|
$ |
7,908,501 |
|
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Institutional Shares |
|
|
(1,739,348 |
) |
|
|
(964,191 |
) |
|
Institutional Service Shares |
|
|
(9,010,310 |
) |
|
|
(6,944,310 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(10,749,658 |
) |
|
|
(7,908,501 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
1,186,153,615 |
|
|
|
1,226,749,956 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
8,107,524 |
|
|
|
5,827,519 |
|
|
Cost of shares redeemed |
|
|
(1,146,507,527 |
) |
|
|
(1,224,012,492 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
47,753,612 |
|
|
|
8,564,983 |
|
|
|
||||||||
|
Change in net assets |
|
|
47,753,612 |
|
|
|
8,564,983 |
|
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
280,272,039 |
|
|
|
271,707,056 |
|
|
|
||||||||
|
End of period |
|
$ |
328,025,651 |
|
|
$ |
280,272,039 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
October 31, 2000
Effective February 1, 2000, Virginia Municipal Cash Trust (the "Fund") became a portfolio of Money Market Obligations Trust (the "Trust").The Trust is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of 40 portfolios. The financial statements included herein are only those of the Fund. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Shares and Institutional Service Shares. The investment objective of the Fund is current income exempt from federal regular income tax and the income tax imposed by the Commonwealth of Virginia consistent with stability of principal.
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividends and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
At October 31, 2000, the Fund, for federal tax purposes, had a capital loss carryforward of $2,348, which will reduce the Fund's taxable income arising from the future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the code, such capital loss carryforward will expire as follows:
|
Expiration Year |
|
Expiration Amount |
|
2002 |
|
$1,190 |
|
|
||
|
2004 |
|
$1,158 |
|
|
||
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At October 31, 2000, capital paid-in aggregated $328,025,651.
Transactions in shares were as follows:
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Shares: |
|
|
|
|
|
|
|
Shares sold |
|
230,192,935 |
|
|
94,679,273 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
373,479 |
|
|
76,053 |
|
|
Shares redeemed |
|
(215,081,968 |
) |
|
(84,751,755 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS |
|
15,484,446 |
|
|
10,003,571 |
|
|
|
||||||
|
|
|
|
|
|
|
|
|
Year Ended October 31 |
|
2000 |
|
|
1999 |
|
|
Institutional Service Shares: |
|
|
|
|
|
|
|
Shares sold |
|
955,960,680 |
|
|
1,132,070,683 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
7,734,045 |
|
|
5,751,466 |
|
|
Shares redeemed |
|
(931,425,559 |
) |
|
(1,139,260,737 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS |
|
32,269,166 |
|
|
(1,438,588 |
) |
|
|
||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
47,753,612 |
|
|
8,564,983 |
|
|
|
||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Trust shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.
FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.
During the period ended October 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $595,135,000 and $532,580,000, respectively.
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at October 31, 2000, 49.5% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 6.2% of total investments.
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments of the Virginia Municipal Cash Trust (one of the portfolios constituting the Money Market Obligations Trust) as of October 31, 2000, and the related statement of operations, the statement of changes in net assets and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended October 31, 1998 were audited by other auditors whose report, dated December 23, 1998, expressed an unqualified opinion on those financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2000, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Virginia Municipal Cash Trust of the Money Market Obligations Trust at October 31, 2000, the results of its operations, the changes in its net assets, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States.
Ernst & Young LLP
Boston, Massachusetts
December 6, 2000
A Statement of Additional Information (SAI) dated December 31, 2000, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Semi-Annual Report to shareholders as it becomes available. To obtain the SAI, the Semi-Annual Report and other information without charge, and to make inquiries, call your investment professional or the Fund at 1-800-341-7400.
You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's Internet site at http://www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.
Federated
World-Class Investment Manager
Virginia Municipal Cash
Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N245
3080501A-SS (12/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
MONEY MARKET OBLIGATIONS TRUST
APPENDIX - BAR CHART DESCRIPTIONS
ARIZONA MUNICIPAL CASH TRUST -INSTITUTIONAL SERVICE SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Arizona Municipal Cash Trust -Institutional Service
Shares as of the calendar year-end for one year.
The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 3%.
The `x' axis represents calculation periods for the last calendar year of the
Fund's Institutional Service Shares. The light gray shaded chart features one
distinct vertical bar, shaded in charcoal, and visually representing by height
the total return percentage for the calendar year stated directly at its base.
The calculated total return percentage for the Fund's Institutional Shares for
the calendar year is stated directly at the top of the bar, for the calendar
year 1999. The percentage noted is 2.86%.
CONNECTICUT MUNICIPAL CASH TRUST
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Connecticut Municipal Cash Trust Institutional Service
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 6%.
The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's Institutional Service Shares start of business
through the calendar year ended 1999. 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 Fund's Institutional
Service Shares for each calendar year is stated directly at the top of each
respective bar, for the calendar years 1990 through 1999, The percentages noted
are 5.41%, 3.73%, 2.45%, 1.91%, 2.33%, 3.34%, 2.94%, 3.05%, 2.90% and 2.70%.
GEORGIA MUNICIPAL CASH TRUST
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Georgia Municipal Cash Trust, 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 4%.
The `x' axis represents calculation periods for the last four calendar years of
the Fund's Shares, beginning with the earliest year. 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 Fund's
Shares for each calendar year is stated directly at the top of each respective
bar, for the calendar years 1996 through 1999, The percentages noted are: 3.27%,
3.42%, 3.25% and 3.00%.
FLORIDA MUNICIPAL CASH TRUST -INSTITUTIONAL SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Florida Municipal Cash Trust -Institutional Shares, as
of the calendar year-end for each of five years.
The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 4%.
The `x' axis represents calculation periods for the last five calendar years of
the Fund's Institutional Shares, beginning with the earliest year. The light
gray shaded chart features five 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 Fund's Institutional Shares for each calendar year is stated
directly at the top of each respective bar, for the calendar years 1995 through
1999, The percentages noted are: 3.59%, 3.13%, 3.23%, 3.01% and 2.87%.
FLORIDA MUNICIPAL CASH TRUST -CASH II SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Florida Municipal Cash Trust -Cash II 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 3%.
The `x' axis represents calculation periods for the last five calendar years of
the Fund's Cash II Shares, beginning with the earliest year. 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 Fund's Cash II Shares for each calendar year is stated
directly at the top of each respective bar, for the calendar years 1996 through
1999, The percentages noted are: 2.95%, 2.97%, 2.74% and 2.61%.
MARYLAND MUNICIPAL CASH TRUST
The graphic presentation displayed here consists of a bar chart representing the
annual total returns for Maryland Municipal Cash Trust, as of the calendar
year-end for each of five years.
The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 4%.
The `x' axis represents calculation periods for the last five calendar years of
the Fund's Shares, beginning with the earliest year. The light gray shaded chart
features five 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 Fund's
Shares for each calendar year is stated directly at the top of each respective
bar, for the calendar years 1995 through 1999, The percentages noted are: 3.38%,
3.05%, 3.13%, 2.96% and 2.76%.
MASSACHUSETTS MUNICIPAL CASH TRUST-GALAXY BKB SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Massachusetts Municipal Cash Trust Galaxy-BKB Shares, as
of the calendar year-end for each of six years.
The `y' axis reflects the "% Total Return" beginning with "0%" and increasing in
increments of 5% up to 10%.
The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's Galaxy-BKB Shares start of business through the
calendar year ended 1999. The light gray shaded chart features six 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 Fund's Galaxy-BKB Shares for each
calendar year is stated directly at the top of each respective bar, for the
calendar years 1994 through 1999, The percentages noted are: 2.26%, 3.36%,
2.98%, 3.11%, 2.95%, and 2.77%.
MASSACHUSETTS MUNICIPAL CASH TRUST-INSTITUTIONAL SERVICE SHARES
The graphic presentation displayed here consists of a bar chart representing
the annual total returns of Massachusetts Municipal Cash Trust Institutional
Service Shares, as of the calendar year-end for each of nine years.
The `y' axis reflects the "% Total Return" beginning with "0%" and increasing in
increments of 1% up to 5%.
The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's Institutional Service Shares start of business
through the calendar year ended 1999. The light gray shaded chart features nine
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 Fund's Institutional
Service Shares for each calendar year is stated directly at the top of each
respective bar, for the calendar years 1991 through 1999, The percentages noted
are 4.32%, 2.60%, 1.92%, 2.34%, 3.40%, 3.00%, 3.13%, 2.97% and 2.78%.
MICHIGAN MUNICIPAL CASH TRUST-INSTITUTIONAL SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Michigan Municipal Cash Trust, Institutional Shares as
of the calendar year-end for each of three years.
The `y' axis reflects the "% Total Return" beginning with "0%" and increasing in
increments of 1% up to 4%.
The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's Institutional Shares start of business through
the calendar year ended 1999. The light gray shaded chart features three
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 Fund's Institutional
Shares for each calendar year is stated directly at the top of each respective
bar, for the calendar years 1997 through 1999, The percentages noted are: 3.47%,
3.28%,and 3.07%.
MICHIGAN MUNICIPAL CASH TRUST-INSTITUTIONAL SERVICE SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Michigan Municipal Cash Trust, 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 0.5% up to 3.5%.
The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's Institutional Service Shares start of business
through the calendar year ended 1999. 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 Fund's Institutional
Service Shares for each calendar year is stated directly at the top of each
respective bar, for the calendar years 1996 through 1999, The percentages noted
are: 3.18%, 3.31%, 3.11% and 2.91%.
MINNESOTA MUNICIPAL CASH TRUST -CASH SERIES SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns Minnesota Municipal Cash Trust -Cash Series Shares, as of
the calendar year-end for each of nine years.
The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 5%.
The `x' axis represents calculation periods for the last nine calendar years of
the Fund's Cash Series Shares, beginning with the earliest year. The light gray
shaded chart features nine 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 Fund's Cash Series Shares for each calendar year is stated
directly at the top of each respective bar, for the calendar years 1991 through
1999, The percentages noted are: 4.24%, 2.51%, 1.98%, 2.37%, 3.45%, 2.88%,
3.01%, 2.85%, and 2.64%.
MINNESOTA MUNICIPAL CASH TRUST -INSTITUTIONAL SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns Minnesota Municipal Cash Trust -Institutional Shares, as of
the calendar year-end for each of nine years.
The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 5%.
The `x' axis represents calculation periods for the last nine calendar years of
the Fund's Institutional Shares, beginning with the earliest year. The light
gray shaded chart features nine 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 Fund's Institutional Shares for each calendar year is stated
directly at the top of each respective bar, for the calendar years 1991 through
1999, The percentages noted are: 4.57%, 2.92%, 2.39%, 2.78%, 3.87%, 3.40%,
3.53%, 3.36%, and 3.15%.
NEW YORK MUNICIPAL CASH TRUST- INSTITUTIONAL SERVICE SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of New York Municipal Cash Trust, Institutional Service
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 6%.
The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's Institutional Service Shares start of business
through the calendar year ended 1999. 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 Fund's Institutional
Service Shares for each calendar year is stated directly at the top of each
respective bar, for the calendar years 1990 through 1999, The percentages noted
are: 5.52%, 4.30%, 2.75%, 2.10%, 2.57%, 3.59%, 3.17%, 3.30%, 3.11% and 2.89%.
NEW YORK MUNICIPAL CASH TRUST- CASH II SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of New York Municipal Cash Trust, Cash II Shares 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 4%.
The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's Cash II Shares start of business through the
calendar year ended 1999. 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 Fund's Cash II Shares for each
calendar year is stated directly at the top of each respective bar, for the
calendar years 1992 through 1999, The percentages noted are: 2.59%, 1.93%,
2.38%, 3.41%, 2.98%, 3.12%, 2.94% and 2.73%.
NEW JERSEY MUNICIPAL CASH TRUST-INSTITUTIONAL SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of New Jersey Municipal Cash Trust, Institutional Shares as
of the calendar year-end for each of nine years.
The `y' axis reflects the "% Total Return" beginning with "0%" and increasing in
increments of 1% up to 5%.
The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's Institutional Shares start of business through
the calendar year ended 1999. The light gray shaded chart features nine 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 Fund's Institutional Shares for
each calendar year is stated directly at the top of each respective bar, for the
calendar years 1991 through 1999, The percentages noted are: 4.20%, 2.71%,
2.16%, 2.46%, 3.51%, 3.10%, 3.23%, 3.03% and 2.84%.
NEW JERSEY MUNICIPAL CASH TRUST-INSTITUTIONAL SERVICE SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of New Jersey Municipal Cash Trust, Institutional Service
Shares as of the calendar year-end for each of nine years.
The `y' axis reflects the "% Total Return" beginning with "0%" and increasing in
increments of 0.5% up to 3.5%.
The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's Institutional Service Shares start of business
through the calendar year ended 1999. The light gray shaded chart features nine
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 Fund's Institutional
Service Shares for each calendar year is stated directly at the top of each
respective bar, for the calendar years 1991 through 1999, The percentages noted
are: 4.13%, 2.60%, 2.05%, 2.36%, 3.40%, 2.99%, 3.12%, 2.93% and 2.73%.
NORTH CAROLINA MUNICIPAL CASH TRUST
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of North Carolina Municipal Cash Trust as of the calendar
year-end for each of six years.
The `y' axis reflects the "% Total Return" beginning with "0%" and increasing in
increments of 1% up to 4%.
The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's start of business through the calendar year
ended 1999. The light gray shaded chart features six 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 Fund's for each calendar year is
stated directly at the top of each respective bar, for the calendar years 1994
through 1999, The percentages noted are: 2.63%, 3.55%, 3.16%, 3.27%, 3.09%, and
2.88%.
OHIO MUNICIPAL CASH TRUST- CASH II SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Ohio Municipal Cash Trust, Cash II Shares 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 0.5% up to 3.5%.
The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's Cash II Shares start of business through the
calendar year ended 1999. 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 Fund's Cash II Shares for each
calendar year is stated directly at the top of each respective bar, for the
calendar years 1992 through 1999, The percentages noted are: 2.64%, 1.97%,
2.30%, 3.35%, 2.88%, 3.02%, 2.83% and 2.66%.
OHIO MUNICIPAL CASH TRUST- INSTITUTIONAL SERVICE SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Ohio Municipal Cash Trust, Institutional Service Shares
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 4%.
The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's Institutional Service Shares start of business
through the calendar year ended 1999. 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 Fund's Institutional
Service Shares for each calendar year is stated directly at the top of each
respective bar, for the calendar years 1992 through 1999, The percentages noted
are: 2.95%, 2.27%, 2.61%, 3.66%, 3.19%, 3.33%, 3.13% and 2.97%.
OHIO MUNICIPAL CASH TRUST- INSTITUTIONAL SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Ohio Municipal Cash Trust, Institutional Shares as of
the calendar year-end for each of three years.
The `y' axis reflects the "% Total Return" beginning with "0%" and increasing in
increments of 1% up to 4%.
The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's Institutional Shares start of business through
the calendar year ended 1999. The light gray shaded chart features three
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 Fund's Institutional
Shares for each calendar year is stated directly at the top of each respective
bar, for the calendar years 1997 through 1999, The percentages noted are: 3.53%,
3.34% and 3.17%.
PENNSYLVANIA MUNICIPAL CASH TRUST -INSTITUTIONAL SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Pennsylvania Municipal Cash Trust -Institutional 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 4%. The `x' axis represents calculation periods for the
last four calendar years of the Fund's Institutional Shares, beginning with the
earliest year. 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 Fund's Institutional Shares for each
calendar year is stated directly at the top of each respective bar, for the
calendar years 1996 through 1999, The percentages noted are: 3.30%, 3.42%,
3.26%, and 3.01%.
PENNSYLVANIA MUNICIPAL CASH TRUST -INSTITUTIONAL SERVICE SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Pennsylvania Municipal Cash Trust -Institutional Service
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 6%.
The `x' axis represents calculation periods for the last ten calendar years of
the Fund's Institutional Service Shares, 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 Fund's Institutional Service Shares for each calendar year is
stated directly at the top of each respective bar, for the calendar years 1990
through 1999, The percentages noted are: 5.68%, 4.36%, 2.81%, 2.16%, 2.45%,
3.48%, 3.09%, 3.22%, 3.06% and 2.80%.
PENNSYLVANIA MUNICIPAL CASH TRUST -CASH SERIES SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Pennsylvania Municipal Cash Trust -Cash Series Shares,
as of the calendar year-end for each of nine years.
The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 5%.
The `x' axis represents calculation periods for the last nine calendar years of
the Fund's Cash Series Shares, beginning with the earliest year. The light gray
shaded chart features nine 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 Fund's Cash Series Shares for each calendar year is stated
directly at the top of each respective bar, for the calendar years 1991 through
1999, The percentages noted are: 4.16%, 2.40%, 1.76%, 2.04%, 3.06%, 2.68%,
2.81%, 2.65%, and 2.39%.
VIRGINIA MUNICIPAL CASH TRUST- INSTITUTIONAL SERVICE SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Virginia Municipal Cash Trust -Institutional Service
Shares, as of the calendar year-end for each of six years.
The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 4%.
The `x' axis represents calculation periods for the last six calendar years of
the Fund's Institutional Service Shares, beginning with the earliest year. The
light gray shaded chart features six 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 Fund's Institutional Service Shares for each calendar year is
stated directly at the top of each respective bar, for the calendar years 1994
through 1999, The percentages noted are: 2.60%, 3.49%, 3.07%, 3.21%, 3.02%, and
2.83%.
VIRGINIA MUNICIPAL CASH TRUST- INSTITUTIONAL SHARES
The graphic presentation displayed here consists of a bar chart representing the
annual total returns of Virginia Municipal Cash Trust -Institutional Shares, as
of the calendar year-end for each of six years.
The `y' axis reflects the "% Total Return" beginning with "0" and increasing in
increments of 1% up to 4%.
The `x' axis represents calculation periods for the last six calendar years of
the Fund's Institutional Service Shares, beginning with the earliest year. The
light gray shaded chart features six 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 Fund's Institutional Shares for each calendar year is stated
directly at the top of each respective bar, for the calendar years 1994 through
1999, The percentages noted are: 2.730%, 3.59%, 3.17%, 3.36%, 3.18%, and 2.98%.
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