AUTOMATED
TREASURY
CASH
RESERVES
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
OCTOBER 31, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
314186404
2112509 (12/94)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Investor:
I am pleased to present the Semi-Annual Report to Shareholders for Automated
Treasury Cash Reserves (the "Fund"), a portfolio of Federated Government Trust,
for the six-month period ended October 31, 1994. The report begins with our
Investment Review, in which the Fund's portfolio manager provides a brief
commentary on the short-term government market. Following the Investment Review
are the Financial Statements, which include the Portfolio of Investments.
On behalf of investors, the Fund pursues current income consistent with
stability of principal and liquidity, and a stable net asset value of $1.00 per
share*--all through a portfolio of U.S. Treasury obligations. At the end of the
reporting period, 71.8% of the Fund's net assets were invested in U.S. Treasury
bills, while the remaining net assets were invested in U.S. Treasury notes.
During the six-month reporting period, dividends paid to shareholders totaled
$3.4 million, or $0.02 per share. At the end of the reporting period, net assets
stood at $210 million.
Thank you for your confidence in the Fund. Your questions, comments, or
suggestions are always welcome.
Sincerely,
Glen R. Johnson
President
December 15, 1994
* No money market mutual fund can guarantee that a stable net asset value will
be maintained. An investment in the Fund is neither insured nor guaranteed by
the U.S. government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
The Fund, which is rated AAAm by Standard & Poor's Ratings Group ("Standard &
Poor's") and Aaa by Moody's Investors Service, Inc. ("Moody's"), invests only in
direct issues of the U.S. Treasury.* The Fund was created to meet the needs of
tax-sensitive investors in states which consider income from all repurchase
agreements as taxable. Therefore, the Fund's acceptable investments do not
include repurchase agreements, and liquidity is maintained by including a
laddered position of short-term Treasury securities, which are typically
Treasury bills.
During the semi-annual reporting period, the Federal Reserve Board (the "Fed")
continued along the path of tighter monetary policy that it embarked on in early
February 1994 by raising the Federal Funds' target rate by an additional 100
basis points over the reporting period, bringing the rate from 3.75% to 4.75%.
Short rates led the moves by the Fed upward, with the rate on the three-month
Treasury bill rising from 4% at the end of April to 5.15% at the end of October.
At that time, another tightening by the Fed was already being anticipated by the
market, a move which was partially reflected in the level of short-term interest
rates. In fact, in mid-November, faced with persistent strength in the economy
and upward pressures on resource utilization, the Fed moved aggressively to
tighten monetary policy by moving the Fed Funds' target rate up a full 75 basis
points to 5.50%.
Recently, the Fund has been managed within a conservative 30-40 day average
maturity target range, reflecting our expectation of policy moves by the Fed.
The Fund's Treasury note position increased slightly relative to Treasury bills,
in order to take advantage of more attractive spreads available in that area.
The Fund is likely to continue to be managed with a conservative stance in the
near future, with the portfolio seeking to maximize performance through relative
value analysis, in light of the presence of early warning signs of inflation and
the expectation of further tightenings by the Fed. However, changing economic
and market developments are continuously being monitored in order to best serve
our clients attracted to the short-term Treasury market.
* These ratings are obtained after Standard & Poor's and Moody's evaluates a
number of factors, including credit quality, market price exposure, and
management. They monitor the portfolio weekly for developments that could
cause changes in ratings.
AUTOMATED TREASURY CASH RESERVES
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------------- ------------
<C> <C> <S> <C>
U.S. TREASURY OBLIGATIONS--99.4%
- -------------------------------------------------------------------------------------
* U.S. TREASURY BILLS--71.8%
-----------------------------------------------------------------
$ 2,900,000 4.55%-4.57%, 11/3/94 $ 2,899,282
-----------------------------------------------------------------
1,900,000 4.53%, 11/10/94 1,897,896
-----------------------------------------------------------------
18,800,000 4.72%-4.73%, 11/17/94 18,761,351
-----------------------------------------------------------------
13,000,000 4.66%-4.67%, 11/25/94 12,960,467
-----------------------------------------------------------------
19,050,000 4.62%-4.72%, 12/1/94 18,977,200
-----------------------------------------------------------------
24,600,000 4.64%-4.92%, 12/8/94 24,479,701
-----------------------------------------------------------------
6,100,000 4.71%-4.83%, 12/15/94 6,065,112
-----------------------------------------------------------------
23,700,000 4.88%-4.91%, 12/22/94 23,539,633
-----------------------------------------------------------------
19,200,000 4.90%-4.92%, 1/5/95 19,033,770
-----------------------------------------------------------------
22,400,000 5.07%-5.10%, 1/19/95 22,156,613
----------------------------------------------------------------- ------------
Total 150,771,025
----------------------------------------------------------------- ------------
U.S. TREASURY NOTES--27.6%
-----------------------------------------------------------------
38,000,000 6.00%-8.25%, 11/15/94 38,031,582
-----------------------------------------------------------------
20,000,000 4.625%, 11/30/94 19,998,030
----------------------------------------------------------------- ------------
Total 58,029,612
----------------------------------------------------------------- ------------
TOTAL INVESTMENTS, AT AMORTIZED COST $208,800,637+
----------------------------------------------------------------- ------------
</TABLE>
* Each issue shows the rate of discount at the time of purchase.
+ Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($210,052,223) at October 31, 1994.
(See Notes which are an integral part of the Financial Statements)
AUTOMATED TREASURY CASH RESERVES
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments, at amortized cost and value $208,800,637
- --------------------------------------------------------------------------------
Cash 1,924,039
- --------------------------------------------------------------------------------
Interest receivable 1,619,167
- --------------------------------------------------------------------------------
Deferred expenses 7,645
- -------------------------------------------------------------------------------- ------------
Total assets 212,351,488
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for Fund shares redeemed $1,900,000
- -------------------------------------------------------------------
Dividends payable 291,365
- -------------------------------------------------------------------
Accrued expenses 107,900
- ------------------------------------------------------------------- ----------
Total liabilities 2,299,265
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 210,052,223 shares of beneficial interest outstanding $210,052,223
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share
($210,052,223 / 210,052,223 shares of beneficial interest outstanding) $1.00
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
AUTOMATED TREASURY CASH RESERVES
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------
Interest income $3,880,273
- ---------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------
Investment advisory fee $459,169
- ----------------------------------------------------------------------
Trustees' fees 1,913
- ----------------------------------------------------------------------
Administrative personnel and services fee 72,303
- ----------------------------------------------------------------------
Custodian and recordkeeping fees and expenses 55,266
- ----------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 13,083
- ----------------------------------------------------------------------
Shareholder services fees 185,307
- ----------------------------------------------------------------------
Fund share registration costs 6,331
- ----------------------------------------------------------------------
Legal fees 3,863
- ----------------------------------------------------------------------
Auditing fees 6,678
- ----------------------------------------------------------------------
Printing and postage 1,913
- ----------------------------------------------------------------------
Insurance premiums 3,948
- ----------------------------------------------------------------------
Miscellaneous 12,023
- ---------------------------------------------------------------------- --------
Total expenses 821,797
- ----------------------------------------------------------------------
Deduct--Waiver of investment advisory fee 305,665
- ---------------------------------------------------------------------- --------
Net expenses 516,132
- --------------------------------------------------------------------------------- ----------
Net investment income $3,364,141
- --------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
AUTOMATED TREASURY CASH RESERVES
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
---------------------------------
1995* 1994
------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------------
Net investment income $ 3,364,141 $ 6,862,541
- ------------------------------------------------------------ ------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------------
Dividends to shareholders from net investment income (3,364,141) (6,862,541)
- ------------------------------------------------------------ ------------- ---------------
FUND SHARE (PRINCIPAL) TRANSACTIONS--
- ------------------------------------------------------------
Proceeds from sale of shares 349,195,734 1,219,200,090
- ------------------------------------------------------------
Net asset value of shares issued to shareholders
in payment of dividends declared 2,195,692 6,163,198
- ------------------------------------------------------------
Cost of shares redeemed (332,178,977) (1,287,478,391)
- ------------------------------------------------------------ ------------- ---------------
Change in net assets from Fund share transactions 19,212,449 (62,115,103)
- ------------------------------------------------------------ ------------- ---------------
Change in net assets 19,212,449 (62,115,103)
- ------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------
Beginning of period 190,839,774 252,954,877
- ------------------------------------------------------------ ------------- ---------------
End of period $ 210,052,223 $ 190,839,774
- ------------------------------------------------------------ ------------- ---------------
</TABLE>
* Six months ended October 31, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
AUTOMATED TREASURY CASH RESERVES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
-------------------------------------------
1995** 1994 1993 1992***
----- ----- ----- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------
Net investment income 0.02 0.03 0.03 0.03
- ---------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------
Dividends to shareholders from
net investment income (0.02) (0.03) (0.03) (0.03)
- --------------------------------------------- ----- ----- ----- ------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00
- --------------------------------------------- ----- ----- ----- ------
TOTAL RETURN* 1.84% 2.58% 2.88% 3.07%
- ---------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------
Expenses 0.56%(b) 0.57% 0.39% 0.51%(b)
- ---------------------------------------------
Net investment income 3.66%(b) 2.55% 2.79% 3.84%(b)
- ---------------------------------------------
Expense waiver/reimbursement(a) 0.33%(b) 0.13% 0.53% 0.30%(b)
- ---------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------
Net assets, end of period (000 omitted) $210,052 $190,840 $252,955 $36,803
- ---------------------------------------------
</TABLE>
* Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
** Six months ended October 31, 1994 (unaudited).
*** Reflects operations for the period from August 9, 1991 (date of initial
public investment) to April 30, 1992.
(a) This voluntary expense decrease is reflected in both the expenses and net
investment income ratios shown above.
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
AUTOMATED TREASURY CASH RESERVES
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Government 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 three diversified portfolios. The
financial statements included herein present only those of Automated Treasury
Cash Reserves (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.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
<TABLE>
<S> <C>
A. INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value its portfolio
securities is in accordance with Rule 2a-7 under the Act.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses are accrued
daily. Bond premium and discount, if applicable, are amortized as required by the
Internal Revenue Code, as amended (the "Code"). Distributions to shareholders are
recorded on the ex-dividend date.
C. 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 taxable income. Accordingly, no provisions for federal tax are
necessary.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in when-issued or
delayed delivery transactions. The Fund record when-issued securities 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.
E. DEFERRED EXPENSES--The costs incurred by the Fund with respect to registration of its
shares in its first fiscal year, excluding the initial expense or registering the shares,
have been deferred and are being amortized using the straight-line method, not to exceed
a period of five years from the Fund's commencement date.
F. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
AUTOMATED TREASURY CASH RESERVES
- --------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Board of Trustees (the "Trustees") to issue
an unlimited number of full and fractional shares of beneficial interest
(without par value). At October 31, 1994, capital paid in aggregated
$210,052,223. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
-------------------------------
1995* 1994
- -------------------------------------------------------------- ------------ --------------
<S> <C> <C>
Shares sold 349,195,734 1,219,200,090
- --------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 2,195,692 6,163,198
- --------------------------------------------------------------
Shares redeemed (332,178,977) (1,287,478,391)
- -------------------------------------------------------------- ------------ --------------
Net change resulting from Fund share transactions 19,212,449 (62,115,103)
- -------------------------------------------------------------- ------------ --------------
</TABLE>
* Six months ended October 31, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to 0.50 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive a portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATION FEE--Federated Administrative Services ("FAS") provides the Fund
with administrative and personnel services. The FAS is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during the
period of the Administrative Services Agreement shall be at least $125,000 per
portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain personal services for shareholders and to maintain the shareholder
accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEE--Federated Services Company ("FServ")
serves as transfer and dividend disbursing agent for the Fund. The FServ fee is
based on the size, type, and number of accounts and transactions made by
shareholders.
Certain of the Officers and Trustees of the Fund are Officers and Directors or
Trustees of the above companies.
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- ---------------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Glen R. Johnson
James E. Dowd President
Lawrence D. Ellis, M.D. J. Christopher Donahue
Edward L. Flaherty, Jr. Vice President
Glen R. Johnson Richard B. Fisher
Peter E. Madden Vice President
Gregor F. Meyer Edward C. Gonzales
Wesley W. Posvar Vice President and Treasurer
Marjorie P. Smuts John W. McGonigle
Vice President and Secretary
David M. Taylor
Assistant Treasurer
Robert C. Rosselot
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses, and other information.
AUTOMATED
GOVERNMENT
CASH
RESERVES
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
OCTOBER 31, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
314186107
0112708 (12/94)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Investor:
I am pleased to present the Semi-Annual Report to Shareholders for Automated
Government Cash Reserves (the "Fund"), a portfolio of Federated Government
Trust, for the six-month period ended October 31, 1994. The report begins with
our Investment Review, in which the Fund's portfolio manager provides a brief
commentary on the short-term government market. Following the Investment Review
are the Financial Statements, which include the Portfolio of Investments.
On behalf of investors, the Fund pursues current income consistent with
stability of principal and liquidity, and a stable net asset value of $1.00 per
share.* It invests exclusively in a portfolio of securities issued or guaranteed
by the U.S. government or its agencies.
During the six-month reporting period, dividends paid to shareholders totaled
$8.5 million, or $0.02 per share. At the end of the reporting period, the Fund's
net assets stood at $494.8 million.
Thank you for selecting the Fund as a high-quality cash investment. As always,
we welcome your questions, comments, or suggestions.
Sincerely,
Glen R. Johnson
President
December 15, 1994
* No money market mutual fund can guarantee that a stable net asset value will
be maintained. An investment in the Fund is neither insured nor guaranteed by
the U.S. government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
The Fund, which is rated AAAm by Standard & Poor's Ratings Group ("Standard &
Poor's") and Aaa by Moody's Investors Service, Inc. ("Moody's"), is invested
only in direct issues of the U.S. Treasury and government securities, whose
interest is exempt from various states' personal income tax, if owned directly.*
The Fund's acceptable investments do not include repurchase agreements in order
to meet the needs of tax-sensitive investors in states which consider income
from all repurchase agreements as taxable. The Fund continues to emphasize
issues of the Student Loan Marketing Association, Federal Farm Credit Bank, and
Federal Home Loan Bank.
During the semi-annual reporting period, the Federal Reserve Board (the "Fed")
continued along the path of tighter monetary policy that it embarked on in early
February 1994 by raising the Federal Funds' target rate by an additional 100
basis points over the reporting period, bringing the rate from 3.75% to 4.75%.
Short rates led the moves by the Fed upward, with the rate on the three-month
Treasury bill rising from 4% at the end of April to 5.15% at the end of October.
At that time, another tightening by the Fed was already being anticipated by the
market, a move which was partially reflected in the level of short-term interest
rates. In fact, in mid-November, faced with persistent strength in the economy
and upward pressures on resource utilization, the Fed moved aggressively to
tighten monetary policy by moving the Fed Funds' target rate up a full 75 basis
points to 5.50%.
Recently, the Fund has been managed within a conservative 30-40 day average
maturity target range, reflecting our expectation of the policy moves by the
Fed. The Fund increased its position in agency floating rate securities over the
reporting period to enhance the Fund's responsiveness to changes in short-term
interest rates. The Fund is likely to continue to be managed with a conservative
stance in the near future, with the portfolio seeking to maximize performance
through relative value analysis, in light of the presence of early warning signs
of inflation and the expectation of further tightenings by the Fed. However,
changing economic and market developments are continuously being monitored in
order to best serve our clients attracted to the short-term government market.
* These ratings are obtained after Standard & Poor's and Moody's evaluates a
number of factors, including credit quality, market price exposure, and
management. They monitor the portfolio weekly for developments that could
cause changes in ratings.
AUTOMATED GOVERNMENT CASH RESERVES
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ --------------------------------------------------------------- ------------
<C> <C> <S> <C>
SHORT-TERM U.S. GOVERNMENT AND AGENCY OBLIGATIONS--100.0%
- -----------------------------------------------------------------------------------
$ 87,000,000 * Federal Farm Credit Bank, Discount Notes, 4.72%-5.60%,
11/7/94-6/9/95 $ 86,550,124
--------------------------------------------------------------- ------------
126,160,000 * Federal Home Loan Bank, Discount Notes, 4.69%-5.83%,
11/4/94-7/17/95 124,841,829
--------------------------------------------------------------- ------------
4,000,000 Federal Home Loan Bank Notes, Floating Rate Notes, 4.80%,
10/6/95 3,997,836
--------------------------------------------------------------- ------------
133,950,000 ** Student Loan Marketing Association, Floating Rate Notes,
5.21%-5.81%, 11/1/94 134,096,535
--------------------------------------------------------------- ------------
85,200,000 ** Student Loan Marketing Association, Floating Rate Master Notes,
5.16%, 11/1/94 85,200,000
--------------------------------------------------------------- ------------
32,000,000 * Tennessee Valley Authority, Discount Notes, 4.82%-4.95%,
11/1/94-12/1/94 31,920,575
--------------------------------------------------------------- ------------
17,500,000 * U.S. Treasury Bills, 3.53%-5.55%, 11/17/94-6/29/95 17,169,010
--------------------------------------------------------------- ------------
11,000,000 U.S. Treasury Notes, 5.50%-8.25%, 11/15/94-2/15/95 11,015,945
--------------------------------------------------------------- ------------
TOTAL INVESTMENTS, AT AMORTIZED COST $494,791,854+
--------------------------------------------------------------- ------------
</TABLE>
* Each issue shows the rate of discount at the time of purchase.
** Current rate and next reset date shown.
+ Also represents cost for federal tax purposes.
Note: The category of investments is shown as a percentage of net assets
($494,837,702) at October 31, 1994.
(See Notes which are an integral part of the Financial Statements)
AUTOMATED GOVERNMENT CASH RESERVES
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments, at amortized cost and value $494,791,854
- --------------------------------------------------------------------------------
Interest receivable 1,643,236
- --------------------------------------------------------------------------------
Deferred expenses 615
- -------------------------------------------------------------------------------- ------------
Total assets 496,435,705
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Dividends payable $1,465,453
- -------------------------------------------------------------------
Payable for Fund shares redeemed 20,605
- -------------------------------------------------------------------
Accrued expenses 111,945
- ------------------------------------------------------------------- ----------
Total liabilities 1,598,003
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 494,837,702 shares of beneficial interest outstanding $494,837,702
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share
($494,837,702 / 494,837,702 shares of beneficial interest outstanding) $1.00
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
AUTOMATED GOVERNMENT CASH RESERVES
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------
Interest income $9,778,525
- ----------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------
Investment advisory fee $1,090,545
- ---------------------------------------------------------------------
Trustees' fees 4,042
- ---------------------------------------------------------------------
Administrative personnel and services fees 165,108
- ---------------------------------------------------------------------
Custodian and recordkeeping fees and expenses 74,150
- ---------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 13,085
- ---------------------------------------------------------------------
Shareholder services fees 545,272
- ---------------------------------------------------------------------
Fund share registration costs 6,819
- ---------------------------------------------------------------------
Legal fees 17,355
- ---------------------------------------------------------------------
Auditing fees 8,588
- ---------------------------------------------------------------------
Printing and postage 4,222
- ---------------------------------------------------------------------
Insurance premiums 6,423
- ---------------------------------------------------------------------
Miscellaneous 2,225
- --------------------------------------------------------------------- ----------
Total expenses 1,937,834
- ---------------------------------------------------------------------
Deduct--Waiver of investment advisory fee 672,802
- --------------------------------------------------------------------- ----------
Net expenses 1,265,032
- ---------------------------------------------------------------------------------- ----------
Net investment income $8,513,493
- ---------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
AUTOMATED GOVERNMENT CASH RESERVES
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
---------------------------------
1995* 1994
------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------------
Net investment income $ 8,513,493 $ 12,247,939
- ------------------------------------------------------------ ------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------------
Dividends to shareholders from net investment income (8,513,493) (12,247,939)
- ------------------------------------------------------------ ------------- ---------------
FUND SHARE (PRINCIPAL) TRANSACTIONS--
- ------------------------------------------------------------
Proceeds from sale of shares 901,174,573 1,616,918,441
- ------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of dividends declared 1,309,800 2,166,619
- ------------------------------------------------------------
Cost of shares redeemed (865,591,023) (1,557,510,495)
- ------------------------------------------------------------ ------------- ---------------
Change in net assets from Fund share transactions 36,893,350 61,574,565
- ------------------------------------------------------------ ------------- ---------------
Change in net assets 36,893,350 61,574,565
- ------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------
Beginning of period 457,944,352 396,369,787
- ------------------------------------------------------------ ------------- ---------------
End of period $ 494,837,702 $ 457,944,352
- ------------------------------------------------------------ ------------- ---------------
</TABLE>
* Six months ended October 31, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
AUTOMATED GOVERNMENT CASH RESERVES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
--------------------------------------------------------------------
1995** 1994 1993 1992 1991 1990***
------ ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------
INCOME FROM INVESTMENT
OPERATIONS
- ---------------------------------
Net investment income 0.02 0.03 0.03 0.05 0.07 0.02
- ---------------------------------
LESS DISTRIBUTIONS
- ---------------------------------
Dividends to shareholders from
net investment income (0.02 ) (0.03) (0.03) (0.05) (0.07) (0.02)
- --------------------------------- ------ ----- ----- ----- ----- -------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------- ------ ----- ----- ----- ----- ------
TOTAL RETURN* 1.98 % 2.77% 2.92% 4.79% 7.20% 1.93%
- ---------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------
Expenses 0.58 %(b) 0.57% 0.57% 0.58% 0.55% 0.32%(b)
- ---------------------------------
Net investment income 3.90 %(b) 2.75% 2.87% 4.58% 6.70% 8.02%(b)
- ---------------------------------
Expenses waiver/
reimbursement(a) 0.31 %(b) 0.09% 0.08% 0.14% 0.30% 0.89%(b)
- ---------------------------------
SUPPLEMENTAL DATA
- ---------------------------------
Net assets, end of period
(000 omitted) $494,838 $457,944 $396,370 $308,625 $206,694 $34,053
- ---------------------------------
</TABLE>
* Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, is applicable.
** Six months ended October 31, 1994 (unaudited).
*** Reflects operations for the period from February 15, 1990 (date of initial
public investment) to April 30, 1990.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
AUTOMATED GOVERNMENT CASH RESERVES
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Government 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 three diversified portfolios. The
financial statements included herein present only those of Automated Government
Cash Reserves (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.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
<TABLE>
<S> <C>
A. INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value its portfolio
securities is in accordance with Rule 2a-7 under the Act.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses are accrued
daily. Bond premium and discount, if applicable, are amortized as required by the
Internal Revenue Code, as amended (the "Code"). Distributions to shareholders are
recorded on the ex-dividend date.
C. 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 taxable income. Accordingly, no provisions for federal income
tax are necessary.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in when-issued or
delayed delivery transactions. The Fund records when-issued securities 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.
E. DEFERRED EXPENSES--The costs incurred by the Fund with respect to registration of its
shares in its first fiscal year, excluding the initial expense of registering the shares,
have been deferred and are being amortized using the straight-line method, not to exceed
a period of five years from the Fund's commencement date.
F. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
AUTOMATED GOVERNMENT CASH RESERVES
- --------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Board of Trustees (the "Trustees") to issue
an unlimited number of full and fractional shares of beneficial interest
(without par value). At October 31, 1994, capital paid in aggregated
$494,837,702. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
-------------------------------
1995* 1994
- -------------------------------------------------------------- ------------ --------------
<S> <C> <C>
Shares sold 901,174,573 1,616,918,441
- --------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 1,309,800 2,166,619
- --------------------------------------------------------------
Shares redeemed (865,591,023) (1,557,510,495)
- -------------------------------------------------------------- ------------ --------------
Net change resulting from Fund share transactions 36,893,350 61,574,565
- -------------------------------------------------------------- ------------ --------------
</TABLE>
* Six months ended October 31, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to 0.50 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive a portion of its fee. The Adviser can modify or
terminate this voluntary waiver and reimbursement at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with administrative and personnel services. The FAS fee is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during the
period of the Administrative Services Agreement shall be at least $125,000 per
portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25 of
1% of average net assets of the Fund for the period. This fee is to obtain
certain personal services for shareholders and to maintain the shareholder
accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEE--Federated Services Company ("FServ")
serves as transfer and dividend disbursing agent for the Fund. The fee is based
on the size, type, and number of accounts and transactions made by shareholders.
Certain of the Officers and Trustees of the Fund are Officers and Directors or
Trustees of the above companies.
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- ---------------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Glen R. Johnson
James E. Dowd President
Lawrence D. Ellis, M.D. J. Christopher Donahue
Edward L. Flaherty, Jr. Vice President
Glen R. Johnson Richard B. Fisher
Peter E. Madden Vice President
Gregor F. Meyer Edward C. Gonzales
Wesley W. Posvar Vice President and Treasurer
Marjorie P. Smuts John W. McGonigle
Vice President and Secretary
David M. Taylor
Assistant Treasurer
Robert C. Rosselot
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses, and other information.
U.S.
TREASURY
CASH
RESERVES
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
October 31, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
314186305
2112510 (12/94)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Investor:
I am pleased to present the Semi-Annual Report to Shareholders for U.S. Treasury
Cash Reserves (the "Fund"), a portfolio of Federated Government Trust, for the
six-month period ended October 31, 1994. The report begins with our Investment
Review, in which the Fund's portfolio manager provides a brief commentary on the
short-term Treasury market. Following the Investment Review are the Financial
Statements, which include the Portfolio of Investments.
On behalf of investors, the Fund continues to pursue current income consistent
with stability of principal and liquidity, and a stable net asset value of $1.00
per share*--all through a portfolio consisting of U.S. Treasury bills and notes.
At the end of the report period, 78.3% of the Fund's net assets were invested in
U.S. Treasury bills, while the remaining net assets were invested in U.S.
Treasury notes.
During the six-month reporting period, dividends paid to shareholders totaled
$6.0 million, or $0.02 per share. Net assets rose from $265.0 million at the
beginning of the reporting period to $356.8 million at the end of the reporting
period.
Thank you for your confidence in the Fund. As always, we welcome your questions,
comments, or suggestions.
Sincerely,
Glen R. Johnson
President
December 15, 1994
* No money market mutual fund can guarantee that a stable net asset value will
be maintained. An investment in the Fund is neither insured nor guaranteed by
the U.S. government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
The Fund, which is rated AAAm by Standard & Poor's Ratings Group ("Standard &
Poor's") and Aaa by Moody's Investors Service, Inc., ("Moody's"), is invested
only in direct issues of the U.S. Treasury.* The Fund was created to meet the
needs of tax-sensitive investors in states which consider income from all
repurchase agreements as taxable. Therefore, the Fund's acceptable investments
do not include repurchase agreements. Liquidity is maintained by investing in a
laddered position of short-term Treasury securities, which are typically
Treasury bills.
During the semi-annual reporting period, the Federal Reserve Board (the "Fed")
continued along the path of tighter monetary policy that it embarked on in early
February 1994 by raising the Federal Funds' target rate by an additional 100
basis points over the reporting period, bringing the rate from 3.75% to 4.75%.
Short rates led the moves by the Fed upward, with the rate on the three-month
Treasury bill rising from 4% at the end of April to 5.15% at the end of October.
At that time, another tightening by the Fed was already being anticipated by the
market, a move which was partially reflected in the level of short-term interest
rates. In fact, in mid-November, faced with persistent strength in the economy
and upward pressures on resource utilization, the Fed moved aggressively to
tighten monetary policy by moving the Fed Funds' target rate up a full 75 basis
points to 5.50%.
Recently, the Fund has been managed within a conservative 30-40 day average
maturity target range, reflecting our expectation of policy moves by the Fed.
The Fund's Treasury note position increased slightly relative to Treasury bills,
in order to take advantage of more attractive spreads available in that area.
The Fund is likely to continue to be managed with a conservative stance in the
near future, with the portfolio seeking to maximize performance through relative
value analysis, in light of the presence of early warning signs of inflation and
the expectation of further tightenings by the Fed. However, changing economic
and market developments are continuously being monitored in order to best serve
our clients attracted to the short-term government market.
* These ratings are obtained after Standard & Poor's and Moody's evaluates a
number of factors, including credit quality, market price exposure, and
management. They monitor the portfolio weekly for developments that could
cause changes in ratings.
U.S. TREASURY CASH RESERVES
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------------- ------------
<C> <C> <S> <C>
U.S. TREASURY OBLIGATIONS--99.8%
- -------------------------------------------------------------------------------------
* U.S. TREASURY BILLS--78.3%
-----------------------------------------------------------------
$ 1,250,000 4.54%, 11/3/94 $ 1,249,692
-----------------------------------------------------------------
10,500,000 4.53%-4.61%, 11/10/94 10,488,252
-----------------------------------------------------------------
45,000,000 4.49%-4.73%, 11/17/94 44,909,544
-----------------------------------------------------------------
13,900,000 4.66%, 11/25/94 13,857,744
-----------------------------------------------------------------
35,800,000 4.62%-4.85%, 12/1/94 35,660,280
-----------------------------------------------------------------
39,300,000 4.64%-4.92%, 12/8/94 39,109,807
-----------------------------------------------------------------
34,700,000 4.68%-4.83%, 12/15/94 34,505,569
-----------------------------------------------------------------
35,900,000 4.88%-4.91%, 12/22/94 35,656,763
-----------------------------------------------------------------
36,500,000 4.90%-4.92%, 1/5/95 36,183,723
-----------------------------------------------------------------
28,100,000 5.07%-5.13%, 1/19/95 27,794,796
----------------------------------------------------------------- ------------
Total 279,416,170
----------------------------------------------------------------- ------------
U.S. TREASURY NOTES--21.5%
-----------------------------------------------------------------
36,643,000 6.00%-8.25%, 11/15/94 36,666,436
-----------------------------------------------------------------
40,000,000 4.625%, 11/30/94 39,994,254
----------------------------------------------------------------- ------------
Total 76,660,690
----------------------------------------------------------------- ------------
TOTAL INVESTMENTS, AT AMORTIZED COST $356,076,860+
----------------------------------------------------------------- ------------
</TABLE>
* Each issue shows the rate of discount at time of purchase.
+ Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($356,773,134) at October 31, 1994.
(See Notes which are an integral part of the Financial Statements)
U.S. TREASURY CASH RESERVES
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investments, at amortized cost and value $356,076,860
- --------------------------------------------------------------------------------
Cash 61,821
- --------------------------------------------------------------------------------
Interest receivable 1,877,216
- --------------------------------------------------------------------------------
Deferred expenses 14,777
- -------------------------------------------------------------------------------- ------------
Total assets 358,030,674
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Dividends payable $1,191,499
- -------------------------------------------------------------------
Accrued expenses 66,041
- ------------------------------------------------------------------- ----------
Total liabilities 1,257,540
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 356,773,134 shares of beneficial interest outstanding $356,773,134
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share
($356,773,134 / 356,773,134 shares of beneficial interest outstanding) $1.00
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
U.S. TREASURY CASH RESERVES
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------
Interest income $6,280,316
- -----------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------
Investment advisory fee $593,672
- -----------------------------------------------------------------------
Trustees' fees 2,899
- -----------------------------------------------------------------------
Administrative personnel and services fee 117,173
- -----------------------------------------------------------------------
Custodian and record keeping fees and expenses 56,304
- -----------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 11,923
- -----------------------------------------------------------------------
Shareholder services fee 21,885
- -----------------------------------------------------------------------
Fund share registration costs 72,264
- -----------------------------------------------------------------------
Legal fees 4,502
- -----------------------------------------------------------------------
Auditing fees 7,333
- -----------------------------------------------------------------------
Printing and postage 4,272
- -----------------------------------------------------------------------
Insurance premiums 4,298
- -----------------------------------------------------------------------
Miscellaneous 7,630
- ----------------------------------------------------------------------- --------
Total expenses 904,155
- -----------------------------------------------------------------------
Deduct--
- -----------------------------------------------------------------------
Waiver of investment advisory fee $593,672
- ------------------------------------------------------------
Reimbursement of other operating expenses 13,647 607,319
- ------------------------------------------------------------ -------- --------
Net expenses 296,836
- ----------------------------------------------------------------------------------- ----------
Net investment income $5,983,480
- ----------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
U.S. TREASURY CASH RESERVES
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
-------------------------------
1995* 1994
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------
Net investment income $ 5,983,480 $ 7,174,727
- ------------------------------------------------------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------
Dividends to shareholders from net investment income (5,983,480) (7,174,727)
- ------------------------------------------------------------- ------------- -------------
FUND SHARE (PRINCIPAL) TRANSACTIONS--
- -------------------------------------------------------------
Proceeds from sale of shares 603,099,504 885,678,265
- -------------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of dividends declared 301,531 163,079
- -------------------------------------------------------------
Cost of shares redeemed (511,657,941) (798,282,485)
- ------------------------------------------------------------- ------------- -------------
Change in net assets from Fund share transactions 91,743,094 87,558,859
- ------------------------------------------------------------- ------------- -------------
Change in net assets 91,743,094 87,558,859
- -------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------
Beginning of period 265,030,040 177,471,181
- ------------------------------------------------------------- ------------- -------------
End of period $ 356,773,134 $ 265,030,040
- ------------------------------------------------------------- ------------- -------------
</TABLE>
* Six months ended October 31, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
U.S. TREASURY CASH RESERVES
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Institutional Service Shares were effective, but did not have public investment
as of October 31, 1994. Accordingly, there are no Financial Highlights for such
shares. The Financial Highlights listed below represent historical information
for Institutional Shares.
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
---------------------------------------------
1995** 1994 1993 1992***
------ ----- ----- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------
Net investment income 0.02 0.03 0.03 0.04
- ---------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------
Dividends to shareholders from net investment
income (0.02 ) (0.03) (0.03) (0.04)
- --------------------------------------------------- ------ ----- ----- ------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------- ------ ----- ----- ------
TOTAL RETURN* 2.03 % 2.95% 3.13% 4.24%
- ---------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------
Expenses 0.20 %(b) 0.20% 0.20% 0.16%(b)
- ---------------------------------------------------
Net investment income 4.03 %(b) 2.93% 3.03% 4.42%(b)
- ---------------------------------------------------
Expense waiver/reimbursement(a) 0.41 %(b) 0.43% 0.50% 0.62%(b)
- ---------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------
Net assets, end of period (000 omitted) $356,773 $265,030 $177,471 $83,244
- ---------------------------------------------------
</TABLE>
* Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
** Six months ended October 31, 1994 (unaudited).
*** Reflects operations for the period from June 11, 1991 (date of initial
public investment) to April 30, 1992.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
U.S. TREASURY CASH RESERVES
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Government 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 three diversified portfolios. The
financial statements included herein present only those of U.S. Treasury Cash
Reserves (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.
Effective October 28, 1994 (the effective date for Institutional Service
Shares), the Fund provided two classes of shares ("Institutional Shares" and
"Institutional Service Shares"). As of October 31, 1994, there was no public
investment in the Institutional Service Shares of the Fund.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
<TABLE>
<S> <C>
A. INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value its portfolio
securities is in accordance with Rule 2a-7 under the Act.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses are accrued
daily. Bond premium and discount, if applicable, are amortized as required by the
Internal Revenue Code, as amended (the "Code"). Distributions to shareholders are
recorded on the ex-dividend date.
C. 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 taxable income. Accordingly, no provision for federal tax are
necessary.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in when-issued or
delayed delivery transactions. The Fund records when-issued securities 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.
E. DEFERRED EXPENSES--The costs incurred by the Fund with respect to registration of its
shares in its first fiscal year, excluding the initial expense of registering it shares,
have been deferred and are being amortized using the straight-line method, not to exceed
a period of five years from the Fund's commencement date.
F. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
U.S. TREASURY CASH RESERVES
- --------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Board of Trustees (the "Trustees") to issue
an unlimited number of full and fractional shares of beneficial interest
(without par value). At October 31, 1994, capital paid in aggregated
$356,773,134. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
-------------------------------
1995* 1994
- ------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Shares sold 603,099,504 885,678,265
- -------------------------------------------------------------
Shares issued to shareholders in payment of dividends
declared 301,531 163,079
- -------------------------------------------------------------
Shares redeemed (511,657,941) (798,282,485)
- ------------------------------------------------------------- ------------ ------------
Net change resulting from Fund share transactions 91,743,094 87,558,859
- ------------------------------------------------------------- ------------ ------------
</TABLE>
* Six months ended October 31, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to 0.40 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive a portion of its fee and reimburse certain operating
expenses of the Fund. The Adviser can modify or terminate this voluntary waiver
and reimbursement at any time at its sole discretion.
ADMINISTRATION FEE--Federated Administrative Services ("FAS") provides the Fund
with administrative and personnel services. The FAS fee is based on the level of
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors for the period. The administrative fee received during the
period of the Administrative Services Agreement shall be at least $125,000 per
portfolio and $30,000 per each additional class of shares.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to 0.25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain personal services for shareholders and to maintain the shareholder
accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEE--Federated Services Company ("FServ")
serves as transfer and dividend disbursing agent for the Fund. The FServ fee is
based on the size, type, and number of accounts and transactions made by
shareholders.
Certain of the Officers and Trustees of the Fund are Officers and Directors or
Trustees of the above companies.
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- ---------------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
John T. Conroy, Jr. Chairman
William J. Copeland Glen R. Johnson
James E. Dowd President
Lawrence D. Ellis, M.D. J. Christopher Donahue
Edward L. Flaherty, Jr. Vice President
Glen R. Johnson Richard B. Fisher
Peter E. Madden Vice President
Gregor F. Meyer Edward C. Gonzales
Wesley W. Posvar Vice President and Treasurer
Marjorie P. Smuts John W. McGonigle
Vice President and Secretary
David M. Taylor
Assistant Treasurer
Robert C. Rosselot
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses, and other information.
