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stroke
1933 Act File No. 33-33852
1940 Act File No. 811-6061
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 10 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 12 X
FEDERATED INDEX TRUST
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
X on December 31, 1994 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i)
on pursuant to paragraph (a) (i).
75 days after filing pursuant to paragraph (a)(ii)
on _________________ pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:
X filed the Notice required by that Rule on December 15, 1994; or
intends to file the Notice required by that Rule on or about
____________; or
during the most recent fiscal year did not sell any securities
pursuant to Rule 24f-2 under the Investment Company Act of 1940, and,
pursuant to Rule 24f-2(b)(2), need not file the Notice.
Copies to:
Thomas J. Donnelly, Esquire Charles H. Morin, Esquire
Houston, Houston & Donnelly Dickstein, Shapiro & Morin,L.L.P.
2510 Centre City Tower 2101 L Street, N.W.
650 Smithfield Street Washington, D.C. 20037
Pittsburgh, Pennsylvania 15222
CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of FEDERATED INDEX
TRUST, which consists of three portfolios, (1) Federated Max-Cap Fund
(formerly Max-Cap Fund), consisting of two classes of shares, (a)
Institutional Shares and (b) Institutional Service Shares; (2) Federated
Mid-Cap Fund (formerly Mid-Cap Fund); and (3) Federated Mini-Cap Fund
(formerly Mini-Cap Fund), is comprised of the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page (1-3) Cover Page.
Item 2. Synopsis Not applicable.
Item 3. Condensed Financial Information (1-3) Summary of Fund
Expenses; (1,2,3) Financial
Highlights; (1-3)
Performance Information.
Item 4. General Description of Registrant (1-3) General Information;
(1-3) Investment Objective;
(1-3) Investment Policies;
(1-3) Investment
Limitations; (1a,1b) Other
Classes of Shares.
Item 5. Management of the Fund (1-3) Federated Index Trust
Information; (1-3)
Management of the Trust;
(1a) Distribution of
Institutional Shares; (1b)
Distribution of
Institutional Service
Shares; (2,3) Distribution
of Fund Shares; (1-3)
Administration of the Fund;
(1-3) Brokerage
Transactions; (1a) Expenses
of the Fund and
Institutional Shares; (1b)
Expenses of the Fund and
Institutional Service
Shares.
Item 6. Capital Stock and Other Securities (1-3) Dividends; (1-3)
Capital Gains; (1-3)
Shareholder Information; (1-
3) Voting Rights; (1-3)
Massachusetts Partnership
Law; (1-3) Tax Information;
(1-3) Federal Income Tax;
(1-3) Pennsylvania
Corporate and Personal
Property Taxes.
Item 7. Purchase of Securities Being
Offered (1a) Investing in
Institutional Shares; (1b)
Investing in Institutional
Service Shares; (1b)
Distribution Plan; (2,3)
Investing in the Fund; (1-
3) Share Purchases; (1-3)
Minimum Investment
Required; (1-3) What Shares
Cost; (1-3) Subaccounting
Services; (1-3)
Certificates and
Confirmations; (1-3) Net
Asset Value.
Item 8. Redemption or Repurchase (1a) Redeeming
Institutional Shares; (1b)
Redeeming Institutional
Service Shares; (2,3)
Redeeming Shares; (1-3)
Telephone Redemption; (1-3)
Written Requests; (1-3)
Signatures; (1-3) Receiving
Payment; (1-3) Redemption
Before Purchase Instruments
Clear; (1-3) Accounts with
Low Balances; (2-3)
Exchanging Securities for
Fund Shares.
Item 9. Pending Legal Proceedings Not applicable.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
Item 10. Cover Page (1-3) Cover Page.
Item 11. Table of Contents (1-3) Table of Contents.
Item 12. General Information and History (1-3) General Information
About the Fund.
Item 13. Investment Objectives and
Policies (1-3) Investment Objective
and Policies.
Item 14. Management of the Fund (1-3) Trust Management.
Item 15. Control Persons and Principal
Holders of Securities (1-3) Fund Ownership.
Item 16. Investment Advisory and Other
Services (1-3) Management Services;
(1b) Distribution Plan; (1-
3) Administrative Services.
Item 17. Brokerage Allocation (1-3) Brokerage
Transactions.
Item 18. Capital Stock and Other Securities Not Applicable.
Item 19. Purchase, Redemption and Pricing of
Securities Being Offered (1-3) Purchasing Shares;
(2,3) Exchanging Securities
for Fund Shares; (1-3)
Determining Net Asset
Value; (1-3) Redeeming
Shares.
Item 20. Tax Status (1-3) Tax Status.
Item 21. Underwriters Not applicable.
Item 22. Calculation of Performance Data (1-3) Total Return; (1-3)
Yield; (1-3) Performance
Comparisons.
Item 23. Financial Statements (1-3) Filed in Part A.
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
(A PORTFOLIO OF FEDERATED INDEX TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
The Institutional Shares of Federated Max-Cap Fund (the "Fund") offered by this
prospectus represent interests in the Fund, which is an investment portfolio in
Federated Index Trust (the "Trust"), an open-end, management investment company
(a mutual fund). The investment objective of the Fund is to seek to provide
investment results that correspond to the aggregate price and dividend
performance of publicly traded common stocks as represented by the Standard &
Poor's 500 Composite Stock Price Index (the "Index"). The Fund is neither
affiliated with nor sponsored by the Standard & Poor's Ratings Group.
THE INSTITUTIONAL 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 BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Combined Statement of Additional Information for
Institutional Shares and Institutional Service Shares dated December 31, 1994,
with the Securities and Exchange Commission. The information contained in the
Combined Statement of Additional Information is incorporated by reference into
this prospectus. You may request a copy of the Combined Statement of Additional
Information free of charge by calling 1-800-235-4669. To obtain other
information or to make inquiries about the Fund, contact the Fund at the address
listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated December 31, 1994
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Limitations 7
FEDERATED INDEX TRUST INFORMATION 7
- ------------------------------------------------------
Management of the Trust 7
Distribution of Institutional Shares 9
Administration of the Fund 10
Brokerage Transactions 10
Expenses of the Fund and
Institutional Shares 10
NET ASSET VALUE 11
- ------------------------------------------------------
INVESTING IN INSTITUTIONAL SHARES 11
- ------------------------------------------------------
Share Purchases 11
Minimum Investment Required 12
What Shares Cost 12
Subaccounting Services 12
Certificates and Confirmations 12
Dividends 12
Capital Gains 12
REDEEMING INSTITUTIONAL SHARES 13
- ------------------------------------------------------
Telephone Redemption 13
Written Requests 13
Accounts with Low Balances 14
SHAREHOLDER INFORMATION 14
- ------------------------------------------------------
Voting Rights 14
Massachusetts Partnership Law 14
TAX INFORMATION 15
- ------------------------------------------------------
Federal Income Tax 15
PERFORMANCE INFORMATION 15
- ------------------------------------------------------
OTHER CLASSES OF SHARES 16
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS--INSTITUTIONAL
SERVICES SHARES 17
- ------------------------------------------------------
FINANCIAL STATEMENTS 18
- ------------------------------------------------------
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS 46
- ------------------------------------------------------
ADDRESSES 47
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................................................. None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)................................................. None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable)............................... None
Redemption Fee (as a percentage of amount redeemed, if applicable).................... None
Exchange Fee.......................................................................... None
ANNUAL INSTITUTIONAL SHARES OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)(1)...................................................... 0.23%
12b-1 Fee............................................................................. None
Total Other Expenses.................................................................. 0.09%
Shareholder Services Fee................................................ None
Total Fund Operating Expenses(2)............................................ 0.32%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary waiver
at any time at its sole discretion. The maximum management fee is 0.30%.
(2) The Total Institutional Shares Operating Expenses would have been 0.39%
absent the voluntary waiver of a portion of the management fee.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Institutional Shares of the
Fund will bear, either directly or indirectly. For more complete descriptions of
the various costs and expenses, see "Federated Index Trust Information" and
"Investing in Institutional Shares." Wire-transferred redemptions of less than
$5,000 may be subject to additional fees.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
- -------------------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return, and (2)
redemption at the end of each time period............. $3 $10 $18 $ 41
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The information set forth in the foregoing table and example relates only
to the Institutional Shares of the Fund. The Fund offers another class of shares
called Institutional Service Shares. Institutional Shares and Institutional
Service Shares are subject to a certain amount of the same expenses; however,
Institutional Service Shares are subject to a 12b-1 fee of up to 0.30% and a
Shareholder Services Fee of up to 0.25%. See "Other Classes of Shares."
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 46.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------------------------
1994 1993 1992 1991 1990*
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.24 $11.64 $11.07 $ 8.60 $10.00
- -------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------
Net investment income 0.32 0.30 0.32 0.37 0.12
- -------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
futures contracts 0.10 1.29 0.71 2.46 (1.43 )
- ------------------------------------------------------------- ----- ----- ----- ----- ------
Total from investment operations 0.42 1.59 1.03 2.83 (1.31 )
- -------------------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------------------
Dividends to shareholders from net investment income (0.30) (0.30) (0.34) (0.36) (0.09 )
- -------------------------------------------------------------
Distributions to shareholders from net realized gain on
investment and futures contracts (0.34) (0.69) (0.12) -- --
- ------------------------------------------------------------- ----- ----- ----- ----- ------
Total distributions (0.64) (0.99) (0.46) (0.36) (0.09 )
- ------------------------------------------------------------- ----- ----- ----- ----- ------
NET ASSET VALUE, END OF PERIOD $12.02 $12.24 $11.64 $11.07 $8.60
- ------------------------------------------------------------- ----- ----- ----- ----- ------
TOTAL RETURN** 3.59% 14.35% 9.51% 33.31% (14.46)%
- -------------------------------------------------------------
RATIO TO AVERAGE NET ASSETS
- -------------------------------------------------------------
Expenses 0.32% 0.31% 0.30% 0.24% 0.00 %(b)
- -------------------------------------------------------------
Net investment income 2.70% 2.60% 2.92% 3.74% 5.19 %(b)
- -------------------------------------------------------------
Expense waiver/reimbursement(a) 0.07% 0.09% 0.18% 0.45% 0.94 %(b)
- -------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------
Net assets, end of period (000 omitted) $443,815 $407,246 $309,614 $144,528 $25,129
- -------------------------------------------------------------
Portfolio turnover rate 2% 13% 46% 6% 0 %
- -------------------------------------------------------------
</TABLE>
* Reflects operations for the period from July 5, 1990 (date of initial public
offering) to October 31, 1990. For the period from the start of business June
26, 1990 to July 4, 1990, net investment income per share aggregating $0.02
per share ($155) was distributed to the Fund's manager. Such distribution
represented the net income of the Fund prior to the initial public offering
of Fund shares which commenced on July 5, 1990.
** Based on net asset value, which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(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)
Further information about the Fund's performance is contained in the Fund's
annual report for the fiscal year ended
October 31, 1994 which can be obtained free of charge.
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated January 30, 1990. The Declaration of Trust permits the Trust to
offer separate series of shares of beneficial interest representing interests in
separate portfolios of securities. The shares in any one portfolio may be
offered in separate classes. As of the date of this prospectus, the Board of
Trustees ("Trustees") has established two classes of shares of the Fund, known
as Institutional Shares ("Shares") and Institutional Service Shares. On December
5, 1994, the Trustees changed the name of the Fund from the Max-Cap Fund to the
Federated Max-Cap Fund. This prospectus relates only to Institutional Shares of
the Fund. Institutional Shares are designed primarily for institutions investing
on behalf of their customers. A minimum initial investment of $25,000 over a
90-day period is required.
Shares are currently sold and redeemed at net asset value without a sales charge
imposed by the Fund.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide investment results that
correspond to the aggregate price and dividend performance of publicly-traded
common stocks, by duplicating the composition of the Index. The investment
objective cannot be changed without approval of shareholders. The Fund's ability
to duplicate the Index will depend partly on the size and timing of cash flows
into and out of the Fund. The Fund's performance is expected to closely mirror
the performance of the Index. An investment in the Fund presents risks similar
to those of investing in a portfolio comprised of the securities of the
companies in the Index. While there is no assurance that the Fund will achieve
its investment objective, it endeavors to do so by following the investment
policies described in this prospectus.
INVESTMENT POLICIES
The investment policies described below may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material changes
in these policies become effective.
The Fund pursues its investment objective by attempting to duplicate the
investment results of the Index, while minimizing transaction costs and other
expenses. The Fund will attempt to achieve a correlation between the performance
of its portfolio and that of the Index of at least 0.95 of 1% or better; a
figure of 1.00 would represent perfect correlation. The Fund will normally be
invested in substantially all of the stocks that comprise the Index. Under
normal circumstances, at least 80% of the value of the Fund's total assets will
be invested in stocks represented in the Index. However, the Fund is not
required to sell securities if the 80% investment level changes due to increases
or decreases in the market value of portfolio securities.
The Index consists of 500 selected common stocks, most of which are listed on
the New York Stock Exchange. The Standard & Poor's Ratings Group ("S&P")
designates the stocks to be included in the Index on a statistical basis. A
particular stock's weighting in the Index is based on its relative total market
value; that is, its market price per share times the number of shares
outstanding. From time to
time, S&P may add or delete stocks from the Index. Inclusion of a particular
stock in the Index in no way implies an opinion by S&P as to its investment
attractiveness, nor is S&P a sponsor or in any way affiliated with the Fund. The
Fund utilizes the Index as the standard performance benchmark because it
represents approximately 70% of the total market value of all common stocks. In
addition, it is familiar to investors, and is recognized as a barometer of
common stock investment returns.
The Fund will be managed passively, in that the traditional management functions
of economic, financial, and market analysis will not be undertaken. Furthermore,
a company's adverse financial circumstance will not trigger its elimination from
the Fund's portfolio, unless the company's stock is removed from the Index by
S&P. The Fund is managed by utilizing a computer program that identifies which
stocks should be purchased or sold in order to duplicate, as much as possible,
the composition of the Index. The Fund will include a stock in its investment
portfolio in the order of the stock's weighting in the Index, starting with the
heaviest-weighted stock. Thus, the proportion of Fund assets invested in such
stock is nearly identical to the percentage of the particular stock represented
in the Index. On occasion, so as to respond to changes in the Index's
composition, as well as corporate mergers, tender offers, and other
circumstances, adjustments will be made in the Fund's portfolio. However, it is
anticipated that these adjustments will occur infrequently, and the costs will
be minimized. As a result, portfolio turnover is expected to be well below that
encountered in other investment company portfolios. Therefore, the accompanying
costs, including accounting costs, brokerage fees, custodial expenses, and
transfer taxes, are expected to be relatively low. While the cash flows into and
out of the Fund will impact the Fund's portfolio turnover rate and the Fund's
ability to replicate the Index's performance, investment adjustments will be
made, as practicably as possible, to account for these circumstances.
The Fund believes that indexing, as described above, constitutes a reasonable
and effective method of replicating percentage changes in the Index. While the
Fund will not duplicate the Index's performance precisely, it is anticipated
that the Fund's performance will closely resemble the performance of the Index.
Factors such as the size of the Fund's portfolio, the size and timing of cash
flows into and out of the Fund, and changes in the securities markets and the
Index itself, will account for the difference.
In order to accommodate cash flows, the Fund may enter into stock index futures
contracts and options. The Fund may purchase futures contracts and options
solely to maintain adequate liquidity to meet its redemption demands. This will
allow the Fund to simultaneously maximize the level of the Fund assets which are
tracking the performance of the Index. The Fund can sell futures contracts and
options in order to close out a previously established position. The Fund will
not enter into any stock index futures contract for the purpose of speculation.
ACCEPTABLE INVESTMENTS. The Fund will invest primarily in common stocks
comprising the Index. In addition, the Fund may hold cash reserves which may be
invested in the following:
U.S. GOVERNMENT SECURITIES. The Fund is permitted to invest in U.S.
government securities which are either issued or guaranteed by the U.S.
government, its agencies or instrumentalities. These securities include,
but are not limited to:
- direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds; and
- notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as Federal Home Loan Banks, the Federal National
Mortgage Association, the Federal Home Loan Mortgage Corporation, the
Federal Farm Credit System, and the Student Loan Marketing Association.
REPURCHASE AGREEMENTS. The U.S. government securities and other securities
in which the Fund invests may be purchased pursuant to repurchase
agreements. Repurchase agreements are arrangements in which banks,
broker/dealers, and other recognized financial institutions sell U.S.
government securities or other securities to the Fund and agree at the time
of sale to repurchase them at a mutually agreed upon time and price. To the
extent that the original seller does not repurchase the securities from the
Fund, the Fund could receive less than the repurchase price on any sale of
such securities.
VARIABLE RATE U.S. GOVERNMENT SECURITIES. Some of the short-term U.S.
government securities the Fund may purchase carry variable interest rates.
These securities have a rate of interest subject to adjustment at least
annually. This adjusted interest rate is ordinarily tied to some objective
standard, such as a published interest rate or interest rate index.
CASH ITEMS. The Fund may also invest in cash items.
The Fund may also invest in commercial paper rated A-1 by S&P, Prime-1 by
Moody's Investors Service, Inc., or F-1 by Fitch Investors Service, Inc.
STOCK INDEX FUTURES AND OPTIONS. The Fund may utilize stock index futures
contracts, options, and options on futures contracts, subject to the
limitation that the value of these futures contracts and options will not
exceed 20% of the Fund's total assets. Also, the Fund will not purchase
options to the extent that more than 5% of the value of the Fund's total
assets would be invested in premiums on open put option positions. These
futures contracts and options will be used to handle cash flows into and
out of the Fund and to potentially reduce transactional costs, since
transactional costs associated with futures and options contracts can be
lower than costs stemming from direct investments in stocks.
There are several risks accompanying the utilization of futures contracts
to effectively anticipate market transactions. First, positions in futures
contracts may be closed only on an exchange or board of trade that
furnishes a secondary market for such contracts. While the Fund plans to
utilize futures contracts only if there exists an active market for such
contracts, there is no guarantee that a liquid market will exist for the
contracts at a specified time. Furthermore, because, by definition, futures
contracts look to projected price levels in the future and not to current
levels of valuation, market circumstances may result in there being a
discrepancy between the price of the stock index
future and the movement in the stock index. The absence of a perfect price
correlation between the futures contract and its underlying stock index
could stem from investors choosing to close futures contracts by offsetting
transactions, rather than satisfying additional margin requirements. This
could result in a distortion of the relationship between the index and
futures market. In addition, because the futures market imposes less
burdensome margin requirements than the securities market, an increased
amount of participation by speculators in the futures market could result
in price fluctuations.
In view of these considerations, the Fund will comply with the following
restrictions when purchasing and selling futures contracts. First, the Fund will
not participate in futures transactions if the sum of its initial margin
deposits on open contracts will exceed 5% of the market value of the Fund's
total assets, after taking into account the unrealized profits and losses on
those contracts it has entered into. Second, the Fund will not enter into these
contracts for speculative purposes. Third, since the Fund does not constitute a
commodity pool, it will not market itself as such, nor serve as a vehicle for
trading in the commodities futures or commodity options markets. In this regard,
the Fund will disclose to all prospective investors the limitations on its
futures and options transactions, and will make clear that these transactions
are entered into only for bona fide hedging purposes or other permissible
purposes pursuant to regulations promulgated by the Commodity Futures Trading
Commission ("CFTC"). Also, the Fund intends to claim an exclusion from
registration as a commodity pool operator under the regulations promulgated by
the CFTC.
INDEX PARTICIPATION CONTRACTS. In addition to investing in stock index
futures contracts, options and options on futures contracts, the Fund may
also participate in the purchasing and selling of index participation
contracts based on the Index. The Fund will utilize index participation
contracts to aid in the management of cash flows into and out of the Fund
and not for speculative purposes. These contracts provide the equivalent of
a position in the stocks of the Index, where each stock is represented in
the same proportion as it is represented in the Index. Unlike futures
contracts, positions in these instruments may last indefinitely, with no
expiration date and will pay dividends implied by the underlying stocks in
the Index. Generally, the value of an index participation contract will
rise and fall as the value of the Index rises and falls. Index
participation contracts have lower transaction costs than those associated
with the purchase and sale of individual stocks. The Fund will invest in
index participation contracts only if there exists an active market for
such contracts.
The value of these contracts, together with the value of the Fund's
investment in stock index futures contracts, options and options on futures
contracts will not exceed 20% of the Fund's total assets. The Fund's use of
these investments will be to maintain adequate liquidity to meet redemption
requests, while simultaneously maximizing the level of Fund assets which
are tracking the performance of the Index.
LENDING OF PORTFOLIO SECURITIES. The Fund may lend its portfolio securities on
a short-term basis or long-term basis, up to one-third of the value of its total
assets to broker/dealers, banks, or other institutional borrowers of securities.
The Fund will only enter into loan arrangements with broker/dealers, banks or
other institutions which the managers have determined are creditworthy under
guidelines established by the Trustees. The Fund will receive collateral in the
form of cash or U.S. government securities equal to at least 100% of the value
of the securities loaned.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase short-term
U.S. government securities on a when-issued or delayed delivery basis. These
transactions are arrangements in which the Fund purchases securities with
payment and delivery scheduled for a future time. The seller's failure to
complete these transactions may cause the Fund to miss a price or yield
considered to be advantageous. Settlement dates may be a month or more after
entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices. Accordingly, the Fund may pay
more/less than the market value of the securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the managers deem it
appropriate to do so. In addition, the Fund may enter in transactions to sell
its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Fund may realize short-term profits or losses upon the sale of such
commitments.
INVESTMENT LIMITATIONS
The Fund will not:
- borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a money market instrument for at
least a percentage of its cash value with an agreement to buy it back on a
set date) except, under certain circumstances, the Fund may borrow up to
one-third of the value of its total assets and pledge up to 10% of the
value of those assets to secure such borrowings.
The above investment limitation cannot be changed without shareholder approval.
The following investment limitations, however, may be changed by the Trustees
without shareholder approval. Shareholders will be notified before any material
change in these policies becomes effective.
The Fund will not:
- invest more than 5% of its total assets in securities of issuers that
have records of less than three years of continuous operations; or
- invest more than 15% of its net assets in securities that are illiquid.
FEDERATED INDEX TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the business affairs of the Trust and for
exercising all of the powers of the Trust except those reserved for the
shareholders. The Executive Committee of the Board of Trustees handles the
Trustees' responsibilities between meetings of the Trustees.
FUND'S MANAGER. Federated Management serves as the Fund's manager (the
"Manager"). The Trust has entered into a management contract (the "Management
Contract") with the Manager, which, in turn, has entered into a sub-management
contract (the "Sub-Management Contract") with ANB Investment Management and
Trust Company ("ANB" or the "Sub-Manager") (ANB and the Manager are collectively
referred to as "Managers"). It is the Manager's responsibility to select the
Sub-Manager,
subject to the review and approval of the Trustees and to review and evaluate
the Sub-Manager's continued performance. The Manager is also responsible for
providing administrative services to the Fund.
Subject to the supervision and direction of the Trustees, the Manager provides
to the Fund investment management evaluation services principally by performing
initial due diligence on the Sub-Manager for the Fund and thereafter monitoring
and evaluating the performance of the Fund's Sub-Manager through quantitative
and qualitative analyses. In addition, the Manager conducts periodic in-person,
telephonic and written consultations with the Sub-Manager. In initially
evaluating the Sub-Manager, the Manager considered, among other factors, the
Sub-Manager's level of expertise; relative performance over a minimum period of
five years; level of efficiency; level of adherence to investment discipline or
philosophy; personnel, facilities and financial strength; and quality of service
and client communications. On an ongoing basis, the Manager is responsible for
communicating performance expectations and evaluations to the Sub-Manager;
monitoring tracking error; monitoring and analyzing the appropriate futures
contracts to purchase and the futures holdings of the Fund as a percentage of
Fund assets; monitoring market timing in the Fund; discussing with the
Sub-Manager which method of indexing to use; and ultimately recommending to the
Trustees whether the Sub-Management Contract should be renewed, modified or
terminated. The Manager provides written reports to the Trustees regarding the
results of its evaluation and monitoring functions. In addition, the Manager is
responsible for providing the Fund with administrative services, including, but
not limited to, shareholder servicing and certain legal and accounting services.
The Manager is also responsible for conducting all operations of the Fund,
except those operations contracted to the Sub-Manager, custodian, transfer agent
and dividend disbursing agent. As described below, the Manager receives an
annual fee from the Fund for performing its responsibilities under the
Management Contract.
MANAGEMENT FEES. The Fund's Manager receives an annual management fee
equal to .30 of 1% of the Fund's average daily net assets. Under the
Management Contract, which provides for the voluntary waiver of the
management fee by the Manager, the Manager will voluntarily waive some or
all of the management fee. The Manager can terminate this voluntary waiver
of some or all of its management fee at any time in its sole discretion.
The Manager has also undertaken to reimburse the Fund for operating
expenses in excess of limitations established by certain states.
MANAGER'S BACKGROUND. Federated Management, a Delaware business trust
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through
these same client institutions, individual shareholders also have access to
this same level of investment expertise.
SUB-MANAGER. Under the terms of the Sub-Management Contract between the Manager
and ANB, ANB serves as the Fund's Sub-Manager. The Sub-Manager will develop,
maintain and run the computer program designed to determine which securities
will be purchased and sold so as to replicate the composition of the Index to
the extent feasible, and, subject to the Manager's oversight, has complete
discretion to purchase and sell portfolio securities for the Fund within the
Fund's investment objective, restrictions and policies.
SUB-MANAGEMENT FEES. For its services under the Sub-Management Contract,
ANB receives an annual fee from the Manager equal to .05 of 1% of the first
$100 million of net assets under management, .02 of 1% over $100 million
but less than $200 million, and .01 of 1% of net assets over and above $200
million, on an annualized basis. This fee is paid by the Manager out of its
resources and is not an incremental Fund expense. No performance or
incentive fees are paid to the Sub-Manager.
SUB-MANAGER'S BACKGROUND. ANB, incorporated in the State of Illinois on
July 1, 1988, is a registered investment adviser under the Investment
Advisers Act of 1940. ANB is a wholly-owned subsidiary of American National
Bank and Trust Company of Chicago, which, in turn, is an indirect
wholly-owned subsidiary of First Chicago Corporation. It serves as
investment adviser principally to corporate defined benefit and defined
contribution plans which have, as of September 30, 1994, placed
approximately $15.3 billion in assets with ANB. Since 1973, when American
National Bank and Trust Company of Chicago introduced its first commingled
equity index fund, ANB has developed and managed a family of equity and
bond index funds in which some 350 nationwide non-financial institution
clients invest. In total, ANB manages 50 commingled/common trust funds.
Also, since 1990, ANB has served as Sub-Manager for the Federated Mini-Cap
Fund and the Federated Mid-Cap Fund which are also portfolios of the Trust.
OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. In addition to periodic payments to
financial institutions under the Shareholder Services Plan, certain financial
institutions may be compensated by the Manager or its affiliates for the
continued investment of customers' assets in certain funds, including the Fund,
advised by those entities. These payments will be made directly by the
distributor or Manager from their assets, and will not be made from the assets
of the Fund or by the assessment of a sales charge on shares.
DISTRIBUTION OF INSTITUTIONAL SHARES
Federated Securities Corp. is the principal distributor for the Fund. It is a
Pennsylvania corporation organized on November 14, 1969, and is the principal
distributor for a number of investment companies. Federated Securities Corp. is
a subsidiary of Federated Investors. Federated Securities Corp. pays a licensing
fee to S&P for the right to use the Index in connection with the sub-management
activities for the Fund. Federated Securities Corp. is not affiliated with S&P.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, Inc., a subsidiary
of Federated Investors, provides the Manager with the administrative personnel
and services necessary to provide shareholder servicing and certain legal and
accounting services.
SHAREHOLDER SERVICES PLAN. The Fund has adopted a Shareholder Services Plan
(the "Services Plan") under which it may make payments up to 0.25 of 1% of the
average daily net asset value of the Shares to obtain certain personal services
for shareholders and the maintenance of shareholder accounts ("shareholder
services"). The Fund has entered into a Shareholder Services Agreement with
Federated Shareholder Services, a subsidiary of Federated Investors, under which
Federated Shareholder Services will either perform shareholder services directly
or will select financial institutions to perform shareholder services. Financial
institutions will receive fees based upon shares owned by their clients or
customers. The schedules of such fees and the basis upon which such fees will be
paid will be determined from time to time by the Fund and Federated Shareholder
Services.
CUSTODIAN. State Street Bank and Trust Company ("State Street Bank"), Boston,
Massachusetts, is custodian for the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Pittsburgh, Pennsylvania, is transfer agent for the shares of the Fund, and
dividend disbursing agent for the Fund.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, Pennsylvania, and Dickstein, Shapiro & Morin, L.L.P., Washington,
D.C.
INDEPENDENT AUDITORS. The independent auditors for the Fund are Ernst & Young
LLP, Pittsburgh, Pennsylvania.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the managers look for prompt execution of the order at a favorable
price. In working with dealers, the managers will generally utilize those who
are recognized dealers in specific portfolio instruments, except when a better
price and execution of the order can be obtained elsewhere. In selecting among
firms believed to meet these criteria, the managers may give consideration to
those firms which have sold or are selling shares of the Fund and other funds
distributed by Federated Securities Corp. The managers make decisions on
portfolio transactions and select brokers and dealers subject to review by the
Trustees.
EXPENSES OF THE FUND AND INSTITUTIONAL SHARES
Holders of Shares pay their allocable portion of Fund and Trust expenses.
The Trust expenses for which holders of Shares pay their allocable portion
include, but are not limited to: the cost of organizing the Trust and continuing
its existence; registering the Trust with federal and state securities
authorities; Trustees' fees; auditors' fees; the cost of meetings of Trustees;
legal fees of the Trust; association membership dues; and such non-recurring and
extraordinary items as may arise.
The Fund expenses for which holders of Shares pay their allocable portion
include, but are not limited to: registering the Fund and Shares of the Fund;
investment advisory services; taxes and commissions;
custodian fees; insurance premiums; auditors' fees; and such non-recurring and
extraordinary items as may arise.
At present, no expenses are allocated to the Shares as a class. However, the
Trustees reserve the right to allocate certain other expenses to holders of
Shares as they deem appropriate ("Class Expenses"). In any case, Class Expenses
would be limited to transfer agent fees as identified by the transfer agent as
attributable to holders of Shares; printing and postage expenses related to
preparing and distributing materials such as shareholder reports, prospectuses
and proxies to current shareholders; registration fees paid to the Securities
and Exchange Commission and registration fees paid to state securities
commissions; expenses related to administrative personnel and services as
required to support holders of Shares; legal fees relating solely to Shares; and
Trustees' fees incurred as a result of issues relating solely to Shares.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund's net asset value per Share fluctuates. It is determined by adding the
interest of the Shares in the market value of all securities and other assets of
the Fund, subtracting the interest of the Shares in the liabilities of the Fund
and those attributable to Shares, and dividing the remainder by the total number
of Shares outstanding. The net asset value for Shares may exceed that of
Institutional Service Shares due to the variance in daily net income realized by
each class. Such variance will reflect only accrued net income to which the
shareholders of a particular class are entitled.
INVESTING IN INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange is open. Shares of
the Fund may be purchased either by wire or mail. To purchase Shares of the
Fund, open an account by calling Federated Securities Corp. Information needed
to establish the account will be taken over the telephone. The Fund reserves the
right to reject any purchase request.
BY WIRE. To purchase Shares of the Fund by Federal Reserve wire, call the Fund
to place an order. Shareholders have until 4:00 p.m. (Eastern time) to call the
Fund for settlement on the next business day. However, in order to maximize the
Fund's ability to track the Index, shareholders are urged to transmit purchase
requests prior to 2:00 p.m. (Eastern time). The order is considered received
immediately. Payment by federal funds must be received before 4:00 p.m. (Eastern
time) on the next business day following the order. Federal funds should be
wired as follows: State Street Bank and Trust Company, Boston, Massachusetts;
Attention: EDGEWIRE; For Credit to: Federated Index Trust, Federated Max-Cap
Fund--Institutional Shares; Fund Number (this number can be found on the account
statement or by contacting the Fund); Group Number or Order Number; Nominee or
Institution Name; ABA Number 011000028.
BY MAIL. To purchase Shares of the Fund by mail, send a check made payable to
Federated Index Trust, Federated Max-Cap Fund--Institutional Shares to the
Fund's transfer agent, Federated Services Company, c/o State Street Bank and
Trust Company, P.O. Box 8602, Boston, Massachusetts 02266-8602.
Orders by mail are considered received after payment by check is converted by
State Street Bank into federal funds. This is normally the next business day
after State Street Bank receives the check.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in the Fund is $25,000. However, an account may
be opened with a smaller amount as long as the $25,000 minimum is reached within
90 days. An investor's minimum investment will be calculated by combining all
accounts that the institution maintains with the Fund.
WHAT SHARES COST
Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Fund.
The net asset value is determined at 4:00 p.m. (Eastern time), Monday through
Friday, except on: (i) days on which there are not sufficient changes in the
value of the Fund's portfolio securities that its net asset value might be
materially affected; (ii) days during which no Shares are tendered for
redemption and no orders to purchase Shares are received; and (iii) the
following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
SUBACCOUNTING SERVICES
Institutions are encouraged to open single master accounts. However, certain
institutions may wish to use the transfer agent's subaccounting system to
minimize their internal recordkeeping requirements. The transfer agent charges a
fee based on the level of subaccounting services rendered. Institutions holding
Shares in a fiduciary, agency, custodial, or similar capacity may charge or pass
through subaccounting fees as part of or in addition to normal trust or agency
account fees. They may also charge fees for other services provided which may be
related to the ownership of Shares. This prospectus should, therefore, be read
together with any agreement between the customer and the institution with regard
to the services provided, the fees charged for those services, and any
restrictions and limitations imposed.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company, maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund.
Detailed confirmations of each purchase or redemption are sent to each
shareholder. Quarterly confirmations are sent to report dividends paid during
the quarter.
DIVIDENDS
Dividends are declared and paid quarterly to all shareholders invested in the
Fund on the record date. Unless shareholders request cash payments by writing to
the Fund, dividends are automatically reinvested in additional Shares on payment
dates at the ex-dividend date net asset value without a sales charge.
CAPITAL GAINS
Capital gains realized by the Fund, if any, will be distributed at least once
every 12 months.
REDEEMING INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
The Fund redeems Shares at their net asset value next determined after the Fund
receives the redemption request. Redemptions will be made on days on which the
Fund computes its net asset value. Redemption requests must be received in
proper form and can be made by telephone request or written request.
TELEPHONE REDEMPTION
Shareholders may redeem their Shares by telephoning the Fund before 4:00 p.m.
(Eastern time). However, in order to maximize the Fund's ability to track the
Index, shareholders are urged to telephone the Fund prior to 2:00 p.m. (Eastern
time). The proceeds will normally be wired the following business day, but in no
event more than seven days, to the shareholder's account at a domestic
commercial bank that is a member of the Federal Reserve System. If at any time
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified. An authorization form
permitting State Street Bank or the Fund to accept telephone requests must first
be completed. Authorization forms and information on this service are available
from Federated Securities Corp. Telephone redemption instructions may be
recorded.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "Written Requests," should be considered.
If reasonable procedures are not followed by the Fund, it may be liable for
losses due to unauthorized or fraudulent telephone instructions.
WRITTEN REQUESTS
Shares may also be redeemed by sending a written request to the Fund. Call the
Fund for specific instructions before redeeming by letter. The shareholder will
be asked to provide in the request his name, the Fund name, his account number,
and the share or dollar amount requested. If share certificates have been
issued, they must be properly endorsed and should be sent by registered or
certified mail with the written request.
SIGNATURES. Shareholders requesting a redemption of $50,000 or more, a
redemption of any amount to be sent to an address other than that on record with
the Fund, or a redemption payable other than to the shareholder of record must
have signatures on written redemption requests guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund ("BIF"), which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund ("SAIF"), which is administered
by the FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
RECEIVING PAYMENT. Normally, a check for the proceeds is mailed within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000. This
requirement does not apply, however, if the balance falls below $25,000 because
of changes in the Fund's net asset value.
Before Shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each Share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights except that, in matters
affecting only a particular fund or class, only shares of that Fund or class are
entitled to vote. As a Massachusetts business trust, the Trust is not required
to hold annual shareholder meetings. Shareholder approval will be sought only
for certain changes in the Trust's or the Fund's operation and for the election
of Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders shall be called by the Trustees upon the
written request of shareholders owning at least 10% of the outstanding shares of
all series of the Trust.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for acts or obligations of the Trust on behalf
of the Fund. To protect shareholders of the Fund, the Trust has filed legal
documents with Massachusetts that expressly disclaim the liability of
shareholders of the Fund for such acts or obligations of the Trust. These
documents require notice of this disclaimer to be given in each agreement,
obligation, or instrument that the Trust enters into on behalf of the Fund.
In the unlikely event a shareholder of the Fund is held personally liable for
the Trust's obligations on behalf of the Fund, the Trust is required to use the
property of the Fund to protect or compensate the shareholder. On request, the
Trust will defend any claim made and pay any judgment against a shareholder for
any act or obligation of the Trust on behalf of the Fund. Therefore, financial
loss resulting from liability as a shareholder of the Fund will occur only if
the Trust cannot meet its obligations to indemnify shareholders and pay
judgments against them from the assets of the Fund.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code applicable to regulated investment companies and to
receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios, if any, will not be combined for tax purposes with
those realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions, including capital gains distributions,
received. This applies whether dividends and distributions are received in cash
or as additional shares. Distributions representing long-term capital gains, if
any, will be taxable to shareholders as long-term capital gains no matter how
long the shareholders have held their shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES. In the opinion of Houston,
Houston & Donnelly, counsel to the Trust:
- neither the Trust nor the Fund is subject to Pennsylvania corporate or
personal property taxes; and
- Fund shares may be subject to personal property taxes imposed by
counties, municipalities, and school districts in Pennsylvania to the
extent that the portfolio securities in the Fund would be subject to such
taxes if owned directly by residents of those jurisdictions.
Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund advertises its total return and yield for Shares.
Total return represents the change, over a specified period of time, in the
value of an investment in Shares of the Fund after reinvesting all income and
capital gain distributions. It is calculated by dividing that change by the
initial investment and is expressed as a percentage.
The yield of Shares of the Fund is calculated by dividing the net investment
income per share (as defined by the Securities and Exchange Commission) earned
by the Shares over a thirty-day period by the offering price per share of the
Shares on the last day of the period. This number is then annualized using
semi-annual compounding. The yield does not necessarily reflect income actually
earned by the Shares and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.
Shares are sold without any sales load or other similar non-recurring charges.
Total return and yield will be calculated separately for Institutional Shares
and Institutional Service Shares. Because Institu-
tional Service Shares are subject to a 12b-1 fee, the total return and yield for
Institutional Shares for the same period will exceed that of Institutional
Service Shares.
From time to time, the Fund may advertise its performance using certain
reporting services and/or compare its performance to certain indices.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
Institutional Service Shares are sold at net asset value and are subject to a
minimum initial investment of $25,000. Institutional Service Shares are
distributed pursuant to a 12b-1 Plan adopted by the Trust whereby the
distributor is paid a fee of .30 of 1% of the Institutional Service Shares'
average daily net assets.
Financial institutions and brokers providing sales and/or administrative
services may receive different compensation depending upon which class of shares
of the Fund is sold.
The amount of dividends payable to Institutional Shares will exceed that of
Institutional Service Shares by the difference between Class Expenses and
distribution expenses borne by shares of each respective class.
The stated management fee is the same for both classes of shares.
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 46.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-----------------------
1994 1993*
------ ------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.24 $12.12
- --------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------
Net investment income 0.28(c) 0.07
- --------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and futures
contracts 0.11 0.12
- -------------------------------------------------------------------------- ------ -----
Total from investment operations 0.39 0.19
- --------------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.27) (0.07 )
- --------------------------------------------------------------------------
Distributions to shareholders from net realized gain on investments and
futures contracts (0.34) --
- -------------------------------------------------------------------------- ------ -----
Total distributions (0.61) (0.07 )
- -------------------------------------------------------------------------- ------ -----
NET ASSET VALUE, END OF PERIOD $12.02 $12.24
- -------------------------------------------------------------------------- ------ -----
TOTAL RETURN** 3.30% 1.70 %
- --------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------------
Expenses 0.62% 0.61 %(b)
- --------------------------------------------------------------------------
Net investment income 2.35% 1.52 %(b)
- --------------------------------------------------------------------------
Expense waiver/reimbursement(a) 0.26% 0.09 %(b)
- --------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------
Net assets, end of period (000 omitted) $8,617 $2,493
- --------------------------------------------------------------------------
Portfolio turnover rate 2% 13 %
- --------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from August 30, 1993 (date of initial
public investment) to October 31, 1993.
** Based on net asset value, which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Computed on an annualized basis.
(c) Per share information presented is based upon the monthly average number of
shares outstanding due to large fluctuations in the number of shares
outstanding during the period.
Further information about the Fund's performance is contained in the Fund's
annual report for the fiscal year ended October 31, 1994, which can be obtained
free of charge.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--81.1%
- ----------------------------------------------------------------------------------
COMMERCIAL SERVICES--1.4%
------------------------------------------------------------------
5,600 Alco Standard Corp. $ 319,200
------------------------------------------------------------------
52,300 American Express Co. 1,608,225
------------------------------------------------------------------
8,900 Deluxe Corp. 251,425
------------------------------------------------------------------
16,700 Donnelley (R.R.) & Sons Co. 523,963
------------------------------------------------------------------
10,700 Dow Jones & Co. 319,662
------------------------------------------------------------------
19,200 Dun & Bradstreet Corp. 1,125,600
------------------------------------------------------------------
4,000 Fleming Cos., Inc. 96,000
------------------------------------------------------------------
5,600 Grainger, W.W., Inc. 308,000
------------------------------------------------------------------
3,600 Handleman Co. 40,500
------------------------------------------------------------------
3,500 Harland, John H. Co. 74,812
------------------------------------------------------------------
8,100 Interpublic Group Cos., Inc. 267,300
------------------------------------------------------------------
5,300 McGraw-Hill, Inc. 396,175
------------------------------------------------------------------
10,700 Moore Corp. Ltd. 193,938
------------------------------------------------------------------
4,700 Ogden Corp. 101,050
------------------------------------------------------------------
6,250 Safety-Kleen Corp. 86,719
------------------------------------------------------------------
7,700 Super Valu Stores, Inc. 186,725
------------------------------------------------------------------
20,000 Sysco Corp. 497,500
------------------------------------------------------------------ ------------
Total 6,396,794
------------------------------------------------------------------ ------------
CONSUMER DURABLES--2.7%
------------------------------------------------------------------
7,900 American Greetings Corp., Class A 216,262
------------------------------------------------------------------
1,537 Bassett Furniture Industries, Inc. 41,883
------------------------------------------------------------------
6,400 Bausch & Lomb, Inc. 208,000
------------------------------------------------------------------
9,000 Black & Decker Corp. 226,125
------------------------------------------------------------------
1,600 Briggs & Stratton Corp. 111,200
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
CONSUMER DURABLES--CONTINUED
------------------------------------------------------------------
10,300 Brunswick Corp. $ 211,150
------------------------------------------------------------------
3,400 Centex Corp. 75,650
------------------------------------------------------------------
37,800 Chrysler Corp. 1,842,750
------------------------------------------------------------------
9,000 Cooper Tire & Rubber Co. 221,625
------------------------------------------------------------------
35,300 Eastman Kodak Co. 1,698,812
------------------------------------------------------------------
6,300 Echlin, Inc. 193,725
------------------------------------------------------------------
4,900 Fleetwood Enterprises, Inc. 112,700
------------------------------------------------------------------
106,000 Ford Motor Co. 3,127,000
------------------------------------------------------------------
13,400 Genuine Parts Co. 484,075
------------------------------------------------------------------
16,100 Goodyear Tire & Rubber Co. 563,500
------------------------------------------------------------------
9,400 Hasbro, Inc. 310,200
------------------------------------------------------------------
4,900 Jostens, Inc. 84,525
------------------------------------------------------------------
3,700 Kaufman and Broad Homes, Inc. 48,100
------------------------------------------------------------------
17,952 Mattel, Inc. 525,096
------------------------------------------------------------------
11,500 Maytag Corp. 182,563
------------------------------------------------------------------
17,000 Newell Co. 357,000
------------------------------------------------------------------
2,100 Outboard Marine Corp. 43,312
------------------------------------------------------------------
5,000 Polaroid Corp. 168,125
------------------------------------------------------------------
3,000 Pulte Corp. 61,875
------------------------------------------------------------------
17,300 Rubbermaid, Inc. 475,750
------------------------------------------------------------------
1,200 Skyline Corp. 23,700
------------------------------------------------------------------
4,600 Snap-On Tools Corp. 146,050
------------------------------------------------------------------
1,500 SPX Corp. 26,063
------------------------------------------------------------------
4,800 Stanley Works 190,800
------------------------------------------------------------------
7,600 Whirlpool Corp. 395,200
------------------------------------------------------------------
3,300 * Zenith Electronics Corp. 46,200
------------------------------------------------------------------ ------------
Total 12,419,016
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
CONSUMER NON-DURABLES--9.5%
------------------------------------------------------------------
3,100 Alberto-Culver Co., Class B $ 78,662
------------------------------------------------------------------
21,700 American Brands Inc. 754,075
------------------------------------------------------------------
29,100 Anheuser-Busch Companies, Inc. 1,476,825
------------------------------------------------------------------
7,800 Avon Products, Inc. 493,350
------------------------------------------------------------------
15,200 Borden, Inc. 205,200
------------------------------------------------------------------
1,900 Brown Group, Inc. 64,362
------------------------------------------------------------------
6,900 Brown-Forman Corp., Class B 212,175
------------------------------------------------------------------
27,100 Campbell Soup Co. 1,117,875
------------------------------------------------------------------
5,900 Clorox Co. 318,600
------------------------------------------------------------------
140,000 Coca-Cola Co. 7,035,000
------------------------------------------------------------------
16,700 Colgate-Palmolive Co. 1,018,700
------------------------------------------------------------------
27,100 ConAgra, Inc. 843,488
------------------------------------------------------------------
4,100 Coors (Adolph) Col., Class B 70,725
------------------------------------------------------------------
16,500 CPC International, Inc. 882,750
------------------------------------------------------------------
17,300 General Mills, Inc. 968,800
------------------------------------------------------------------
23,700 Gillette Co. 1,762,688
------------------------------------------------------------------
3,400 * Hartmarx Corp. 19,550
------------------------------------------------------------------
27,400 Heinz, H.J. Co. 1,017,225
------------------------------------------------------------------
9,700 Hershey Foods Corp. 458,325
------------------------------------------------------------------
12,300 International Flavors & Fragrances, Inc. 539,662
------------------------------------------------------------------
24,800 Kellogg Co. 1,457,000
------------------------------------------------------------------
8,800 Liz Claiborne, Inc. 203,500
------------------------------------------------------------------
8,200 Nike, Inc., Class B 499,175
------------------------------------------------------------------
1,600 Oshkosh B'Gosh, Inc., Class A 24,000
------------------------------------------------------------------
85,400 PepsiCo, Inc. 2,989,000
------------------------------------------------------------------
11,500 Pet, Inc. 198,375
------------------------------------------------------------------
94,300 Philip Morris 5,775,875
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
CONSUMER NON-DURABLES--CONTINUED
------------------------------------------------------------------
73,400 Procter & Gamble Co. $ 4,587,500
------------------------------------------------------------------
7,800 Quaker Oats Co. 584,025
------------------------------------------------------------------
11,200 Ralston Purina Co. 476,000
------------------------------------------------------------------
9,300 Reebok International Ltd. 370,837
------------------------------------------------------------------
4,400 Russell Corp. 132,000
------------------------------------------------------------------
52,300 Sara Lee Corp. 1,287,887
------------------------------------------------------------------
40,300 Seagram Co., Ltd. 1,244,263
------------------------------------------------------------------
5,500 Stride Rite Corp. 76,312
------------------------------------------------------------------
17,200 Unilever N.V. 2,042,500
------------------------------------------------------------------
22,500 UST, Inc. 596,250
------------------------------------------------------------------
6,900 V.F. Corp. 349,313
------------------------------------------------------------------
12,500 Wrigley (Wm.), Jr. Co. 564,063
------------------------------------------------------------------ ------------
Total 42,795,912
------------------------------------------------------------------ ------------
CONSUMER SERVICES--3.4%
------------------------------------------------------------------
5,000 * Bally Entertainment Group 35,000
------------------------------------------------------------------
11,400 Block (H&R), Inc. 505,875
------------------------------------------------------------------
18,000 Capital Cities/ABC, Inc. 1,496,250
------------------------------------------------------------------
7,040 CBS, Inc. 421,520
------------------------------------------------------------------
23,550 * Comcast Corp., Class A 385,631
------------------------------------------------------------------
57,700 Disney (Walt) Co. 2,271,937
------------------------------------------------------------------
15,800 Gannett Co., Inc. 758,400
------------------------------------------------------------------
5,100 Hilton Hotels Corp. 309,187
------------------------------------------------------------------
4,050 * King World Productions, Inc. 143,775
------------------------------------------------------------------
5,900 Knight-Ridder, Inc. 303,850
------------------------------------------------------------------
2,950 Luby's Cafeterias, Inc. 68,219
------------------------------------------------------------------
12,500 Marriott Corp. 365,625
------------------------------------------------------------------
76,200 McDonald's Corp. 2,190,750
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
CONSUMER SERVICES--CONTINUED
------------------------------------------------------------------
1,600 Meredith Corp. $ 78,400
------------------------------------------------------------------
3,200 * National Education Corp. 15,600
------------------------------------------------------------------
11,300 New York Times Co., Class A 255,663
------------------------------------------------------------------
10,950 * Promus Cos., Inc. 324,394
------------------------------------------------------------------
5,700 * Ryan's Family Steak Houses, Inc. 35,625
------------------------------------------------------------------
9,000 Service Corp. International 239,625
------------------------------------------------------------------
4,300 * Shoney's, Inc. 64,500
------------------------------------------------------------------
48,200 * Tele-Communications, Inc., Class A 1,090,525
------------------------------------------------------------------
40,340 Time Warner, Inc. 1,432,070
------------------------------------------------------------------
13,800 Times Mirror Co., Class A 450,225
------------------------------------------------------------------
7,200 Tribune Co. 378,900
------------------------------------------------------------------
36,868 * Viacom, Inc. 1,447,069
------------------------------------------------------------------
1,936 * Viacom, Inc., Class A 77,682
------------------------------------------------------------------
24,200 * Viacom, Inc., Rights 31,763
------------------------------------------------------------------
10,700 Wendy's International, Inc. 157,825
------------------------------------------------------------------ ------------
Total 15,335,885
------------------------------------------------------------------ ------------
ELECTRONIC TECHNOLOGY--6.7%
------------------------------------------------------------------
9,700 * Advanced Micro Devices, Inc. 255,838
------------------------------------------------------------------
12,200 * Amdahl Corp. 123,525
------------------------------------------------------------------
11,300 AMP, Inc. 854,562
------------------------------------------------------------------
2,700 * Andrew Corp. 139,725
------------------------------------------------------------------
12,500 Apple Computer, Inc. 539,844
------------------------------------------------------------------
36,600 Boeing Co. 1,605,825
------------------------------------------------------------------
4,600 * Ceridian Corp. 119,600
------------------------------------------------------------------
26,600 * Cisco Systems, Inc. 801,325
------------------------------------------------------------------
26,700 * Compaq Computer Corp. 1,071,338
------------------------------------------------------------------
5,400 * Computer Sciences Corp. 251,100
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
------------------------------------------------------------------
2,800 * Cray Research, Inc. $ 53,550
------------------------------------------------------------------
3,800 * Data General Corp. 37,050
------------------------------------------------------------------
14,200 * Digital Equipment Corp. 434,875
------------------------------------------------------------------
11,800 * DSC Communications Corp. 362,850
------------------------------------------------------------------
3,600 E-Systems, Inc. 149,400
------------------------------------------------------------------
6,100 EG & G, Inc. 98,362
------------------------------------------------------------------
6,720 General Dynamics Corp. 284,760
------------------------------------------------------------------
4,300 Harris Corp. 184,362
------------------------------------------------------------------
27,300 Hewlett-Packard Co. 2,668,575
------------------------------------------------------------------
45,400 Intel Corp. 2,820,475
------------------------------------------------------------------
5,100 * Intergraph Corp. 43,987
------------------------------------------------------------------
62,000 International Business Machines Corp. 4,619,000
------------------------------------------------------------------
6,700 Lockheed Corp. 482,400
------------------------------------------------------------------
9,000 Loral Corp. 356,625
------------------------------------------------------------------
2,600 * M/A Communications, Inc. 18,200
------------------------------------------------------------------
10,300 Martin-Marietta Corp. 472,513
------------------------------------------------------------------
4,200 McDonnell-Douglas Corp. 592,200
------------------------------------------------------------------
10,700 Micron Technology, Inc. 423,988
------------------------------------------------------------------
60,000 Motorola, Inc. 3,532,500
------------------------------------------------------------------
11,800 * National Semiconductor Corp. 207,975
------------------------------------------------------------------
26,900 Northern Telecom, Ltd. 971,763
------------------------------------------------------------------
5,200 Northrop Corp. 228,150
------------------------------------------------------------------
39,600 * Novell, Inc. 732,600
------------------------------------------------------------------
4,800 Perkin-Elmer Corp. 141,600
------------------------------------------------------------------
14,600 Raytheon Co. 930,750
------------------------------------------------------------------
23,700 Rockwell International Corp. 826,537
------------------------------------------------------------------
7,900 Scientific-Atlanta, Inc. 170,838
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
------------------------------------------------------------------
11,400 * Sun Microsystems, Inc. $ 373,350
------------------------------------------------------------------
12,200 * Tandem Computers, Inc. 215,025
------------------------------------------------------------------
3,300 Tektronix, Inc. 125,400
------------------------------------------------------------------
9,700 Texas Instruments, Inc. 726,287
------------------------------------------------------------------
17,500 * Unisys Corp. 185,938
------------------------------------------------------------------
13,300 United Technologies Corp. 837,900
------------------------------------------------------------------
4,900 * Western Atlas, Inc. 225,400
------------------------------------------------------------------ ------------
Total 30,297,867
------------------------------------------------------------------ ------------
ENERGY MINERALS--7.7%
------------------------------------------------------------------
10,000 Amerada-Hess Corp. 497,500
------------------------------------------------------------------
53,500 Amoco Corp. 3,390,563
------------------------------------------------------------------
6,500 Ashland Oil, Inc. 252,688
------------------------------------------------------------------
17,100 Atlantic Richfield Co. 1,853,213
------------------------------------------------------------------
13,900 Burlington Resources 587,275
------------------------------------------------------------------
70,000 Chevron Corp. 3,150,000
------------------------------------------------------------------
133,700 Exxon Corp. 8,406,387
------------------------------------------------------------------
5,200 Kerr-McGee Corp. 255,450
------------------------------------------------------------------
3,600 Louisiana Land & Exploration Co. 163,350
------------------------------------------------------------------
14,400 * Maxus Energy Corp. 68,400
------------------------------------------------------------------
43,000 Mobil Corp. 3,698,000
------------------------------------------------------------------
32,800 Occidental Petroleum Corp. 717,500
------------------------------------------------------------------
10,400 * Oryx Energy Co. 150,800
------------------------------------------------------------------
4,900 Pennzoil Co. 252,350
------------------------------------------------------------------
28,100 Phillips Petroleum Co. 1,036,187
------------------------------------------------------------------
4,400 Pittston Co. 121,550
------------------------------------------------------------------
57,700 Royal Dutch Petroleum Co. 6,722,050
------------------------------------------------------------------
9,712 Santa Fe Energy Resource, Inc. 88,622
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
ENERGY MINERALS--CONTINUED
------------------------------------------------------------------
11,500 Sun Co., Inc. $ 369,438
------------------------------------------------------------------
27,900 Texaco, Inc. 1,823,962
------------------------------------------------------------------
25,900 Unocal Corp. 757,575
------------------------------------------------------------------
30,800 USX Corp. -- Marathon Group 577,500
------------------------------------------------------------------ ------------
Total 34,940,360
------------------------------------------------------------------ ------------
FINANCE--8.4%
------------------------------------------------------------------
11,900 AEtna Life & Casualty Co. 548,888
------------------------------------------------------------------
12,600 Ahmanson (H.F.) & Co. 240,975
------------------------------------------------------------------
4,400 Alexander & Alexander Services, Inc. 89,100
------------------------------------------------------------------
23,400 American General Corp. 643,500
------------------------------------------------------------------
34,162 American International Group, Inc. 3,198,417
------------------------------------------------------------------
40,425 Banc One Funding Corp. 1,167,272
------------------------------------------------------------------
11,300 Bank of Boston Corp. 324,875
------------------------------------------------------------------
38,276 BankAmerica Corp. 1,665,006
------------------------------------------------------------------
8,900 Bankers Trust New York Corp. 594,075
------------------------------------------------------------------
10,500 Barnett Banks, Inc. 435,750
------------------------------------------------------------------
5,600 Beneficial Corp. 219,100
------------------------------------------------------------------
10,500 Boatmen's Bancshares, Inc. 311,063
------------------------------------------------------------------
19,700 Chase Manhattan Corp. 709,200
------------------------------------------------------------------
27,090 Chemical Banking Corp. 1,029,420
------------------------------------------------------------------
9,400 Chubb Corp. 656,825
------------------------------------------------------------------
7,700 CIGNA Corp. 507,237
------------------------------------------------------------------
40,500 Citicorp 1,933,875
------------------------------------------------------------------
5,900 Continental Corp. 89,237
------------------------------------------------------------------
12,600 Corestates Financial Corp. 326,025
------------------------------------------------------------------
18,321 Dean Witter, Discover & Co. 707,649
------------------------------------------------------------------
19,300 Federal Home Loan Mortgage Corp. 1,051,850
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
FINANCE--CONTINUED
------------------------------------------------------------------
29,400 Federal National Mortgage Association $ 2,234,400
------------------------------------------------------------------
8,600 First Fidelity Bancorporation 387,000
------------------------------------------------------------------
8,200 First Interstate Bancorp 656,000
------------------------------------------------------------------
18,100 First Union Corp. 814,500
------------------------------------------------------------------
14,700 Fleet/Norstar Financial Group, Inc. 503,475
------------------------------------------------------------------
9,100 General RE Corp. 1,019,200
------------------------------------------------------------------
6,900 Golden West Financial Corp. 269,100
------------------------------------------------------------------
14,200 Great Western Financial Corp. 253,825
------------------------------------------------------------------
10,000 Household International, Inc. 351,250
------------------------------------------------------------------
20,700 J.P. Morgan and Co., Inc. 1,280,813
------------------------------------------------------------------
5,450 Jefferson-Pilot Corp. 295,662
------------------------------------------------------------------
27,000 KeyCorp 772,875
------------------------------------------------------------------
10,100 Lincoln National Corp. 366,125
------------------------------------------------------------------
7,900 Marsh & McLennan Cos., Inc. 592,500
------------------------------------------------------------------
16,050 MBNA Corp. 429,338
------------------------------------------------------------------
6,800 Mellon Bank Corp. 378,250
------------------------------------------------------------------
22,800 Merrill Lynch & Co., Inc. 1993-1 897,750
------------------------------------------------------------------
15,900 National City Corp. 431,288
------------------------------------------------------------------
28,946 NationsBank Credit Card Master Trust 1993-1 1,432,827
------------------------------------------------------------------
17,250 NBD Bancorp, Inc. 530,438
------------------------------------------------------------------
33,100 Norwest Corp. 810,950
------------------------------------------------------------------
25,200 PNC Bank Corp. 592,200
------------------------------------------------------------------
10,900 Providian Corp. 346,075
------------------------------------------------------------------
8,200 Ryder Systems, Inc. 192,700
------------------------------------------------------------------
6,800 SAFECO Corp. 340,850
------------------------------------------------------------------
11,900 Salomon, Inc. 467,075
------------------------------------------------------------------
10,100 Shawmut National Grantor Trust 1992-A 208,313
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
FINANCE--CONTINUED
------------------------------------------------------------------
9,000 St. Paul Companies, Inc. $ 392,625
------------------------------------------------------------------
13,500 SunTrust Banks, Inc. 683,437
------------------------------------------------------------------
7,950 Torchmark Corp. 293,156
------------------------------------------------------------------
8,400 Transamerica Corp. 412,650
------------------------------------------------------------------
34,278 Travelers, Inc. 1,191,161
------------------------------------------------------------------
10,650 U.S. Bancorp. 263,588
------------------------------------------------------------------
8,200 Unum Corp. 376,175
------------------------------------------------------------------
9,100 USF&G Corp. 123,988
------------------------------------------------------------------
2,400 USLIFE Corp. 78,600
------------------------------------------------------------------
18,600 Wachovia Corp. 623,100
------------------------------------------------------------------
6,000 Wells Fargo & Co. 891,750
------------------------------------------------------------------ ------------
Total 38,634,348
------------------------------------------------------------------ ------------
HEALTH SERVICES--0.9%
------------------------------------------------------------------
8,800 * Beverly Enterprises, Inc. 133,100
------------------------------------------------------------------
36,138 Columbia HCA Healthcare Corp. 1,504,244
------------------------------------------------------------------
4,600 Community Psychiatric Centers 45,425
------------------------------------------------------------------
6,150 Manor Care, Inc. 169,125
------------------------------------------------------------------
17,900 * National Medical Enterprises, Inc. 259,550
------------------------------------------------------------------
2,400 Shared Medical Systems Corp. 70,800
------------------------------------------------------------------
17,300 U.S. Healthcare, Inc. 817,425
------------------------------------------------------------------
17,800 United Healthcare Corp. 938,950
------------------------------------------------------------------ ------------
Total 3,938,619
------------------------------------------------------------------ ------------
HEALTH TECHNOLOGY--6.3%
------------------------------------------------------------------
89,500 Abbott Laboratories 2,774,500
------------------------------------------------------------------
7,100 Allergan, Inc. 187,263
------------------------------------------------------------------
8,100 * Alza Corp. 143,775
------------------------------------------------------------------
33,300 American Home Products Corp. 2,114,550
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
HEALTH TECHNOLOGY--CONTINUED
------------------------------------------------------------------
14,600 * Amgen, Inc. $ 813,950
------------------------------------------------------------------
5,600 Bard (C.R.), Inc. 137,200
------------------------------------------------------------------
29,800 Baxter International, Inc. 774,800
------------------------------------------------------------------
8,100 Becton, Dickinson & Co. 382,725
------------------------------------------------------------------
12,400 * Biomet, Inc. 142,600
------------------------------------------------------------------
55,800 Bristol-Myers Squibb Co. 3,257,325
------------------------------------------------------------------
70,600 Johnson & Johnson 3,856,525
------------------------------------------------------------------
31,500 Lilly (Eli) & Co. 1,953,000
------------------------------------------------------------------
8,200 Mallinckrodt Group, Inc. 249,075
------------------------------------------------------------------
12,400 Medtronic, Inc. 646,350
------------------------------------------------------------------
137,500 Merck & Co., Inc. 4,915,625
------------------------------------------------------------------
34,200 Pfizer, Inc. 2,535,075
------------------------------------------------------------------
21,000 Schering Plough Corp. 1,496,250
------------------------------------------------------------------
5,000 St. Jude Medical, Inc. 186,250
------------------------------------------------------------------
6,000 United States Surgical Corp. 135,000
------------------------------------------------------------------
18,700 Upjohn Co. 617,100
------------------------------------------------------------------
14,600 Warner-Lambert Co. 1,113,250
------------------------------------------------------------------ ------------
Total 28,432,188
------------------------------------------------------------------ ------------
INDUSTRIAL SERVICES--1.2%
------------------------------------------------------------------
15,100 Baker Hughes, Inc. 309,550
------------------------------------------------------------------
18,600 Browning-Ferris Industries, Inc. 590,550
------------------------------------------------------------------
8,800 Fluor Corp. 435,600
------------------------------------------------------------------
3,800 Foster Wheeler Corp. 136,800
------------------------------------------------------------------
12,300 Halliburton Co. 455,100
------------------------------------------------------------------
2,600 Helmerich & Payne, Inc. 81,250
------------------------------------------------------------------
5,600 McDermott International, Inc. 143,500
------------------------------------------------------------------
3,400 Morrison Knudsen Corp. 53,125
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
INDUSTRIAL SERVICES--CONTINUED
------------------------------------------------------------------
6,500 Rollins Environmental Services, Inc. $ 38,188
------------------------------------------------------------------
9,000 * Rowan Companies, Inc. 68,625
------------------------------------------------------------------
26,100 Schlumberger, Ltd. 1,533,375
------------------------------------------------------------------
51,900 WMX Technologies, Inc. 1,524,562
------------------------------------------------------------------
1,300 Zurn Industries, Inc. 23,725
------------------------------------------------------------------ ------------
Total 5,393,950
------------------------------------------------------------------ ------------
NON-ENERGY MINERALS--2.0%
------------------------------------------------------------------
24,100 Alcan Aluminum Ltd. 644,675
------------------------------------------------------------------
9,500 Aluminum Co. of America 809,875
------------------------------------------------------------------
30,300 American Barrick Resource Corp. 723,413
------------------------------------------------------------------
11,200 * Armco, Inc. 79,800
------------------------------------------------------------------
4,500 ASARCO, Inc. 141,187
------------------------------------------------------------------
11,400 * Bethlehem Steel Corp. 216,600
------------------------------------------------------------------
9,850 Cyprus Minerals 262,256
------------------------------------------------------------------
12,000 Echo Bay Mines, Ltd. 147,000
------------------------------------------------------------------
9,700 Georgia-Pacific Corp. 716,587
------------------------------------------------------------------
14,700 Homestake Mining Co. 275,625
------------------------------------------------------------------
12,400 Inco Ltd. 373,550
------------------------------------------------------------------
4,300 * Inland Steel Industries, Inc. 153,725
------------------------------------------------------------------
11,800 Louisiana-Pacific Corp. 361,375
------------------------------------------------------------------
9,111 Newmont Mining Corp. 376,968
------------------------------------------------------------------
9,400 Nucor Corp. 580,450
------------------------------------------------------------------
4,600 * Owens-Corning Fiberglass Corp. 148,925
------------------------------------------------------------------
7,600 Phelps Dodge Corp. 466,450
------------------------------------------------------------------
25,600 Placer Dome, Inc. 553,600
------------------------------------------------------------------
6,400 Reynolds Metals Co. 354,400
------------------------------------------------------------------
11,835 * Santa Fe Pacific Gold 170,128
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
NON-ENERGY MINERALS--CONTINUED
------------------------------------------------------------------
7,920 USX-U.S. Steel Group $ 297,000
------------------------------------------------------------------
22,100 Weyerhaeuser Co. 867,425
------------------------------------------------------------------
9,750 Worthington Industries, Inc. 216,937
------------------------------------------------------------------ ------------
Total 8,937,951
------------------------------------------------------------------ ------------
PROCESS INDUSTRIES--4.9%
------------------------------------------------------------------
12,300 Air Products & Chemicals, Inc. 587,325
------------------------------------------------------------------
38,746 Archer-Daniels-Midland Co. 1,109,104
------------------------------------------------------------------
6,300 Avery Dennison Corp. 211,838
------------------------------------------------------------------
3,200 Ball Corp. 90,400
------------------------------------------------------------------
5,500 Bemis Co., Inc. 136,125
------------------------------------------------------------------
4,100 Boise Cascade Corp. 108,650
------------------------------------------------------------------
10,000 Champion International Corp. 370,000
------------------------------------------------------------------
21,700 Corning, Inc. 737,800
------------------------------------------------------------------
9,500 * Crown Cork & Seal Co., Inc. 369,312
------------------------------------------------------------------
29,500 Dow Chemical Co. 2,168,250
------------------------------------------------------------------
72,900 Du Pont (E.I.) de Nemours 4,346,662
------------------------------------------------------------------
8,825 Eastman Chemical Co. 476,550
------------------------------------------------------------------
6,800 Ecolab, Inc. 145,350
------------------------------------------------------------------
10,375 Engelhard Corp. 243,813
------------------------------------------------------------------
4,500 Federal Paper Board Co., Inc. 135,000
------------------------------------------------------------------
2,200 First Mississippi Corp. 46,200
------------------------------------------------------------------
2,800 Goodrich, (B.F.) Co. 125,650
------------------------------------------------------------------
10,000 Grace (W.R.) & Co. 396,250
------------------------------------------------------------------
7,700 Great Lakes Chemical Corp. 452,375
------------------------------------------------------------------
4,600 Hercules, Inc. 537,050
------------------------------------------------------------------
13,300 International Paper Co. 990,850
------------------------------------------------------------------
8,800 James River Corp. of Virginia 201,300
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
PROCESS INDUSTRIES--CONTINUED
------------------------------------------------------------------
17,300 Kimberly-Clark Corp. $ 890,950
------------------------------------------------------------------
6,400 Mead Corp. 317,600
------------------------------------------------------------------
2,600 Millipore Corp. 133,575
------------------------------------------------------------------
12,900 Monsanto Co. 982,012
------------------------------------------------------------------
15,600 Morton International, Inc. 444,600
------------------------------------------------------------------
7,500 Nalco Chemical Co. 241,875
------------------------------------------------------------------
12,533 Pall Corp. 227,161
------------------------------------------------------------------
9,600 Pioneer Hi-Bred International 321,600
------------------------------------------------------------------
3,100 Potlatch Corp. 118,575
------------------------------------------------------------------
22,800 PPG Industries, Inc. 929,100
------------------------------------------------------------------
14,400 Praxair, Inc. 333,000
------------------------------------------------------------------
7,300 Rohm & Haas Co. 440,737
------------------------------------------------------------------
8,000 Scott Paper Co. 529,000
------------------------------------------------------------------
9,600 Sherwin-Williams Co. 313,200
------------------------------------------------------------------
5,300 Sigma-Aldrich Corp. 184,175
------------------------------------------------------------------
1,900 Springs Industries, Inc., Class A 76,713
------------------------------------------------------------------
9,408 * Stone Container Corp. 157,584
------------------------------------------------------------------
5,900 Temple-Inland, Inc. 278,775
------------------------------------------------------------------
7,500 Union Camp Corp. 356,250
------------------------------------------------------------------
16,300 Union Carbide Corp. 539,937
------------------------------------------------------------------
7,200 Westvaco Corp. 252,000
------------------------------------------------------------------ ------------
Total 22,054,273
------------------------------------------------------------------ ------------
PRODUCER MANUFACTURING--6.3%
------------------------------------------------------------------
30,400 Allied-Signal, Inc. 1,052,600
------------------------------------------------------------------
4,000 Armstrong World Industries, Inc. 166,000
------------------------------------------------------------------
21,800 Caterpillar, Inc. 1,302,550
------------------------------------------------------------------
3,600 Cincinnati Milacron, Inc. 98,550
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
------------------------------------------------------------------
1,900 * Clark Equipment Co. $ 133,237
------------------------------------------------------------------
12,200 Cooper Industries, Inc. 455,975
------------------------------------------------------------------
3,200 Crane Co. 86,800
------------------------------------------------------------------
3,800 Cummins Engine Co., Inc. 161,500
------------------------------------------------------------------
10,000 Dana Corp. 256,250
------------------------------------------------------------------
9,000 Deere & Co. 645,750
------------------------------------------------------------------
10,200 Dial Corp. Del. 210,375
------------------------------------------------------------------
6,100 Dover Corp. 338,550
------------------------------------------------------------------
18,700 Dresser Industries, Inc. 395,038
------------------------------------------------------------------
7,500 Eaton Corp. 392,813
------------------------------------------------------------------
24,200 Emerson Electric Co. 1,470,150
------------------------------------------------------------------
3,900 * FMC Corp. 237,900
------------------------------------------------------------------
183,800 General Electric Co. 8,983,225
------------------------------------------------------------------
4,800 General Signal Corp. 172,800
------------------------------------------------------------------
3,700 Giddings & Lewis, Inc. 57,350
------------------------------------------------------------------
2,578 Harnischfeger Industries, Inc. 64,450
------------------------------------------------------------------
14,500 Honeywell, Inc. 467,625
------------------------------------------------------------------
12,100 Illinois Tool Works, Inc. 542,987
------------------------------------------------------------------
11,300 Ingersoll-Rand Co. 402,562
------------------------------------------------------------------
12,800 ITT Corp. 1,129,600
------------------------------------------------------------------
4,300 Johnson Controls, Inc. 213,925
------------------------------------------------------------------
16,400 Masco Industries, Inc. 389,500
------------------------------------------------------------------
46,800 Minnesota Mining & Manufacturing Co. 2,591,550
------------------------------------------------------------------
1,000 NACCO Industries, Inc., Class A 59,000
------------------------------------------------------------------
5,300 National Service Industries, Inc. 141,775
------------------------------------------------------------------
7,870 * Navistar International Corp. 103,294
------------------------------------------------------------------
4,140 PACCAR, Inc. 185,265
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
------------------------------------------------------------------
5,200 Parker-Hannifin Corp. $ 243,100
------------------------------------------------------------------
17,000 Pitney Bowes, Inc. 573,750
------------------------------------------------------------------
4,500 Raychem Corp. 166,500
------------------------------------------------------------------
6,000 Teledyne, Inc. 102,750
------------------------------------------------------------------
18,200 Tenneco, Inc. 805,350
------------------------------------------------------------------
9,400 Textron, Inc. 479,400
------------------------------------------------------------------
2,000 Thomas & Betts Corp. 142,500
------------------------------------------------------------------
3,300 Timken Co. 115,087
------------------------------------------------------------------
3,100 Trinova Corp. 108,500
------------------------------------------------------------------
6,900 TRW, Inc. 491,625
------------------------------------------------------------------
5,000 Tyco Laboratories, Inc. 241,250
------------------------------------------------------------------
4,680 * Varity Corp. 179,010
------------------------------------------------------------------
37,700 Westinghouse Electric Corp. 532,513
------------------------------------------------------------------
11,500 Whitman Corp. 189,750
------------------------------------------------------------------
11,200 Xerox Corp. 1,148,000
------------------------------------------------------------------ ------------
Total 28,428,031
------------------------------------------------------------------ ------------
RETAIL TRADE--5.1%
------------------------------------------------------------------
27,200 Albertsons, Inc. 816,000
------------------------------------------------------------------
15,200 American Stores Co. 412,300
------------------------------------------------------------------
8,400 Brunos, Inc. 80,850
------------------------------------------------------------------
11,000 Charming Shoppes, Inc. 79,750
------------------------------------------------------------------
10,300 Circuit City Stores, Inc. 262,650
------------------------------------------------------------------
7,700 Dayton-Hudson Corp. 596,750
------------------------------------------------------------------
12,100 Dillard Department Stores, Inc., Class A 320,650
------------------------------------------------------------------
15,600 Gap (The), Inc. 526,500
------------------------------------------------------------------
6,400 Giant Foods, Inc., Class A 147,200
------------------------------------------------------------------
4,100 Great Atlantic & Pacific Tea Co., Inc. 107,113
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
RETAIL TRADE--CONTINUED
------------------------------------------------------------------
8,200 Harcourt General, Inc. $ 303,400
------------------------------------------------------------------
48,100 Home Depot, Inc. 2,188,550
------------------------------------------------------------------
25,300 J.C. Penny Co. 1,280,812
------------------------------------------------------------------
43,900 K Mart Corp. 718,862
------------------------------------------------------------------
11,400 * Kroger Co., Inc. 297,825
------------------------------------------------------------------
39,100 Limited, Inc. 718,462
------------------------------------------------------------------
2,200 Longs Drug Stores Corp. 76,450
------------------------------------------------------------------
15,800 Lowe's Cos. Inc. 628,050
------------------------------------------------------------------
26,700 May Department Stores Co. 1,004,588
------------------------------------------------------------------
11,300 Melville Corp. 377,137
------------------------------------------------------------------
4,000 Mercantile Stores Co., Inc. 182,000
------------------------------------------------------------------
8,800 Nordstrom, Inc. 433,400
------------------------------------------------------------------
6,500 Pep Boys-Manny Moe & Jack 232,375
------------------------------------------------------------------
6,800 Premark International, Inc. 304,300
------------------------------------------------------------------
23,350 * Price Co. 367,763
------------------------------------------------------------------
9,500 Rite Aid Corp. 228,000
------------------------------------------------------------------
37,700 Sears, Roebuck & Co. 1,866,150
------------------------------------------------------------------
6,865 Tandy Corp. 303,776
------------------------------------------------------------------
7,900 TJX Cos., Inc. 124,425
------------------------------------------------------------------
31,400 * Toys "R" Us, Inc. 1,208,900
------------------------------------------------------------------
247,600 Wal-Mart Stores, Inc. 5,818,600
------------------------------------------------------------------
13,200 Walgreen Co. 547,800
------------------------------------------------------------------
8,200 Winn-Dixie Stores, Inc. 433,575
------------------------------------------------------------------
14,100 Woolworth (F.W.) Co. 218,550
------------------------------------------------------------------ ------------
Total 23,213,513
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
TECHNOLOGY SERVICES--2.5%
------------------------------------------------------------------
5,200 Autodesk, Inc. $ 179,400
------------------------------------------------------------------
15,300 Automatic Data Processing, Inc. 893,137
------------------------------------------------------------------
17,900 Computer Associates International, Inc. 888,287
------------------------------------------------------------------
11,600 First Data Corp. 581,450
------------------------------------------------------------------
80,100 General Motors Corp. 3,163,950
------------------------------------------------------------------
215 * Harris Computer Systems Corp. 3,010
------------------------------------------------------------------
4,500 * Lotus Development Corp. 172,125
------------------------------------------------------------------
62,000 * Microsoft Corp. 3,906,000
------------------------------------------------------------------
30,600 * Oracle Systems Corp. 1,407,600
------------------------------------------------------------------ ------------
Total 11,194,959
------------------------------------------------------------------ ------------
TRANSPORTATION--1.3%
------------------------------------------------------------------
8,100 * AMR Corp. 446,512
------------------------------------------------------------------
9,600 Burlington Northern, Inc. 478,800
------------------------------------------------------------------
3,800 * Consolidated Freightways, Inc. 85,025
------------------------------------------------------------------
8,600 Consolidated Rail Corp. 467,625
------------------------------------------------------------------
11,200 CSX Corp. 812,000
------------------------------------------------------------------
5,400 Delta Air Lines, Inc. 281,475
------------------------------------------------------------------
5,900 * Federal Express Corp. 358,425
------------------------------------------------------------------
15,000 Norfolk Southern Corp. 945,000
------------------------------------------------------------------
4,200 Roadway Services, Inc. 240,450
------------------------------------------------------------------
19,725 * Sante Fe Southern Pacific Corp. 303,272
------------------------------------------------------------------
13,200 Southwest Airlines, Inc. 311,850
------------------------------------------------------------------
22,100 Union Pacific Corp. 1,080,137
------------------------------------------------------------------
6,200 * USAir Group, Inc. 27,125
------------------------------------------------------------------
3,000 Yellow Corp. 58,500
------------------------------------------------------------------ ------------
Total 5,896,196
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
UTILITIES--10.8%
------------------------------------------------------------------
167,278 AT&T Corp. $ 9,200,290
------------------------------------------------------------------
52,800 * Airtouch Communications, Inc. 1,577,400
------------------------------------------------------------------
19,900 American Electric Power Co., Inc. 636,800
------------------------------------------------------------------
58,400 Ameritech Corp. 2,357,900
------------------------------------------------------------------
15,550 Baltimore Gas & Electric Co. 361,538
------------------------------------------------------------------
46,800 Bell Atlantic Corp. 2,451,150
------------------------------------------------------------------
53,400 BellSouth Corp. 2,843,550
------------------------------------------------------------------
17,300 Carolina Power & Light Co. 456,287
------------------------------------------------------------------
20,300 Central & SouthWest Corp. 456,750
------------------------------------------------------------------
6,240 Cinergy Corp. 144,307
------------------------------------------------------------------
11,200 Coastal Corp. 319,200
------------------------------------------------------------------
5,400 * Columbia Gas System, Inc. 150,525
------------------------------------------------------------------
25,200 Consolidated Edison Co. 626,850
------------------------------------------------------------------
10,000 Consolidated Natural Gas Co. 362,500
------------------------------------------------------------------
15,800 Detroit Edison Co. 416,725
------------------------------------------------------------------
17,750 Dominion Resources, Inc. 658,969
------------------------------------------------------------------
22,100 Duke Power Co. 875,712
------------------------------------------------------------------
2,400 Eastern Enterprises 62,400
------------------------------------------------------------------
25,600 Enron Corp. 828,800
------------------------------------------------------------------
7,200 Enserch Corp. 102,600
------------------------------------------------------------------
24,800 Entergy Corp. 579,700
------------------------------------------------------------------
20,200 FPL Group, Inc. 669,125
------------------------------------------------------------------
101,700 GTE Corp. 3,127,275
------------------------------------------------------------------
14,000 Houston Industries, Inc. 488,250
------------------------------------------------------------------
57,100 MCI Communications Corp. 1,313,300
------------------------------------------------------------------
15,300 Niagara Mohawk Power Corp. 210,375
------------------------------------------------------------------
6,000 NICOR, Inc. 146,250
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
UTILITIES--CONTINUED
------------------------------------------------------------------
13,200 Noram Energy Corp. $ 79,200
------------------------------------------------------------------
7,100 Northern States Power Co. 315,063
------------------------------------------------------------------
44,400 NYNEX Corp. 1,742,700
------------------------------------------------------------------
16,400 Ohio Edison Co. 315,700
------------------------------------------------------------------
2,900 ONEOK, Inc. 51,113
------------------------------------------------------------------
9,000 Pacific Enterprises 193,500
------------------------------------------------------------------
46,600 Pacific Gas & Electric Co. 1,048,500
------------------------------------------------------------------
44,700 Pacific Telesis Group 1,413,637
------------------------------------------------------------------
29,400 Pacificorp 518,175
------------------------------------------------------------------
12,700 Panhandle Eastern Corp. 298,450
------------------------------------------------------------------
23,800 Peco Energy Co. 609,875
------------------------------------------------------------------
3,700 Peoples Energy Corp. 104,525
------------------------------------------------------------------
26,000 Public Service Enterprises Group, Inc. 682,500
------------------------------------------------------------------
48,200 SCE Corp. 668,775
------------------------------------------------------------------
9,400 Sonat, Inc. 305,500
------------------------------------------------------------------
68,800 Southern Co. 1,358,800
------------------------------------------------------------------
64,400 Southwestern Bell Corp. 2,696,750
------------------------------------------------------------------
36,600 Sprint Corp. 1,194,075
------------------------------------------------------------------
24,000 Texas Utilities Co. 783,000
------------------------------------------------------------------
4,300 Transco Energy Co. 61,813
------------------------------------------------------------------
47,200 U.S. West, Inc. 1,775,900
------------------------------------------------------------------
23,000 Unicom Corp. 497,375
------------------------------------------------------------------
11,000 Union Electric Co. 394,625
------------------------------------------------------------------
11,000 Williams Companies, Inc. (The) 319,000
------------------------------------------------------------------ ------------
Total 48,853,079
------------------------------------------------------------------ ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $334,927,884) 367,162,941
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--1.0%
- ----------------------------------------------------------------------------------
$ 4,500,000 United States Treasury Bill, 12/1/1994 (at amortized cost) $ 4,482,938
------------------------------------------------------------------ ------------
**REPURCHASE AGREEMENT--17.9%
- ----------------------------------------------------------------------------------
80,875,000 J.P. Morgan and Co., Inc., 4.82%, dated 10/31/94, due 11/1/94
(at amortized cost) 80,875,000
------------------------------------------------------------------ ------------
TOTAL INVESTMENTS (IDENTIFIED COST $420,285,822) $452,520,879+
------------------------------------------------------------------ ------------
</TABLE>
* Non-income producing securities.
** The repurchase agreement is fully collateralized by U.S. government
obligations. The investment in the repurchase agreement is through
participation in joint accounts with other Federated Investors funds.
+ The cost of investments for federal tax purposes amounts to $420,285,822. The
net unrealized appreciation of investments on a federal tax cost basis
amounts to $32,235,057, which is comprised of $52,103,326 appreciation and
$19,868,269 depreciation at October 31, 1994.
Note: The categories of investments are shown as a percentage of net assets
($452,432,357) at October 31, 1994.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -----------------------------------------------------------------
Investment in repurchase agreements, at amortized cost $ 80,875,000
- -----------------------------------------------------------------
Investments in securities, at value and amortized cost 371,645,879
- ----------------------------------------------------------------- ------------
Total investments, at amortized cost and value
(identified and tax cost $420,285,822) $452,520,879
- --------------------------------------------------------------------------------
Cash 47,765
- --------------------------------------------------------------------------------
Dividends and interest receivable 739,241
- --------------------------------------------------------------------------------
Receivable for Fund shares sold 479,754
- --------------------------------------------------------------------------------
Deferred expenses 1,001
- -------------------------------------------------------------------------------- ------------
Total assets 453,788,640
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for Fund shares redeemed 682,599
- -----------------------------------------------------------------
Payable for daily variation margin on open futures contracts 603,750
- -----------------------------------------------------------------
Accrued expenses 69,934
- ----------------------------------------------------------------- ------------
Total liabilities 1,356,283
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 37,647,505 shares of beneficial interest outstanding $452,432,357
- -------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital $418,267,944
- --------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on investments and futures contracts 32,850,422
- --------------------------------------------------------------------------------
Accumulated undistributed net realized gain (loss) on investments and
futures contracts 352,786
- --------------------------------------------------------------------------------
Undistributed net investment income 961,205
- -------------------------------------------------------------------------------- ------------
Total Net Assets $452,432,357
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
Institutional Shares (net assets of $443,815,104 / 36,930,606 shares of
beneficial interest outstanding) $12.02
- -------------------------------------------------------------------------------- ------------
Institutional Service Shares (net assets of $8,617,253 / 716,899
shares of beneficial interest outstanding) $12.02
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------------------
Dividends $ 9,996,788
- --------------------------------------------------------------------------------------------
Interest 2,932,435
- -------------------------------------------------------------------------------------------- -----------
Total investment income 12,929,223
- --------------------------------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------------------
Management fee $1,287,529
- ------------------------------------------------------------------------------
Trustees' fees 6,387
- ------------------------------------------------------------------------------
Custodian and portfolio accounting fees 154,440
- ------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 42,900
- ------------------------------------------------------------------------------
Fund share registration costs 42,066
- ------------------------------------------------------------------------------
Auditing fees 21,612
- ------------------------------------------------------------------------------
Legal fees 15,260
- ------------------------------------------------------------------------------
Printing and postage 44,070
- ------------------------------------------------------------------------------
Insurance premiums 11,102
- ------------------------------------------------------------------------------
Distribution service fees 15,802
- ------------------------------------------------------------------------------
Taxes 9,804
- ------------------------------------------------------------------------------
Miscellaneous 5,741
- ------------------------------------------------------------------------------
Shareholder services fee 10,144
- ------------------------------------------------------------------------------ ----------
Total expenses 1,666,857
- ------------------------------------------------------------------------------
Deduct--
- ------------------------------------------------------------------------------
Waiver of management fee $289,795
- ------------------------------------------------------------------- --------
Waiver of distribution service fees 10,144 299,939
- ------------------------------------------------------------------- -------- ----------
Net expenses 1,366,918
- -------------------------------------------------------------------------------------------- -----------
Net investment income 11,562,305
- -------------------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES CONTRACTS:
- --------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) 1,025,864
- --------------------------------------------------------------------------------------------
Net realized gain (loss) on futures contracts (identified cost basis) 129,511
- --------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments and futures contracts 3,003,321
- -------------------------------------------------------------------------------------------- -----------
Net realized and unrealized gain (loss) on investments and futures contracts 4,158,696
- -------------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $15,721,001
- -------------------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
------------------------------
1994 1993
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------------------------
Net investment income $ 11,562,305 $ 9,177,268
- ------------------------------------------------------------------------
Net realized gain on investment transactions and futures contracts
($973,460, and $11,617,039 net gains, respectively, as computed for
federal tax purposes) 1,155,375 11,086,529
- ------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments and
futures contracts 3,003,321 26,567,254
- ------------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from operations 15,721,001 46,831,051
- ------------------------------------------------------------------------ ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------------------------
Dividends to shareholders from net investment income
- ------------------------------------------------------------------------
Institutional Shares (10,781,243) (9,255,446)
- ------------------------------------------------------------------------
Institutional Service Shares (115,401) (14,290)
- ------------------------------------------------------------------------
Distributions to shareholders from net realized gain on investment
transactions and future contracts
- ------------------------------------------------------------------------
Institutional Shares (11,507,864) (18,292,038)
- ------------------------------------------------------------------------
Institutional Service Shares (108,965) --
- ------------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from distributions to shareholders (22,513,473) (27,561,774)
- ------------------------------------------------------------------------ ------------- -------------
FUND SHARE (PRINCIPAL) TRANSACTIONS--
- ------------------------------------------------------------------------
Proceeds from sale of shares 215,864,930 290,371,076
- ------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
dividends declared 8,535,336 8,873,310
- ------------------------------------------------------------------------
Cost of shares redeemed (174,914,182) (218,388,643)
- ------------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from fund share transactions 49,486,084 80,855,743
- ------------------------------------------------------------------------ ------------- -------------
Change in net assets 42,693,612 100,125,020
- ------------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------------
Beginning of period 409,738,745 309,613,725
- ------------------------------------------------------------------------ ------------- -------------
End of period (including undistributed net investment income of $961,205
and $295,544, respectively) $ 452,432,357 $ 409,738,745
- ------------------------------------------------------------------------ ------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1994
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Index 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 Federated Max-Cap Fund (the
"Fund"). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held.
The Fund offers two classes of Shares, Institutional Shares and Institutional
Service Shares.
Effective December 5, 1994, the Board of Trustees ("Trustees") changed the name
of the Fund from Max-Cap Fund to Federated Max-Cap 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. These
policies are in conformity with generally accepted accounting principles.
<TABLE>
<S> <C>
A. INVESTMENT VALUATIONS--Listed equity securities are valued at the last sales price
reported on national securities exchanges. Unlisted securities and short-term
obligations (and private placement securities) are generally valued at the prices
provided by an independent pricing service. Short-term securities with remaining
maturities of sixty days or less may be stated at amortized cost, which approximates
value.
B. REPURCHASE AGREEMENTS--It is the policy of the Fund to require the custodian bank to
take possession, to have legally segregated in the Federal Reserve Book Entry System, or
to have segregated within the custodian bank's vault, all securities held as collateral
in support of repurchase agreement investments. Additionally, procedures have been
established by the Trust to monitor, on a daily basis, the market value of each
repurchase agreement's underlying collateral to ensure the value of collateral at least
equals the principal amount of the repurchase agreement, including accrued interest.
The Fund will only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the Fund's adviser
to be creditworthy pursuant to the guidelines established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less than the
repurchase price on the sale of collateral securities.
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and distributions to
shareholders are recorded on the ex-dividend date. 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").
D. 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.
E. 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.
F. 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 its
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.
G. FUTURES CONTRACTS--Upon entering into a financial futures contract with a broker, the
Fund is required to deposit in a segregated account an amount ("initial margin") of cash
or U.S. government securities equal to a percentage of the contract value. The Fund
agrees to receive from or pay the broker an amount of cash equal to a specific dollar
amount times the difference between the closing value and the price at which the
contract was made. On a daily basis, the value of the financial futures contract is
determined and any difference between such value and the original futures contract value
is reflected in the "daily variation margin" account. Daily variation margin
adjustments, arising from this "marking to market" process, are recorded by the Fund as
unrealized gains or losses.
The Fund may decide to close its position on a contract at any time prior to the
contract's expiration. When a contract is closed, the Fund recognizes a realized gain or
loss. Risks of entering into futures contracts include the possibility that a change in
the value of the contract may not correlate with changes in the value of the underlying
securities. For the fiscal year ended October 31, 1994, the Fund had a realized gain of
$129,511 on futures contracts.
At October 31, 1994, the fund had outstanding futures contracts as set out below:
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO APPRECIATION
EXPIRATION DATE DELIVER/RECEIVE POSITION (DEPRECIATION)
---------------- ------------------------- ---------------- ----------------
<S> <C> <C> <C>
December 1994 322 S&P 500 Index Futures Long $615,365
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
At October 31, 1994 the Fund has deposited in a segregated account, $4,500,000 of U.S.
Treasury Bills, to cover margin requirements on open futures contracts.
H. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1994 1993
---------------------------- ----------------------------
INSTITUTIONAL SHARES SHARES DOLLARS SHARES DOLLARS
- ----------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold 17,555,003 $ 207,304,786 24,571,558 $ 287,913,472
- -----------------------------------------
Shares issued to shareholders in payment
of dividends declared 718,661 8,439,495 764,603 8,868,865
- -----------------------------------------
Shares redeemed (14,617,884) (172,243,416) (18,666,049) (218,365,814)
- ----------------------------------------- ----------- ------------- ----------- -------------
Net change resulting from Institutional
Share transactions 3,655,780 $ 43,500,865 6,670,112 $ 78,416,523
- ----------------------------------------- ----------- ------------- ----------- -------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1994 1993**
---------------------------- ----------------------------
INSTITUTIONAL SERVICE SHARES SHARES DOLLARS SHARES DOLLARS
- ----------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold 734,647 $ 8,560,144 205,208 $ 2,457,604
- -----------------------------------------
Shares issued to shareholders in payment
of dividends declared 8,223 95,841 372 4,445
- -----------------------------------------
Shares redeemed (229,644) (2,670,766) (1,907) (22,829)
- ----------------------------------------- ----------- ------------- ----------- -------------
Net change resulting from Institutional
Service Share transactions 513,226 $ 5,985,219 203,673 $ 2,439,220
- ----------------------------------------- ----------- ------------- ----------- -------------
</TABLE>
** For period from August 30, 1993 (date of initial public investment) to
October 31, 1993.
(4) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEE--Federated Management, the Fund's investment Manager (the
"Manager"), receives for its services an annual investment advisory fee equal to
0.30 of 1% of the Fund's average daily net assets. Federated Management has
entered into a sub-management contract with ANB Investment Management and Trust
Company ("Sub-Manager"). The Manager shall pay the Sub-Manager an investment
advisory fee based on the average daily net assets of the Fund as follows: .05
of 1% on the
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
first $100 million, .02 of 1% on the next $100 million, and .01 of 1%
thereafter. The Manager may voluntarily choose to waive a portion of its fees.
The Manager can modify or terminate this voluntary waiver at any time at its
sole discretion.
DISTRIBUTION AND SHAREHOLDER SERVICES PLAN--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 .30 of 1% of the average
daily net assets of the Institutional Service Shares, annually, to compensate
FSC.
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services ("FSS"), the Fund will pay FSS up to .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--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 Trust are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
fiscal year ended October 31, 1994 were as follows:
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
PURCHASES-- $15,495,999
- ------------------------------------------------------------------------------- -----------
SALES-- $ 7,502,814
- ------------------------------------------------------------------------------- -----------
</TABLE>
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of
FEDERATED INDEX TRUST:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Federated Max-Cap Fund (a portfolio of
Federated Index Trust), as of October 31, 1994, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the financial highlights
(see pages 2 and 17 of this prospectus) for each of 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 audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1994, 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 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
Federated Max-Cap Fund of Federated Index Trust at October 31, 1994, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended and the financial highlights for
the periods presented, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
December 9, 1994
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Federated Max-Cap Fund Federated Investors Tower
Institutional Shares Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------
Manager
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------
Sub-Manager
ANB Investment Management One North LaSalle Street
and Trust Co. Chicago, Illinois 60690
- ------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8602
Trust Company Boston, Massachusetts 02266-8602
- ------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------
Legal Counsel
Dickstein, Shapiro & Morin, L.L.P. 2101 L Street, N.W.
Washington, D.C. 20037
- ------------------------------------------------------------------------------------------
Independent Auditors
Ernst & Young LLP One Oxford Centre
Pittsburgh, Pennsylvania 15219
- ------------------------------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
(A PORTFOLIO OF FEDERATED INDEX TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
An Open-End, Diversified
Management Investment Company
Prospectus dated December 31, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
31420E106
0032104A-ISS (12/94)
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
(A PORTFOLIO OF FEDERATED INDEX TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
The Institutional Service Shares of Federated Max-Cap Fund (the "Fund") offered
by this prospectus represent interests in the Fund, which is an investment
portfolio in Federated Index Trust (the "Trust"), an open-end, management
investment company (a mutual fund). The investment objective of the Fund is to
seek to provide investment results that correspond to the aggregate price and
dividend performance of publicly traded common stocks as represented by the
Standard & Poor's 500 Composite Stock Price Index (the "Index"). The Fund is
neither affiliated with nor sponsored by the Standard & Poor's Ratings Group.
THE INSTITUTIONAL SERVICE 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 BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Combined Statement of Additional Information for
Institutional Service Shares and Institutional Shares dated December 31, 1994,
with the Securities and Exchange Commission. The information contained in the
Combined Statement of Additional Information is incorporated by reference into
this prospectus. You may request a copy of the Combined Statement of Additional
Information free of charge by calling 1-800-235-4669. To obtain other
information or to make inquiries about the Fund, contact the Fund at the address
listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated December 31, 1994
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS--
INSTITUTIONAL SERVICE SHARES 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Limitations 7
FEDERATED INDEX TRUST INFORMATION 7
- ------------------------------------------------------
Management of the Trust 7
Distribution of Institutional Service Shares 9
Administration of the Fund 10
Brokerage Transactions 11
Expenses of the Fund and
Institutional Service Shares 11
NET ASSET VALUE 11
- ------------------------------------------------------
INVESTING IN INSTITUTIONAL SERVICE SHARES 12
- ------------------------------------------------------
Share Purchases 12
Minimum Investment Required 12
What Shares Cost 12
Subaccounting Services 12
Certificates and Confirmations 13
Dividends 13
Capital Gains 13
REDEEMING INSTITUTIONAL SERVICE SHARES 13
- ------------------------------------------------------
Telephone Redemption 13
Written Requests 14
Accounts with Low Balances 14
SHAREHOLDER INFORMATION 15
- ------------------------------------------------------
Voting Rights 15
Massachusetts Partnership Law 15
TAX INFORMATION 15
- ------------------------------------------------------
Federal Income Tax 15
PERFORMANCE INFORMATION 16
- ------------------------------------------------------
OTHER CLASSES OF SHARES 17
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS--
INSTITUTIONAL SHARES 18
- ------------------------------------------------------
FINANCIAL STATEMENTS 19
- ------------------------------------------------------
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS 47
- ------------------------------------------------------
ADDRESSES 48
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INSTITUTIONAL SERVICE SHARES
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)...................................................... None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)...................................................... None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable).................................... None
Redemption Fee (as a percentage of amount redeemed, if applicable)......................... None
Exchange Fee............................................................................... None
ANNUAL INSTITUTIONAL SERVICE SHARES OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)(1)........................................................... 0.23%
12b-1 Fee (after waiver)(2)................................................................ 0.05%
Total Other Expenses....................................................................... 0.34%
Shareholder Services Fee...................................................... 0.25%
Total Fund Operating Expenses(3).................................................. 0.62%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee. The adviser can terminate this voluntary waiver
at any time at its sole discretion. The maximum management fee is 0.30%.
(2) The maximum 12b-1 fee is 0.30%.
(3) The total Institutional Service Shares operating expenses in the table above
are based on expenses expected during the fiscal year ending October 31, 1995.
The total Institutional Service Shares operating expenses were 0.62% for the
fiscal year ended October 31, 1994 and would have been 0.88% absent the
voluntary waivers of a portion of the management fee and a portion of the 12b-1
fee.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of the Institutional Service
Shares of the Fund will bear, either directly or indirectly. For more complete
descriptions of the various costs and expenses, see "Federated Index Trust
Information" and "Investing in Institutional Service Shares." Wire-transferred
redemptions of less than $5,000 may be subject to additional fees.
Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted under the rules of the National
Association of Securities Dealers, Inc.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
- ------------------------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end
of each time period........................................ $6 $20 $35 $ 77
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The information set forth in the foregoing table and example relates only to
the Institutional Service Shares of the Fund. The Fund offers another class of
shares called Institutional Shares. Institutional Service Shares and
Institutional Shares are subject to a certain amount of the same expenses;
however Institutional Shares are not subject to a 12b-1 fee or a Shareholder
Services Fee. See "Other Classes of Shares."
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 47.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------
1994 1993*
------ ------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.24 $12.12
- --------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------
Net investment income 0.28(c) 0.07
- --------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and futures
contracts 0.11 0.12
- -------------------------------------------------------------------------- ------ -----
Total from investment operations 0.39 0.19
- --------------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.27) (0.07)
- --------------------------------------------------------------------------
Distributions to shareholders from net realized gain on investments and
futures contracts (0.34) --
- -------------------------------------------------------------------------- ------ -----
Total distributions (0.61) (0.07)
- -------------------------------------------------------------------------- ------ -----
NET ASSET VALUE, END OF PERIOD $12.02 $12.24
- -------------------------------------------------------------------------- ------ -----
TOTAL RETURN** 3.30% 1.70%
- --------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------------
Expenses 0.62% 0.61%(b)
- --------------------------------------------------------------------------
Net investment income 2.35% 1.52%(b)
- --------------------------------------------------------------------------
Expense waiver/reimbursement(a) 0.26% 0.09%(b)
- --------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------
Net assets, end of period (000 omitted) $8,617 $2,493
- --------------------------------------------------------------------------
Portfolio turnover rate 2% 13%
- --------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from August 30, 1993 (date of initial
public investment) to October 31, 1993.
** Based on net asset value, which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Computed on an annualized basis.
(c) Per share information presented is based upon the monthly average number of
shares outstanding due to large fluctuations in the number of shares
outstanding during the period.
Further information about the Fund's performance is contained in the Fund's
annual report for the fiscal year ended October 31, 1994, which can be obtained
free of charge.
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated January 30, 1990. The Declaration of Trust permits the Trust to
offer separate series of shares of beneficial interest representing interests in
separate portfolios of securities. The shares in any one portfolio may be
offered in separate classes. As of the date of this prospectus, the Board of
Trustees ("Trustees") has established two classes of shares of the Fund known as
Institutional Service Shares ("Shares") and Institutional Shares. On December 5,
1994, the Trustees changed the name of the Fund from the Max-Cap Fund to the
Federated Max-Cap Fund. This prospectus relates only to the Institutional
Service Shares of the Fund. Institutional Service Shares are designed primarily
for retail and private banking customers of financial institutions. A minimum
initial investment of $25,000 over a 90-day period is required.
Shares are currently sold and redeemed at net asset value without a sales charge
imposed by the Fund.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide investment results that
correspond to the aggregate price and dividend performance of publicly-traded
common stocks, by duplicating the composition of the Index. The investment
objective cannot be changed without approval of shareholders. The Fund's ability
to duplicate the Index will depend partly on the size and timing of cash flows
into and out of the Fund. The Fund's performance is expected to closely mirror
the performance of the Index. An investment in the Fund presents risks similar
to those of investing in a portfolio comprised of the securities of the
companies in the Index. While there is no assurance that the Fund will achieve
its investment objective, it endeavors to do so by following the investment
policies described in this prospectus.
INVESTMENT POLICIES
The investment policies described below may be changed by the Trustees without
shareholder approval. Shareholders will be notified before any material changes
in these policies become effective.
The Fund pursues its investment objective by attempting to duplicate the
investment results of the Index, while minimizing transaction costs and other
expenses. The Fund will attempt to achieve a correlation between the performance
of its portfolio and that of the Index of at least 0.95 of 1% or better; a
figure of 1.00 would represent perfect correlation. The Fund will normally be
invested in substantially all of the stocks that comprise the Index. Under
normal circumstances, at least 80% of the value of the Fund's total assets will
be invested in stocks represented in the Index. However, the Fund is not
required to sell securities if the 80% investment level changes due to increases
or decreases in the market value of portfolio securities.
The Index consists of 500 selected common stocks, most of which are listed on
the New York Stock Exchange. The Standard & Poor's Ratings Group ("S&P")
designates the stocks to be included in the Index on a statistical basis. A
particular stock's weighting in the Index is based on its relative total
market value; that is, its market price per share times the number of shares
outstanding. From time to time, S&P may add or delete stocks from the Index.
Inclusion of a particular stock in the Index in no way implies an opinion by S&P
as to its investment attractiveness, nor is S&P a sponsor or in any way
affiliated with the Fund. The Fund utilizes the Index as the standard
performance benchmark because it represents approximately 70% of the total
market value of all common stocks. In addition, it is familiar to investors, and
is recognized as a barometer of common stock investment returns.
The Fund will be managed passively, in that the traditional management functions
of economic, financial, and market analysis will not be undertaken. Furthermore,
a company's adverse financial circumstance will not trigger its elimination from
the Fund's portfolio, unless the company's stock is removed from the Index by
S&P. The Fund is managed by utilizing a computer program that identifies which
stocks should be purchased or sold in order to duplicate, as much as possible,
the composition of the Index. The Fund will include a stock in its investment
portfolio in the order of the stock's weighting in the Index, starting with the
heaviest-weighted stock. Thus, the proportion of Fund assets invested in such
stock is nearly identical to the percentage of the particular stock represented
in the Index. On occasion, so as to respond to changes in the Index's
composition, as well as corporate mergers, tender offers, and other
circumstances, adjustments will be made in the Fund's portfolio. However, it is
anticipated that these adjustments will occur infrequently, and the costs will
be minimized. As a result, portfolio turnover is expected to be well below that
encountered in other investment company portfolios. Therefore, the accompanying
costs, including accounting costs, brokerage fees, custodial expenses, and
transfer taxes, are expected to be relatively low. While the cash flows into and
out of the Fund will impact the Fund's portfolio turnover rate and the Fund's
ability to replicate the Index's performance, investment adjustments will be
made, as practicably as possible, to account for these circumstances.
The Fund believes that indexing, as described above, constitutes a reasonable
and effective method of replicating percentage changes in the Index. While the
Fund will not duplicate the Index's performance precisely, it is anticipated
that the Fund's performance will closely resemble the performance of the Index.
Factors such as the size of the Fund's portfolio, the size and timing of cash
flows into and out of the Fund, and changes in the securities markets and the
Index itself, will account for the difference.
In order to accommodate cash flows, the Fund may enter into stock index futures
contracts and options. The Fund may purchase futures contracts and options
solely to maintain adequate liquidity to meet its redemption demands. This will
allow the Fund to simultaneously maximize the level of the Fund assets which are
tracking the performance of the Index. The Fund can sell futures contracts and
options in order to close out a previously established position. The Fund will
not enter into any stock index futures contract for the purpose of speculation.
ACCEPTABLE INVESTMENTS. The Fund will invest primarily in common stocks
comprising the Index. In addition, the Fund may hold cash reserves which may be
invested in the following:
U.S. GOVERNMENT SECURITIES. The Fund is permitted to invest in U.S.
government securities which are either issued or guaranteed by the U.S.
government, its agencies or instrumentalities. These securities include,
but are not limited to:
- direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds; and
- notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as Federal Home Loan Banks, the Federal National
Mortgage Association, the Federal Home Loan Mortgage Corporation, the
Federal Farm Credit System, and the Student Loan Marketing Association.
REPURCHASE AGREEMENTS. The U.S. government securities and other securities
in which the Fund invests may be purchased pursuant to repurchase
agreements. Repurchase agreements are arrangements in which banks,
broker/dealers, and other recognized financial institutions sell U.S.
government securities or other securities to the Fund and agree at the time
of sale to repurchase them at a mutually agreed upon time and price. To the
extent that the original seller does not repurchase the securities from the
Fund, the Fund could receive less than the repurchase price on any sale of
such securities.
VARIABLE RATE U.S. GOVERNMENT SECURITIES. Some of the short-term U.S.
government securities the Fund may purchase carry variable interest rates.
These securities have a rate of interest subject to adjustment at least
annually. This adjusted interest rate is ordinarily tied to some objective
standard, such as a published interest rate or interest rate index.
CASH ITEMS. The Fund may also invest in cash items.
The Fund may also invest in commercial paper rated A-1 by S&P, Prime-1 by
Moody's Investors Service, Inc., or F-1 by Fitch Investors Service, Inc.
STOCK INDEX FUTURES AND OPTIONS. The Fund may utilize stock index futures
contracts, options, and options on futures contracts, subject to the
limitation that the value of these futures contracts and options will not
exceed 20% of the Fund's total assets. Also, the Fund will not purchase
options to the extent that more than 5% of the value of the Fund's total
assets would be invested in premiums on open put option positions. These
futures contracts and options will be used to handle cash flows into and
out of the Fund and to potentially reduce transactional costs, since
transactional costs associated with futures and options contracts can be
lower than costs stemming from direct investments in stocks.
There are several risks accompanying the utilization of futures contracts to
effectively anticipate market transactions. First, positions in futures
contracts may be closed only on an exchange or board of trade that furnishes a
secondary market for such contracts. While the Fund plans to utilize futures
contracts only if there exists an active market for such contracts, there is no
guarantee that a liquid market will exist for the contracts at a specified time.
Furthermore, because, by definition, futures contracts look to projected price
levels in the future and not to current levels of valuation, market
circumstances may result in there being a discrepancy between the price of the
stock index future and the movement in the
stock index. The absence of a perfect price correlation between the futures
contract and its underlying stock index could stem from investors choosing to
close futures contracts by offsetting transactions, rather than satisfying
additional margin requirements. This could result in a distortion of the
relationship between the index and futures market. In addition, because the
futures market imposes less burdensome margin requirements than the securities
market, an increased amount of participation by speculators in the futures
market could result in price fluctuations.
In view of these considerations, the Fund will comply with the following
restrictions when purchasing and selling futures contracts. First, the Fund will
not participate in futures transactions if the sum of its initial margin
deposits on open contracts will exceed 5% of the market value of the Fund's
total assets, after taking into account the unrealized profits and losses on
those contracts it has entered into. Second, the Fund will not enter into these
contracts for speculative purposes. Third, since the Fund does not constitute a
commodity pool, it will not market itself as such, nor serve as a vehicle for
trading in the commodities futures or commodity options markets. In this regard,
the Fund will disclose to all prospective investors the limitations on its
futures and options transactions, and will make clear that these transactions
are entered into only for bona fide hedging purposes or other permissible
purposes pursuant to regulations promulgated by the Commodity Futures Trading
Commission ("CFTC"). Also, the Fund intends to claim an exclusion from
registration as a commodity pool operator under the regulations promulgated by
the CFTC.
INDEX PARTICIPATION CONTRACTS. In addition to investing in stock index
futures contracts, options and options on futures contracts, the Fund may
also participate in the purchasing and selling of index participation
contracts based on the Index. The Fund will utilize index participation
contracts to aid in the management of cash flows into and out of the Fund
and not for speculative purposes. These contracts provide the equivalent of
a position in the stocks of the Index, where each stock is represented in
the same proportion as it is represented in the Index. Unlike futures
contracts, positions in these instruments may last indefinitely, with no
expiration date and will pay dividends implied by the underlying stocks in
the Index. Generally, the value of an index participation contract will
rise and fall as the value of the Index rises and falls. Index
participation contracts have lower transaction costs than those associated
with the purchase and sale of individual stocks. The Fund will invest in
index participation contracts only if there exists an active market for
such contracts.
The value of these contracts, together with the value of the Fund's
investment in stock index futures contracts, options and options on futures
contracts will not exceed 20% of the Fund's total assets. The Fund's use of
these investments will be to maintain adequate liquidity to meet redemption
requests, while simultaneously maximizing the level of Fund assets which
are tracking the performance of the Index.
LENDING OF PORTFOLIO SECURITIES. The Fund may lend its portfolio securities on
a short-term basis or long-term basis up to one-third of the value of its total
assets to broker/dealers, banks, or other institutional borrowers of securities.
The Fund will only enter into loan arrangements with broker/ dealers, banks or
other institutions which the managers have determined are creditworthy under
guidelines established by the Trustees. The Fund will receive collateral in the
form of cash or U.S. government securities equal to at least 100% of the value
of the securities loaned.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase short-term
U.S. government securities on a when-issued or delayed delivery basis. These
transactions are arrangements in which the Fund purchases securities with
payment and delivery scheduled for a future time. The seller's failure to
complete these transactions may cause the Fund to miss a price or yield
considered to be advantageous. Settlement dates may be a month or more after
entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices. Accordingly, the Fund may pay
more/less than the market value of the securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the managers deem it
appropriate to do so. In addition, the Fund may enter in transactions to sell
its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Fund may realize short-term profits or losses upon the sale of such
commitments.
INVESTMENT LIMITATIONS
The Fund will not:
- borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a money market instrument for at
least a percentage of its cash value with an agreement to buy it back on
a set date) except, under certain circumstances, the Fund may borrow up
to one-third of the value of its total assets and pledge up to 10% of the
value of those assets to secure such borrowings.
The above investment limitation cannot be changed without shareholder approval.
The following investment limitations, however, may be changed by the Trustees
without shareholder approval. Shareholders will be notified before any material
change in these policies becomes effective.
The Fund will not:
- invest more than 5% of its total assets in securities of issuers that
have records of less than three years of continuous operations; or
- invest more than 15% of its net assets in securities that are illiquid.
FEDERATED INDEX TRUST INFORMATION
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the business affairs of the Trust and for
exercising all of the powers of the Trust except those reserved for the
shareholders. The Executive Committee of the Board of Trustees handles the
Trustees' responsibilities between meetings of the Trustees.
FUND'S MANAGER. Federated Management serves as the Fund's manager (the
"Manager"). The Trust has entered into a management contract (the "Management
Contract") with the Manager, which, in turn, has entered into a sub-management
contract (the "Sub-Management Contract") with ANB Investment Management and
Trust Company ("ANB" or the "Sub-Manager") (ANB and the Manager are collectively
referred to as "Managers"). It is the Manager's responsibility to select the
Sub-Manager,
subject to the review and approval of the Trustees and to review and evaluate
the Sub-Manager's continued performance. The Manager is also responsible for
providing administrative services to the Fund.
Subject to the supervision and direction of the Trustees, the Manager provides
to the Fund investment management evaluation services principally by performing
initial due diligence on the Sub-Manager for the Fund and thereafter monitoring
and evaluating the performance of the Fund's Sub-Manager through quantitative
and qualitative analyses. In addition, the Manager conducts periodic in-person,
telephonic and written consultations with the Sub-Manager. In initially
evaluating the Sub-Manager, the Manager considered, among other factors, the
Sub-Manager's level of expertise; relative performance over a minimum period of
five years; level of efficiency; level of adherence to investment discipline or
philosophy; personnel, facilities and financial strength; and quality of service
and client communications. On an ongoing basis, the Manager is responsible for
communicating performance expectations and evaluations to the Sub-Manager;
monitoring tracking error; monitoring and analyzing the appropriate futures
contracts to purchase and the futures holdings of the Fund as a percentage of
Fund assets; monitoring market timing in the Fund; discussing with the
Sub-Manager which method of indexing to use; and ultimately recommending to the
Trustees whether the Sub-Management Contract should be renewed, modified or
terminated. The Manager provides written reports to the Trustees regarding the
results of its evaluation and monitoring functions. In addition, the Manager is
responsible for providing the Fund with administrative services, including, but
not limited to, shareholder servicing and certain legal and accounting services.
The Manager is also responsible for conducting all operations of the Fund,
except those operations contracted to the Sub-Manager, custodian, transfer agent
and dividend disbursing agent. As described below, the Manager receives an
annual fee from the Fund for performing its responsibilities under the
Management Contract.
MANAGEMENT FEES. The Fund's Manager receives an annual management fee
equal to .30 of 1% of the Fund's average daily net assets. Under the
Management Contract, which provides for the voluntary waiver of the
management fee by the Manager, the Manager will voluntarily waive some or
all of the management fee. The Manager can terminate this voluntary waiver
of some or all of its management fee at any time in its sole discretion.
The Manager has also undertaken to reimburse the Fund for operating
expenses in excess of limitations established by certain states.
MANAGER'S BACKGROUND. Federated Management, a Delaware business trust
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated Investors.
All of the Class A (voting) shares of Federated Investors are owned by a
trust, the trustees of which are John F. Donahue, Chairman and Trustee of
Federated Investors, Mr. Donahue's wife, and Mr. Donahue's son, J.
Christopher Donahue, who is President and Trustee of Federated Investors.
Federated Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through
these same client institutions, individual shareholders also have access to
this same level of investment expertise.
SUB-MANAGER. Under the terms of the Sub-Management Contract between the Manager
and ANB, ANB serves as the Fund's Sub-Manager. The Sub-Manager will develop,
maintain and run the computer program designed to determine which securities
will be purchased and sold so as to replicate the composition of the Index to
the extent feasible, and, subject to the Manager's oversight, has complete
discretion to purchase and sell portfolio securities for the Fund within the
Fund's investment objective, restrictions and policies.
SUB MANAGEMENT FEES. For its services under the Sub-Management Contract,
ANB receives an annual fee from the Manager equal to .05 of 1% of the first
$100 million of net assets under management, .02 of 1% over $100 million
but less than $200 million, and .01 of 1% of net assets over and above $200
million, on an annualized basis. This fee is paid by the Manager out of its
resources and is not an incremental Fund expense. No performance or
incentive fees are paid to the Sub-Manager.
SUB-MANAGER'S BACKGROUND. ANB, incorporated in the State of Illinois on
July 1, 1988 is a registered investment adviser under the Investment
Advisers Act of 1940. ANB is a wholly-owned subsidiary of American National
Bank and Trust Company of Chicago, which, in turn, is an indirect
wholly-owned subsidiary of First Chicago Corporation. It serves as
investment adviser principally to corporate defined benefit and defined
contribution plans which have, as of September 30, 1994, placed
approximately $15.3 billion in assets with ANB. Since 1973, when American
National Bank and Trust Company of Chicago introduced its first commingled
equity index fund, ANB has developed and managed a family of equity and
bond index funds in which some 350 nationwide non-financial institution
clients invest. In total, ANB manages 50 commingled/common trust funds.
Also, since 1990, ANB has served as Sub-Manager for the Federated Mini-Cap
Fund and the Federated Mid-Cap Fund which are also portfolios of the Trust.
OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. In addition to periodic payments to
financial institutions under the Distribution and Shareholder Services Plans,
certain financial institutions may be compensated by the Manager or its
affiliates for the continued investment of customers' assets in certain funds,
including the Fund, advised by those entities. These payments will be made
directly by the distributor or Manager from their assets, and will not be made
from the assets of the Fund or by the assessment of a sales charge on Shares.
DISTRIBUTION OF INSTITUTIONAL SERVICE SHARES
Federated Securities Corp. is the principal distributor for the Fund. It is a
Pennsylvania corporation organized on November 14, 1969, and is the principal
distributor for a number of investment companies. Federated Securities Corp. is
a subsidiary of Federated Investors. Federated Securities Corp. pays a licensing
fee to S&P for the right to use the Index in connection with the management
activities for the Fund. Federated Securities Corp. is not affiliated with S&P.
DISTRIBUTION AND SHAREHOLDER SERVICES PLANS. Under a distribution plan adopted
in accordance with Investment Company Act Rule 12b-1 (the "Distribution Plan"),
the Fund will pay to the distributor an amount, computed at an annual rate of
0.30 of 1% of the average daily net asset value of
Shares to finance any activity which is principally intended to result in the
sale of Shares subject to the Distribution Plan. The distributor may select
financial institutions such as banks, fiduciaries, custodians for public funds,
investment advisers and broker/dealers to provide sales support services as
agents for their clients or customers.
The Distribution Plan is a compensation-type plan. As such, the Fund makes no
payments to the distributor except as described above. Therefore, the Fund does
not pay for unreimbursed expenses of the distributor, including amounts expended
by the distributor in excess of amounts received by it from the Fund, interest,
carrying or other financing charges in connection with excess amounts expended,
or the distributor's overhead expenses. However, the distributor may be able to
recover such amount or may earn a profit from future payments made by the Fund
under the Distribution Plan.
In addition, the Fund has adopted a Shareholder Services Plan (the "Services
Plan") under which it may make payments up to 0.25 of 1% of the average daily
net asset value of Shares to obtain certain personal services for shareholders
and the maintenance of shareholder accounts ("shareholder services"). The Fund
has entered into a Shareholder Services Agreement with Federated Shareholder
Services, a subsidiary of Federated Investors, under which Federated Shareholder
Services will either perform Shareholder Services directly or will select
financial institutions to perform shareholder services. Financial institutions
will receive fees based upon shares owned by their clients or customers. The
schedules of such fees and the basis upon which such fees will be paid will be
determined from time to time by the Fund and Federated Shareholder Services.
The Glass-Steagall Act prohibits a depository institution (such as a commercial
bank or a savings and loan association) from being an underwriter or distributor
of most securities. In the event the Glass-Steagall Act is deemed to prohibit
depository institutions from acting in the administrative capacities described
above or should Congress relax current restrictions on depository institutions,
the Board of Trustees will consider appropriate changes in the services.
State securities laws governing the ability of depository institutions to act as
underwriters or distributors of securities may differ from interpretations given
to the Glass-Steagall Act and, therefore, banks and financial institutions may
be required to register as dealers pursuant to state law.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, Inc., a subsidiary
of Federated Investors, provides the Manager with the administrative personnel
and services necessary to provide shareholder servicing and certain legal and
accounting services.
CUSTODIAN. State Street Bank and Trust Company ("State Street Bank"), Boston,
Massachusetts, is custodian for the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Pittsburgh, Pennsylvania, is transfer agent for the shares of the Fund, and
dividend disbursing agent for the Fund.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, Pennsylvania, and Dickstein, Shapiro & Morin, L.L.P., Washington,
D.C.
INDEPENDENT AUDITORS. The independent auditors for the Fund are Ernst & Young
LLP, Pittsburgh, Pennsylvania.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the managers look for prompt execution of the order at a favorable
price. In working with dealers, the managers will generally utilize those who
are recognized dealers in specific portfolio instruments, except when a better
price and execution of the order can be obtained elsewhere. In selecting among
firms believed to meet these criteria, the managers may give consideration to
those firms which have sold or are selling Shares of the Fund and other funds
distributed by Federated Securities Corp. The managers make decisions on
portfolio transactions and select brokers and dealers subject to review by the
Trustees.
EXPENSES OF THE FUND AND INSTITUTIONAL SERVICE SHARES
Holders of Shares pay their allocable portion of Fund and Trust expenses.
The Trust expenses for which holders of Shares pay their allocable portion
include, but are not limited to: the cost of organizing the Trust and continuing
its existence; registering the Trust with federal and state securities
authorities; Trustees' fees; auditors' fees; the cost of meetings of Trustees;
legal fees of the Trust; association membership dues; and such non-recurring and
extraordinary items as may arise.
The Fund expenses for which holders of Shares pay their allocable portion
include, but are not limited to: registering the Fund and Shares of the Fund;
investment advisory services; taxes and commissions; custodian fees; insurance
premiums; auditors' fees; and such non-recurring and extraordinary items as may
arise.
At present, the only expenses allocated to the Shares as a class are expenses
under the Fund's 12b-1 Plan which relate to the Shares. However, the Trustees
reserve the right to allocate certain other expenses to holders of Shares as
they deem appropriate ("Class Expenses"). In any case, Class Expenses would be
limited to: transfer agent fees as identified by the transfer agent as
attributable to holders of Shares; printing and postage expenses related to
preparing and distributing materials such as shareholder reports, prospectuses
and proxies to current shareholders; registration fees paid to the Securities
and Exchange Commission and registration fees paid to state securities
commissions; expenses related to administrative personnel and services as
required to support holders of Shares; legal fees relating solely to Shares; and
Trustees' fees incurred as a result of issues relating solely to Shares.
NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund's net asset value per Share fluctuates. The net asset value for Shares
is determined by adding the interest of the Shares in the market value of all
securities and other assets of the Fund, subtracting the interest of the Shares
in the liabilities of the Fund and those attributable to Shares, and dividing
the remainder by the total number of Shares outstanding. The net asset value for
Institutional Shares may exceed that of Shares due to the variance in daily net
income realized by each class. Such variance will reflect only accrued net
income to which the shareholders of a particular class are entitled.
INVESTING IN INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange is open. Share of
the Fund may be purchased either by wire or mail. To purchase Shares of the
Fund, open an account by calling Federated Securities Corp. Information needed
to establish the account will be taken over the telephone. The Fund reserves the
right to reject any purchase request.
BY WIRE. To purchase Shares of the Fund by Federal Reserve wire, call the Fund
to place an order. Shareholders have until 4:00 p.m. (Eastern time) to call the
Fund for settlement on the next business day. However, in order to maximize the
Fund's ability to track the Index, shareholders are urged to transmit purchase
requests prior to 2:00 p.m. (Eastern time). The order is considered received
immediately. Payment by federal funds must be received before 4:00 p.m. (Eastern
time) on the next business day following the order. Federal funds should be
wired as follows: State Street Bank and Trust Company, Boston, Massachusetts;
Attention: EDGEWIRE; For Credit to: Federated Index Trust, Federated Max-Cap
Fund--Institutional Service Shares; Fund Number (this number can be found on the
account statement or by contacting the Fund); Group Number or Order Number;
Nominee or Institution Name; ABA Number 011000028.
BY MAIL. To purchase Shares of the Fund by mail, send a check made payable to
Federated Index Trust, Federated Max-Cap Fund-- Institutional Service Shares to
the Fund's transfer agent, Federated Services Company, c/o State Street Bank and
Trust Company, P.O. Box 8602, Boston, Massachusetts 02266-8602. Orders by mail
are considered received after payment by check is converted by State Street Bank
into federal funds. This is normally the next business day after State Street
Bank receives the check.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in Shares is $25,000. However, 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 will be calculated by
combining all accounts that it maintains with the Fund.
WHAT SHARES COST
Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Fund. The net asset value is
determined at 4:00 p.m. (Eastern time), Monday through Friday, except on: (i)
days on which there are not sufficient changes in the value of the Fund's
portfolio securities that its net asset value might be materially affected; (ii)
days during which no shares are tendered for redemption and no orders to
purchase shares are received; and (iii) the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.
SUBACCOUNTING SERVICES
Institutions are encouraged to open single master accounts. However, certain
institutions may wish to use the transfer agent's subaccounting system to
minimize their internal recordkeeping requirements. The transfer agent charges a
fee based on the level of subaccounting services rendered. Institutions
holding Shares in a fiduciary, agency, custodial, or similar capacity may charge
or pass through subaccounting fees as part of or in addition to normal trust or
agency account fees. They may also charge fees for other services provided which
may be related to the ownership of Shares. This prospectus should, therefore, be
read together with any agreement between the customer and the institution with
regard to the services provided, the fees charged for those services, and any
restrictions and limitations imposed.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund.
Detailed confirmations of each purchase or redemption are sent to each
shareholder. Quarterly confirmations are sent to report dividends paid during
the quarter.
DIVIDENDS
Dividends are declared and paid quarterly to all shareholders invested in the
Fund on the record date. Unless shareholders request cash payments by writing to
the Fund, dividends are automatically reinvested in additional Shares on payment
dates at the ex-dividend date net asset value without a sales charge.
CAPITAL GAINS
Capital gains realized by the Fund, if any, will be distributed at least once
every 12 months.
REDEEMING INSTITUTIONAL SERVICE SHARES
- --------------------------------------------------------------------------------
The Fund redeems Shares at their net asset value next determined after the Fund
receives the redemption request. Redemptions will be made on days on which the
Fund computes its net asset value. Redemption requests must be received in
proper form and can be made by telephone request or written request.
TELEPHONE REDEMPTION
Shareholders may redeem their Shares by telephoning the Fund before 4:00 p.m.
(Eastern time). However, in order to maximize the Fund's ability to track the
Index, shareholders are urged to telephone the Fund prior to 2:00 p.m. (Eastern
time). The proceeds will normally be wired the following business day, but in no
event more than seven days, to the shareholder's account at a domestic
commercial bank that is a member of the Federal Reserve System. If at any time
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders would be promptly notified. An authorization form
permitting State Street Bank or the Fund to accept telephone requests must first
be completed. Authorization forms and information on this service are available
from Federated Securities Corp. Telephone redemption instructions may be
recorded.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "Written Requests," should be considered.
If reasonable procedures are not followed by the Fund, it may be liable for
losses due to unauthorized or fraudulent telephone instructions.
WRITTEN REQUESTS
Shares may also be redeemed by sending a written request to the Fund. Call the
Fund for specific instructions before redeeming by letter. The shareholder will
be asked to provide in the request his name, the Fund name, his account number,
and the share or dollar amount requested. If share certificates have been
issued, they must be properly endorsed and should be sent by registered or
certified mail with the written request.
SIGNATURES. Shareholders requesting a redemption of $50,000 or more, a
redemption of any amount to be sent to an address other than that on record with
the Fund, or a redemption payable other than to the shareholder of record must
have signatures on written redemption requests guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund ("BIF"), which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
- a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund ("SAIF"), which is administered
by the FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
RECEIVING PAYMENT. Normally, a check for the proceeds is mailed within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000. This
requirement does not apply, however, if the balance falls below $25,000 because
of changes in the Fund's net asset value.
Before Shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each Share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights except that, in matters
affecting only a particular fund or class, only shares of that fund or class are
entitled to vote. As a Massachusetts business trust, the Trust is not required
to hold annual shareholder meetings. Shareholder approval will be sought only
for certain changes in the Trust's or the Fund's operation and for the election
of Trustees under certain circumstances. As of December 12, 1994, Santa Barbara
Bank & Trust of Santa Barbara, California owned approximately 262,940.64 shares
(36%) of the Fund, and therefore, may, for certain purposes, be deemed to
control the Fund and be able to affect the outcome of certain matters presented
for a vote of shareholders.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders shall be called by the Trustees upon the
written request of shareholders owning at least 10% of the outstanding shares of
all series of the Trust.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for acts or obligations of the Trust on behalf
of the Fund. To protect shareholders of the Fund, the Trust has filed legal
documents with Massachusetts that expressly disclaim the liability of
shareholders of the Fund for such acts or obligations of the Trust. These
documents require notice of this disclaimer to be given in each agreement,
obligation, or instrument that the Trust enters into on behalf of the Fund.
In the unlikely event a shareholder of the Fund is held personally liable for
the Trust's obligations on behalf of the Fund, the Trust is required to use the
property of the Fund to protect or compensate the shareholder. On request, the
Trust will defend any claim made and pay any judgment against a shareholder for
any act or obligation of the Trust on behalf of the Fund. Therefore, financial
loss resulting from liability as a shareholder of the Fund will occur only if
the Trust cannot meet its obligations to indemnify shareholders and pay
judgments against them from the assets of the Fund.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code applicable to regulated investment companies and to
receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios, if any, will not be combined for tax purposes with
those realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions, including capital gains distributions,
received. This applies whether dividends and distributions are received in cash
or as additional shares. Distributions representing long-term capital gains, if
any, will be taxable to shareholders as long-term capital gains no matter how
long the shareholders have held their shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES. In the opinion of Houston,
Houston & Donnelly, counsel to the Trust:
- neither the Trust nor the Fund is subject to Pennsylvania corporate or
personal property taxes; and
- Fund shares may be subject to personal property taxes imposed by
counties, municipalities, and school districts in Pennsylvania to the
extent that the portfolio securities in the Fund would be subject to such
taxes if owned directly by residents of those jurisdictions.
Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund advertises its total return and yield for Shares.
Total return represents the change, over a specified period of time, in the
value of an investment in the Shares of the Fund after reinvesting all income
and capital gain distributions. It is calculated by dividing that change by the
initial investment and is expressed as a percentage.
The yield of Shares of the Fund is calculated by dividing the net investment
income per share (as defined by the Securities and Exchange Commission) earned
by Shares over a thirty-day period by the offering price per share of the Shares
on the last day of the period. This number is then annualized using semi-annual
compounding. The yield does not necessarily reflect income actually earned by
the Institutional Service Shares and, therefore, may not correlate to the
dividends or other distributions paid to shareholders.
Shares are sold without any sales load or other similar non-recurring charges.
Total return and yield will be calculated separately for Institutional Service
Shares and Institutional Shares. Because Institutional Service Shares are
subject to a 12b-1 fee, the total return and yield for Institutional Shares for
the same period will exceed that of Institutional Service Shares.
From time to time, the Fund may advertise its performance using certain
reporting services and/or compare its performance to certain indices.
OTHER CLASSES OF SHARES
- --------------------------------------------------------------------------------
Institutional Shares of the Fund are sold to accounts for which financial
institutions act in a fiduciary or agency capacity. Institutional Shares are
sold at net asset value and investments in Institutional Shares are subject to a
minimum initial investment of $25,000.
Institutional Shares of the Fund are distributed without a 12b-1 Plan. Financial
institutions and brokers providing sales and administrative services may receive
different compensation depending upon which class of shares of the Fund is sold.
The amount of dividends payable to Institutional Shares will exceed that of
Institutional Service Shares by the difference between Class Expenses and
distribution expenses borne by shares of each respective class.
The stated advisory fee is the same for both classes of shares.
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 47.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------------------------
1994 1993 1992 1991 1990*
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.24 $11.64 $11.07 $ 8.60 $10.00
- -------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------
Net investment income 0.32 0.30 0.32 0.37 0.12
- -------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
futures contracts 0.10 1.29 0.71 2.46 (1.43)
- ------------------------------------------------------------- ----- ----- ----- ----- -----
Total from investment operations 0.42 1.59 1.03 2.83 (1.31)
- -------------------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------------------
Dividends to shareholders from net investment income (0.30) (0.30) (0.34) (0.36) (0.09)
- -------------------------------------------------------------
Distributions to shareholders from net realized gain on
investment and futures contracts (0.34) (0.69) (0.12) -- --
- ------------------------------------------------------------- ----- ----- ----- ----- -----
Total distributions (0.64) (0.99) (0.46) (0.36) (0.09)
- ------------------------------------------------------------- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $12.02 $12.24 $11.64 $11.07 $8.60
- ------------------------------------------------------------- ----- ----- ----- ----- -----
TOTAL RETURN** 3.59% 14.35% 9.51% 33.31% (14.46)%
- -------------------------------------------------------------
RATIO TO AVERAGE NET ASSETS
- -------------------------------------------------------------
Expenses 0.32% 0.31% 0.30% 0.24% 0.00%(b)
- -------------------------------------------------------------
Net investment income 2.70% 2.60% 2.92% 3.74% 5.19%(b)
- -------------------------------------------------------------
Expense waiver/reimbursement(a) 0.07% 0.09% 0.18% 0.45% 0.94%(b)
- -------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------
Net assets, end of period (000 omitted) $443,815 $407,246 $309,614 $144,528 $25,129
- -------------------------------------------------------------
Portfolio turnover rate 2% 13% 46% 6% 0%
- -------------------------------------------------------------
</TABLE>
* Reflects operations for the period from July 5, 1990 (date of initial public
offering) to October 31, 1990. For the period from the start of business June
26, 1990 to July 4, 1990, net investment income per share aggregating $0.02
per share ($155) was distributed to the Fund's manager. Such distribution
represented the net income of the Fund prior to the initial public offering
of Fund shares which commenced on July 5, 1990.
** Based on net asset value, which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(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)
Further information about the Funds performance is contained in the Funds annual
report for the fiscal year ended October 31, 1994 which can be obtained free of
charge.
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--81.1%
- ----------------------------------------------------------------------------------
COMMERCIAL SERVICES--1.4%
------------------------------------------------------------------
5,600 Alco Standard Corp. $ 319,200
------------------------------------------------------------------
52,300 American Express Co. 1,608,225
------------------------------------------------------------------
8,900 Deluxe Corp. 251,425
------------------------------------------------------------------
16,700 Donnelley (R.R.) & Sons Co. 523,963
------------------------------------------------------------------
10,700 Dow Jones & Co. 319,662
------------------------------------------------------------------
19,200 Dun & Bradstreet Corp. 1,125,600
------------------------------------------------------------------
4,000 Fleming Cos., Inc. 96,000
------------------------------------------------------------------
5,600 Grainger, W.W., Inc. 308,000
------------------------------------------------------------------
3,600 Handleman Co. 40,500
------------------------------------------------------------------
3,500 Harland, John H. Co. 74,812
------------------------------------------------------------------
8,100 Interpublic Group Cos., Inc. 267,300
------------------------------------------------------------------
5,300 McGraw-Hill, Inc. 396,175
------------------------------------------------------------------
10,700 Moore Corp. Ltd. 193,938
------------------------------------------------------------------
4,700 Ogden Corp. 101,050
------------------------------------------------------------------
6,250 Safety-Kleen Corp. 86,719
------------------------------------------------------------------
7,700 Super Valu Stores, Inc. 186,725
------------------------------------------------------------------
20,000 Sysco Corp. 497,500
------------------------------------------------------------------ ------------
Total 6,396,794
------------------------------------------------------------------ ------------
CONSUMER DURABLES--2.7%
------------------------------------------------------------------
7,900 American Greetings Corp., Class A 216,262
------------------------------------------------------------------
1,537 Bassett Furniture Industries, Inc. 41,883
------------------------------------------------------------------
6,400 Bausch & Lomb, Inc. 208,000
------------------------------------------------------------------
9,000 Black & Decker Corp. 226,125
------------------------------------------------------------------
1,600 Briggs & Stratton Corp. 111,200
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
CONSUMER DURABLES--CONTINUED
------------------------------------------------------------------
10,300 Brunswick Corp. $ 211,150
------------------------------------------------------------------
3,400 Centex Corp. 75,650
------------------------------------------------------------------
37,800 Chrysler Corp. 1,842,750
------------------------------------------------------------------
9,000 Cooper Tire & Rubber Co. 221,625
------------------------------------------------------------------
35,300 Eastman Kodak Co. 1,698,812
------------------------------------------------------------------
6,300 Echlin, Inc. 193,725
------------------------------------------------------------------
4,900 Fleetwood Enterprises, Inc. 112,700
------------------------------------------------------------------
106,000 Ford Motor Co. 3,127,000
------------------------------------------------------------------
13,400 Genuine Parts Co. 484,075
------------------------------------------------------------------
16,100 Goodyear Tire & Rubber Co. 563,500
------------------------------------------------------------------
9,400 Hasbro, Inc. 310,200
------------------------------------------------------------------
4,900 Jostens, Inc. 84,525
------------------------------------------------------------------
3,700 Kaufman and Broad Homes, Inc. 48,100
------------------------------------------------------------------
17,952 Mattel, Inc. 525,096
------------------------------------------------------------------
11,500 Maytag Corp. 182,563
------------------------------------------------------------------
17,000 Newell Co. 357,000
------------------------------------------------------------------
2,100 Outboard Marine Corp. 43,312
------------------------------------------------------------------
5,000 Polaroid Corp. 168,125
------------------------------------------------------------------
3,000 Pulte Corp. 61,875
------------------------------------------------------------------
17,300 Rubbermaid, Inc. 475,750
------------------------------------------------------------------
1,200 Skyline Corp. 23,700
------------------------------------------------------------------
4,600 Snap-On Tools Corp. 146,050
------------------------------------------------------------------
1,500 SPX Corp. 26,063
------------------------------------------------------------------
4,800 Stanley Works 190,800
------------------------------------------------------------------
7,600 Whirlpool Corp. 395,200
------------------------------------------------------------------
3,300 * Zenith Electronics Corp. 46,200
------------------------------------------------------------------ ------------
Total 12,419,016
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
CONSUMER NON-DURABLES--9.5%
------------------------------------------------------------------
3,100 Alberto-Culver Co., Class B $ 78,662
------------------------------------------------------------------
21,700 American Brands Inc. 754,075
------------------------------------------------------------------
29,100 Anheuser-Busch Companies, Inc. 1,476,825
------------------------------------------------------------------
7,800 Avon Products, Inc. 493,350
------------------------------------------------------------------
15,200 Borden, Inc. 205,200
------------------------------------------------------------------
1,900 Brown Group, Inc. 64,362
------------------------------------------------------------------
6,900 Brown-Forman Corp., Class B 212,175
------------------------------------------------------------------
27,100 Campbell Soup Co. 1,117,875
------------------------------------------------------------------
5,900 Clorox Co. 318,600
------------------------------------------------------------------
140,000 Coca-Cola Co. 7,035,000
------------------------------------------------------------------
16,700 Colgate-Palmolive Co. 1,018,700
------------------------------------------------------------------
27,100 ConAgra, Inc. 843,488
------------------------------------------------------------------
4,100 Coors (Adolph) Col., Class B 70,725
------------------------------------------------------------------
16,500 CPC International, Inc. 882,750
------------------------------------------------------------------
17,300 General Mills, Inc. 968,800
------------------------------------------------------------------
23,700 Gillette Co. 1,762,688
------------------------------------------------------------------
3,400 * Hartmarx Corp. 19,550
------------------------------------------------------------------
27,400 Heinz, H.J. Co. 1,017,225
------------------------------------------------------------------
9,700 Hershey Foods Corp. 458,325
------------------------------------------------------------------
12,300 International Flavors & Fragrances, Inc. 539,662
------------------------------------------------------------------
24,800 Kellogg Co. 1,457,000
------------------------------------------------------------------
8,800 Liz Claiborne, Inc. 203,500
------------------------------------------------------------------
8,200 Nike, Inc., Class B 499,175
------------------------------------------------------------------
1,600 Oshkosh B'Gosh, Inc., Class A 24,000
------------------------------------------------------------------
85,400 PepsiCo, Inc. 2,989,000
------------------------------------------------------------------
11,500 Pet, Inc. 198,375
------------------------------------------------------------------
94,300 Philip Morris 5,775,875
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
CONSUMER NON-DURABLES--CONTINUED
------------------------------------------------------------------
73,400 Procter & Gamble Co. $ 4,587,500
------------------------------------------------------------------
7,800 Quaker Oats Co. 584,025
------------------------------------------------------------------
11,200 Ralston Purina Co. 476,000
------------------------------------------------------------------
9,300 Reebok International Ltd. 370,837
------------------------------------------------------------------
4,400 Russell Corp. 132,000
------------------------------------------------------------------
52,300 Sara Lee Corp. 1,287,887
------------------------------------------------------------------
40,300 Seagram Co., Ltd. 1,244,263
------------------------------------------------------------------
5,500 Stride Rite Corp. 76,312
------------------------------------------------------------------
17,200 Unilever N.V. 2,042,500
------------------------------------------------------------------
22,500 UST, Inc. 596,250
------------------------------------------------------------------
6,900 V.F. Corp. 349,313
------------------------------------------------------------------
12,500 Wrigley (Wm.), Jr. Co. 564,063
------------------------------------------------------------------ ------------
Total 42,795,912
------------------------------------------------------------------ ------------
CONSUMER SERVICES--3.4%
------------------------------------------------------------------
5,000 * Bally Entertainment Group 35,000
------------------------------------------------------------------
11,400 Block (H&R), Inc. 505,875
------------------------------------------------------------------
18,000 Capital Cities/ABC, Inc. 1,496,250
------------------------------------------------------------------
7,040 CBS, Inc. 421,520
------------------------------------------------------------------
23,550 * Comcast Corp., Class A 385,631
------------------------------------------------------------------
57,700 Disney (Walt) Co. 2,271,937
------------------------------------------------------------------
15,800 Gannett Co., Inc. 758,400
------------------------------------------------------------------
5,100 Hilton Hotels Corp. 309,187
------------------------------------------------------------------
4,050 * King World Productions, Inc. 143,775
------------------------------------------------------------------
5,900 Knight-Ridder, Inc. 303,850
------------------------------------------------------------------
2,950 Luby's Cafeterias, Inc. 68,219
------------------------------------------------------------------
12,500 Marriott Corp. 365,625
------------------------------------------------------------------
76,200 McDonald's Corp. 2,190,750
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
CONSUMER SERVICES--CONTINUED
------------------------------------------------------------------
1,600 Meredith Corp. $ 78,400
------------------------------------------------------------------
3,200 * National Education Corp. 15,600
------------------------------------------------------------------
11,300 New York Times Co., Class A 255,663
------------------------------------------------------------------
10,950 * Promus Cos., Inc. 324,394
------------------------------------------------------------------
5,700 * Ryan's Family Steak Houses, Inc. 35,625
------------------------------------------------------------------
9,000 Service Corp. International 239,625
------------------------------------------------------------------
4,300 * Shoney's, Inc. 64,500
------------------------------------------------------------------
48,200 * Tele-Communications, Inc., Class A 1,090,525
------------------------------------------------------------------
40,340 Time Warner, Inc. 1,432,070
------------------------------------------------------------------
13,800 Times Mirror Co., Class A 450,225
------------------------------------------------------------------
7,200 Tribune Co. 378,900
------------------------------------------------------------------
36,868 * Viacom, Inc. 1,447,069
------------------------------------------------------------------
1,936 * Viacom, Inc., Class A 77,682
------------------------------------------------------------------
24,200 * Viacom, Inc., Rights 31,763
------------------------------------------------------------------
10,700 Wendy's International, Inc. 157,825
------------------------------------------------------------------ ------------
Total 15,335,885
------------------------------------------------------------------ ------------
ELECTRONIC TECHNOLOGY--6.7%
------------------------------------------------------------------
9,700 * Advanced Micro Devices, Inc. 255,838
------------------------------------------------------------------
12,200 * Amdahl Corp. 123,525
------------------------------------------------------------------
11,300 AMP, Inc. 854,562
------------------------------------------------------------------
2,700 * Andrew Corp. 139,725
------------------------------------------------------------------
12,500 Apple Computer, Inc. 539,844
------------------------------------------------------------------
36,600 Boeing Co. 1,605,825
------------------------------------------------------------------
4,600 * Ceridian Corp. 119,600
------------------------------------------------------------------
26,600 * Cisco Systems, Inc. 801,325
------------------------------------------------------------------
26,700 * Compaq Computer Corp. 1,071,338
------------------------------------------------------------------
5,400 * Computer Sciences Corp. 251,100
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
------------------------------------------------------------------
2,800 * Cray Research, Inc. $ 53,550
------------------------------------------------------------------
3,800 * Data General Corp. 37,050
------------------------------------------------------------------
14,200 * Digital Equipment Corp. 434,875
------------------------------------------------------------------
11,800 * DSC Communications Corp. 362,850
------------------------------------------------------------------
3,600 E-Systems, Inc. 149,400
------------------------------------------------------------------
6,100 EG & G, Inc. 98,362
------------------------------------------------------------------
6,720 General Dynamics Corp. 284,760
------------------------------------------------------------------
4,300 Harris Corp. 184,362
------------------------------------------------------------------
27,300 Hewlett-Packard Co. 2,668,575
------------------------------------------------------------------
45,400 Intel Corp. 2,820,475
------------------------------------------------------------------
5,100 * Intergraph Corp. 43,987
------------------------------------------------------------------
62,000 International Business Machines Corp. 4,619,000
------------------------------------------------------------------
6,700 Lockheed Corp. 482,400
------------------------------------------------------------------
9,000 Loral Corp. 356,625
------------------------------------------------------------------
2,600 * M/A Communications, Inc. 18,200
------------------------------------------------------------------
10,300 Martin-Marietta Corp. 472,513
------------------------------------------------------------------
4,200 McDonnell-Douglas Corp. 592,200
------------------------------------------------------------------
10,700 Micron Technology, Inc. 423,988
------------------------------------------------------------------
60,000 Motorola, Inc. 3,532,500
------------------------------------------------------------------
11,800 * National Semiconductor Corp. 207,975
------------------------------------------------------------------
26,900 Northern Telecom, Ltd. 971,763
------------------------------------------------------------------
5,200 Northrop Corp. 228,150
------------------------------------------------------------------
39,600 * Novell, Inc. 732,600
------------------------------------------------------------------
4,800 Perkin-Elmer Corp. 141,600
------------------------------------------------------------------
14,600 Raytheon Co. 930,750
------------------------------------------------------------------
23,700 Rockwell International Corp. 826,537
------------------------------------------------------------------
7,900 Scientific-Atlanta, Inc. 170,838
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
------------------------------------------------------------------
11,400 * Sun Microsystems, Inc. $ 373,350
------------------------------------------------------------------
12,200 * Tandem Computers, Inc. 215,025
------------------------------------------------------------------
3,300 Tektronix, Inc. 125,400
------------------------------------------------------------------
9,700 Texas Instruments, Inc. 726,287
------------------------------------------------------------------
17,500 * Unisys Corp. 185,938
------------------------------------------------------------------
13,300 United Technologies Corp. 837,900
------------------------------------------------------------------
4,900 * Western Atlas, Inc. 225,400
------------------------------------------------------------------ ------------
Total 30,297,867
------------------------------------------------------------------ ------------
ENERGY MINERALS--7.7%
------------------------------------------------------------------
10,000 Amerada-Hess Corp. 497,500
------------------------------------------------------------------
53,500 Amoco Corp. 3,390,563
------------------------------------------------------------------
6,500 Ashland Oil, Inc. 252,688
------------------------------------------------------------------
17,100 Atlantic Richfield Co. 1,853,213
------------------------------------------------------------------
13,900 Burlington Resources 587,275
------------------------------------------------------------------
70,000 Chevron Corp. 3,150,000
------------------------------------------------------------------
133,700 Exxon Corp. 8,406,387
------------------------------------------------------------------
5,200 Kerr-McGee Corp. 255,450
------------------------------------------------------------------
3,600 Louisiana Land & Exploration Co. 163,350
------------------------------------------------------------------
14,400 * Maxus Energy Corp. 68,400
------------------------------------------------------------------
43,000 Mobil Corp. 3,698,000
------------------------------------------------------------------
32,800 Occidental Petroleum Corp. 717,500
------------------------------------------------------------------
10,400 * Oryx Energy Co. 150,800
------------------------------------------------------------------
4,900 Pennzoil Co. 252,350
------------------------------------------------------------------
28,100 Phillips Petroleum Co. 1,036,187
------------------------------------------------------------------
4,400 Pittston Co. 121,550
------------------------------------------------------------------
57,700 Royal Dutch Petroleum Co. 6,722,050
------------------------------------------------------------------
9,712 Santa Fe Energy Resource, Inc. 88,622
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
ENERGY MINERALS--CONTINUED
------------------------------------------------------------------
11,500 Sun Co., Inc. $ 369,438
------------------------------------------------------------------
27,900 Texaco, Inc. 1,823,962
------------------------------------------------------------------
25,900 Unocal Corp. 757,575
------------------------------------------------------------------
30,800 USX Corp. -- Marathon Group 577,500
------------------------------------------------------------------ ------------
Total 34,940,360
------------------------------------------------------------------ ------------
FINANCE--8.4%
------------------------------------------------------------------
11,900 AEtna Life & Casualty Co. 548,888
------------------------------------------------------------------
12,600 Ahmanson (H.F.) & Co. 240,975
------------------------------------------------------------------
4,400 Alexander & Alexander Services, Inc. 89,100
------------------------------------------------------------------
23,400 American General Corp. 643,500
------------------------------------------------------------------
34,162 American International Group, Inc. 3,198,417
------------------------------------------------------------------
40,425 Banc One Funding Corp. 1,167,272
------------------------------------------------------------------
11,300 Bank of Boston Corp. 324,875
------------------------------------------------------------------
38,276 BankAmerica Corp. 1,665,006
------------------------------------------------------------------
8,900 Bankers Trust New York Corp. 594,075
------------------------------------------------------------------
10,500 Barnett Banks, Inc. 435,750
------------------------------------------------------------------
5,600 Beneficial Corp. 219,100
------------------------------------------------------------------
10,500 Boatmen's Bancshares, Inc. 311,063
------------------------------------------------------------------
19,700 Chase Manhattan Corp. 709,200
------------------------------------------------------------------
27,090 Chemical Banking Corp. 1,029,420
------------------------------------------------------------------
9,400 Chubb Corp. 656,825
------------------------------------------------------------------
7,700 CIGNA Corp. 507,237
------------------------------------------------------------------
40,500 Citicorp 1,933,875
------------------------------------------------------------------
5,900 Continental Corp. 89,237
------------------------------------------------------------------
12,600 Corestates Financial Corp. 326,025
------------------------------------------------------------------
18,321 Dean Witter, Discover & Co. 707,649
------------------------------------------------------------------
19,300 Federal Home Loan Mortgage Corp. 1,051,850
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
FINANCE--CONTINUED
------------------------------------------------------------------
29,400 Federal National Mortgage Association $ 2,234,400
------------------------------------------------------------------
8,600 First Fidelity Bancorporation 387,000
------------------------------------------------------------------
8,200 First Interstate Bancorp 656,000
------------------------------------------------------------------
18,100 First Union Corp. 814,500
------------------------------------------------------------------
14,700 Fleet/Norstar Financial Group, Inc. 503,475
------------------------------------------------------------------
9,100 General RE Corp. 1,019,200
------------------------------------------------------------------
6,900 Golden West Financial Corp. 269,100
------------------------------------------------------------------
14,200 Great Western Financial Corp. 253,825
------------------------------------------------------------------
10,000 Household International, Inc. 351,250
------------------------------------------------------------------
20,700 J.P. Morgan and Co., Inc. 1,280,813
------------------------------------------------------------------
5,450 Jefferson-Pilot Corp. 295,662
------------------------------------------------------------------
27,000 KeyCorp 772,875
------------------------------------------------------------------
10,100 Lincoln National Corp. 366,125
------------------------------------------------------------------
7,900 Marsh & McLennan Cos., Inc. 592,500
------------------------------------------------------------------
16,050 MBNA Corp. 429,338
------------------------------------------------------------------
6,800 Mellon Bank Corp. 378,250
------------------------------------------------------------------
22,800 Merrill Lynch & Co., Inc. 1993-1 897,750
------------------------------------------------------------------
15,900 National City Corp. 431,288
------------------------------------------------------------------
28,946 NationsBank Credit Card Master Trust 1993-1 1,432,827
------------------------------------------------------------------
17,250 NBD Bancorp, Inc. 530,438
------------------------------------------------------------------
33,100 Norwest Corp. 810,950
------------------------------------------------------------------
25,200 PNC Bank Corp. 592,200
------------------------------------------------------------------
10,900 Providian Corp. 346,075
------------------------------------------------------------------
8,200 Ryder Systems, Inc. 192,700
------------------------------------------------------------------
6,800 SAFECO Corp. 340,850
------------------------------------------------------------------
11,900 Salomon, Inc. 467,075
------------------------------------------------------------------
10,100 Shawmut National Grantor Trust 1992-A 208,313
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
FINANCE--CONTINUED
------------------------------------------------------------------
9,000 St. Paul Companies, Inc. $ 392,625
------------------------------------------------------------------
13,500 SunTrust Banks, Inc. 683,437
------------------------------------------------------------------
7,950 Torchmark Corp. 293,156
------------------------------------------------------------------
8,400 Transamerica Corp. 412,650
------------------------------------------------------------------
34,278 Travelers, Inc. 1,191,161
------------------------------------------------------------------
10,650 U.S. Bancorp. 263,588
------------------------------------------------------------------
8,200 Unum Corp. 376,175
------------------------------------------------------------------
9,100 USF&G Corp. 123,988
------------------------------------------------------------------
2,400 USLIFE Corp. 78,600
------------------------------------------------------------------
18,600 Wachovia Corp. 623,100
------------------------------------------------------------------
6,000 Wells Fargo & Co. 891,750
------------------------------------------------------------------ ------------
Total 38,634,348
------------------------------------------------------------------ ------------
HEALTH SERVICES--0.9%
------------------------------------------------------------------
8,800 * Beverly Enterprises, Inc. 133,100
------------------------------------------------------------------
36,138 Columbia HCA Healthcare Corp. 1,504,244
------------------------------------------------------------------
4,600 Community Psychiatric Centers 45,425
------------------------------------------------------------------
6,150 Manor Care, Inc. 169,125
------------------------------------------------------------------
17,900 * National Medical Enterprises, Inc. 259,550
------------------------------------------------------------------
2,400 Shared Medical Systems Corp. 70,800
------------------------------------------------------------------
17,300 U.S. Healthcare, Inc. 817,425
------------------------------------------------------------------
17,800 United Healthcare Corp. 938,950
------------------------------------------------------------------ ------------
Total 3,938,619
------------------------------------------------------------------ ------------
HEALTH TECHNOLOGY--6.3%
------------------------------------------------------------------
89,500 Abbott Laboratories 2,774,500
------------------------------------------------------------------
7,100 Allergan, Inc. 187,263
------------------------------------------------------------------
8,100 * Alza Corp. 143,775
------------------------------------------------------------------
33,300 American Home Products Corp. 2,114,550
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
HEALTH TECHNOLOGY--CONTINUED
------------------------------------------------------------------
14,600 * Amgen, Inc. $ 813,950
------------------------------------------------------------------
5,600 Bard (C.R.), Inc. 137,200
------------------------------------------------------------------
29,800 Baxter International, Inc. 774,800
------------------------------------------------------------------
8,100 Becton, Dickinson & Co. 382,725
------------------------------------------------------------------
12,400 * Biomet, Inc. 142,600
------------------------------------------------------------------
55,800 Bristol-Myers Squibb Co. 3,257,325
------------------------------------------------------------------
70,600 Johnson & Johnson 3,856,525
------------------------------------------------------------------
31,500 Lilly (Eli) & Co. 1,953,000
------------------------------------------------------------------
8,200 Mallinckrodt Group, Inc. 249,075
------------------------------------------------------------------
12,400 Medtronic, Inc. 646,350
------------------------------------------------------------------
137,500 Merck & Co., Inc. 4,915,625
------------------------------------------------------------------
34,200 Pfizer, Inc. 2,535,075
------------------------------------------------------------------
21,000 Schering Plough Corp. 1,496,250
------------------------------------------------------------------
5,000 St. Jude Medical, Inc. 186,250
------------------------------------------------------------------
6,000 United States Surgical Corp. 135,000
------------------------------------------------------------------
18,700 Upjohn Co. 617,100
------------------------------------------------------------------
14,600 Warner-Lambert Co. 1,113,250
------------------------------------------------------------------ ------------
Total 28,432,188
------------------------------------------------------------------ ------------
INDUSTRIAL SERVICES--1.2%
------------------------------------------------------------------
15,100 Baker Hughes, Inc. 309,550
------------------------------------------------------------------
18,600 Browning-Ferris Industries, Inc. 590,550
------------------------------------------------------------------
8,800 Fluor Corp. 435,600
------------------------------------------------------------------
3,800 Foster Wheeler Corp. 136,800
------------------------------------------------------------------
12,300 Halliburton Co. 455,100
------------------------------------------------------------------
2,600 Helmerich & Payne, Inc. 81,250
------------------------------------------------------------------
5,600 McDermott International, Inc. 143,500
------------------------------------------------------------------
3,400 Morrison Knudsen Corp. 53,125
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
INDUSTRIAL SERVICES--CONTINUED
------------------------------------------------------------------
6,500 Rollins Environmental Services, Inc. $ 38,188
------------------------------------------------------------------
9,000 * Rowan Companies, Inc. 68,625
------------------------------------------------------------------
26,100 Schlumberger, Ltd. 1,533,375
------------------------------------------------------------------
51,900 WMX Technologies, Inc. 1,524,562
------------------------------------------------------------------
1,300 Zurn Industries, Inc. 23,725
------------------------------------------------------------------ ------------
Total 5,393,950
------------------------------------------------------------------ ------------
NON-ENERGY MINERALS--2.0%
------------------------------------------------------------------
24,100 Alcan Aluminum Ltd. 644,675
------------------------------------------------------------------
9,500 Aluminum Co. of America 809,875
------------------------------------------------------------------
30,300 American Barrick Resource Corp. 723,413
------------------------------------------------------------------
11,200 * Armco, Inc. 79,800
------------------------------------------------------------------
4,500 ASARCO, Inc. 141,187
------------------------------------------------------------------
11,400 * Bethlehem Steel Corp. 216,600
------------------------------------------------------------------
9,850 Cyprus Minerals 262,256
------------------------------------------------------------------
12,000 Echo Bay Mines, Ltd. 147,000
------------------------------------------------------------------
9,700 Georgia-Pacific Corp. 716,587
------------------------------------------------------------------
14,700 Homestake Mining Co. 275,625
------------------------------------------------------------------
12,400 Inco Ltd. 373,550
------------------------------------------------------------------
4,300 * Inland Steel Industries, Inc. 153,725
------------------------------------------------------------------
11,800 Louisiana-Pacific Corp. 361,375
------------------------------------------------------------------
9,111 Newmont Mining Corp. 376,968
------------------------------------------------------------------
9,400 Nucor Corp. 580,450
------------------------------------------------------------------
4,600 * Owens-Corning Fiberglass Corp. 148,925
------------------------------------------------------------------
7,600 Phelps Dodge Corp. 466,450
------------------------------------------------------------------
25,600 Placer Dome, Inc. 553,600
------------------------------------------------------------------
6,400 Reynolds Metals Co. 354,400
------------------------------------------------------------------
11,835 * Santa Fe Pacific Gold 170,128
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
NON-ENERGY MINERALS--CONTINUED
------------------------------------------------------------------
7,920 USX-U.S. Steel Group $ 297,000
------------------------------------------------------------------
22,100 Weyerhaeuser Co. 867,425
------------------------------------------------------------------
9,750 Worthington Industries, Inc. 216,937
------------------------------------------------------------------ ------------
Total 8,937,951
------------------------------------------------------------------ ------------
PROCESS INDUSTRIES--4.9%
------------------------------------------------------------------
12,300 Air Products & Chemicals, Inc. 587,325
------------------------------------------------------------------
38,746 Archer-Daniels-Midland Co. 1,109,104
------------------------------------------------------------------
6,300 Avery Dennison Corp. 211,838
------------------------------------------------------------------
3,200 Ball Corp. 90,400
------------------------------------------------------------------
5,500 Bemis Co., Inc. 136,125
------------------------------------------------------------------
4,100 Boise Cascade Corp. 108,650
------------------------------------------------------------------
10,000 Champion International Corp. 370,000
------------------------------------------------------------------
21,700 Corning, Inc. 737,800
------------------------------------------------------------------
9,500 * Crown Cork & Seal Co., Inc. 369,312
------------------------------------------------------------------
29,500 Dow Chemical Co. 2,168,250
------------------------------------------------------------------
72,900 Du Pont (E.I.) de Nemours 4,346,662
------------------------------------------------------------------
8,825 Eastman Chemical Co. 476,550
------------------------------------------------------------------
6,800 Ecolab, Inc. 145,350
------------------------------------------------------------------
10,375 Engelhard Corp. 243,813
------------------------------------------------------------------
4,500 Federal Paper Board Co., Inc. 135,000
------------------------------------------------------------------
2,200 First Mississippi Corp. 46,200
------------------------------------------------------------------
2,800 Goodrich, (B.F.) Co. 125,650
------------------------------------------------------------------
10,000 Grace (W.R.) & Co. 396,250
------------------------------------------------------------------
7,700 Great Lakes Chemical Corp. 452,375
------------------------------------------------------------------
4,600 Hercules, Inc. 537,050
------------------------------------------------------------------
13,300 International Paper Co. 990,850
------------------------------------------------------------------
8,800 James River Corp. of Virginia 201,300
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
PROCESS INDUSTRIES--CONTINUED
------------------------------------------------------------------
17,300 Kimberly-Clark Corp. $ 890,950
------------------------------------------------------------------
6,400 Mead Corp. 317,600
------------------------------------------------------------------
2,600 Millipore Corp. 133,575
------------------------------------------------------------------
12,900 Monsanto Co. 982,012
------------------------------------------------------------------
15,600 Morton International, Inc. 444,600
------------------------------------------------------------------
7,500 Nalco Chemical Co. 241,875
------------------------------------------------------------------
12,533 Pall Corp. 227,161
------------------------------------------------------------------
9,600 Pioneer Hi-Bred International 321,600
------------------------------------------------------------------
3,100 Potlatch Corp. 118,575
------------------------------------------------------------------
22,800 PPG Industries, Inc. 929,100
------------------------------------------------------------------
14,400 Praxair, Inc. 333,000
------------------------------------------------------------------
7,300 Rohm & Haas Co. 440,737
------------------------------------------------------------------
8,000 Scott Paper Co. 529,000
------------------------------------------------------------------
9,600 Sherwin-Williams Co. 313,200
------------------------------------------------------------------
5,300 Sigma-Aldrich Corp. 184,175
------------------------------------------------------------------
1,900 Springs Industries, Inc., Class A 76,713
------------------------------------------------------------------
9,408 * Stone Container Corp. 157,584
------------------------------------------------------------------
5,900 Temple-Inland, Inc. 278,775
------------------------------------------------------------------
7,500 Union Camp Corp. 356,250
------------------------------------------------------------------
16,300 Union Carbide Corp. 539,937
------------------------------------------------------------------
7,200 Westvaco Corp. 252,000
------------------------------------------------------------------ ------------
Total 22,054,273
------------------------------------------------------------------ ------------
PRODUCER MANUFACTURING--6.3%
------------------------------------------------------------------
30,400 Allied-Signal, Inc. 1,052,600
------------------------------------------------------------------
4,000 Armstrong World Industries, Inc. 166,000
------------------------------------------------------------------
21,800 Caterpillar, Inc. 1,302,550
------------------------------------------------------------------
3,600 Cincinnati Milacron, Inc. 98,550
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
------------------------------------------------------------------
1,900 * Clark Equipment Co. $ 133,237
------------------------------------------------------------------
12,200 Cooper Industries, Inc. 455,975
------------------------------------------------------------------
3,200 Crane Co. 86,800
------------------------------------------------------------------
3,800 Cummins Engine Co., Inc. 161,500
------------------------------------------------------------------
10,000 Dana Corp. 256,250
------------------------------------------------------------------
9,000 Deere & Co. 645,750
------------------------------------------------------------------
10,200 Dial Corp. Del. 210,375
------------------------------------------------------------------
6,100 Dover Corp. 338,550
------------------------------------------------------------------
18,700 Dresser Industries, Inc. 395,038
------------------------------------------------------------------
7,500 Eaton Corp. 392,813
------------------------------------------------------------------
24,200 Emerson Electric Co. 1,470,150
------------------------------------------------------------------
3,900 * FMC Corp. 237,900
------------------------------------------------------------------
183,800 General Electric Co. 8,983,225
------------------------------------------------------------------
4,800 General Signal Corp. 172,800
------------------------------------------------------------------
3,700 Giddings & Lewis, Inc. 57,350
------------------------------------------------------------------
2,578 Harnischfeger Industries, Inc. 64,450
------------------------------------------------------------------
14,500 Honeywell, Inc. 467,625
------------------------------------------------------------------
12,100 Illinois Tool Works, Inc. 542,987
------------------------------------------------------------------
11,300 Ingersoll-Rand Co. 402,562
------------------------------------------------------------------
12,800 ITT Corp. 1,129,600
------------------------------------------------------------------
4,300 Johnson Controls, Inc. 213,925
------------------------------------------------------------------
16,400 Masco Industries, Inc. 389,500
------------------------------------------------------------------
46,800 Minnesota Mining & Manufacturing Co. 2,591,550
------------------------------------------------------------------
1,000 NACCO Industries, Inc., Class A 59,000
------------------------------------------------------------------
5,300 National Service Industries, Inc. 141,775
------------------------------------------------------------------
7,870 * Navistar International Corp. 103,294
------------------------------------------------------------------
4,140 PACCAR, Inc. 185,265
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
------------------------------------------------------------------
5,200 Parker-Hannifin Corp. $ 243,100
------------------------------------------------------------------
17,000 Pitney Bowes, Inc. 573,750
------------------------------------------------------------------
4,500 Raychem Corp. 166,500
------------------------------------------------------------------
6,000 Teledyne, Inc. 102,750
------------------------------------------------------------------
18,200 Tenneco, Inc. 805,350
------------------------------------------------------------------
9,400 Textron, Inc. 479,400
------------------------------------------------------------------
2,000 Thomas & Betts Corp. 142,500
------------------------------------------------------------------
3,300 Timken Co. 115,087
------------------------------------------------------------------
3,100 Trinova Corp. 108,500
------------------------------------------------------------------
6,900 TRW, Inc. 491,625
------------------------------------------------------------------
5,000 Tyco Laboratories, Inc. 241,250
------------------------------------------------------------------
4,680 * Varity Corp. 179,010
------------------------------------------------------------------
37,700 Westinghouse Electric Corp. 532,513
------------------------------------------------------------------
11,500 Whitman Corp. 189,750
------------------------------------------------------------------
11,200 Xerox Corp. 1,148,000
------------------------------------------------------------------ ------------
Total 28,428,031
------------------------------------------------------------------ ------------
RETAIL TRADE--5.1%
------------------------------------------------------------------
27,200 Albertsons, Inc. 816,000
------------------------------------------------------------------
15,200 American Stores Co. 412,300
------------------------------------------------------------------
8,400 Brunos, Inc. 80,850
------------------------------------------------------------------
11,000 Charming Shoppes, Inc. 79,750
------------------------------------------------------------------
10,300 Circuit City Stores, Inc. 262,650
------------------------------------------------------------------
7,700 Dayton-Hudson Corp. 596,750
------------------------------------------------------------------
12,100 Dillard Department Stores, Inc., Class A 320,650
------------------------------------------------------------------
15,600 Gap (The), Inc. 526,500
------------------------------------------------------------------
6,400 Giant Foods, Inc., Class A 147,200
------------------------------------------------------------------
4,100 Great Atlantic & Pacific Tea Co., Inc. 107,113
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
RETAIL TRADE--CONTINUED
------------------------------------------------------------------
8,200 Harcourt General, Inc. $ 303,400
------------------------------------------------------------------
48,100 Home Depot, Inc. 2,188,550
------------------------------------------------------------------
25,300 J.C. Penny Co. 1,280,812
------------------------------------------------------------------
43,900 K Mart Corp. 718,862
------------------------------------------------------------------
11,400 * Kroger Co., Inc. 297,825
------------------------------------------------------------------
39,100 Limited, Inc. 718,462
------------------------------------------------------------------
2,200 Longs Drug Stores Corp. 76,450
------------------------------------------------------------------
15,800 Lowe's Cos. Inc. 628,050
------------------------------------------------------------------
26,700 May Department Stores Co. 1,004,588
------------------------------------------------------------------
11,300 Melville Corp. 377,137
------------------------------------------------------------------
4,000 Mercantile Stores Co., Inc. 182,000
------------------------------------------------------------------
8,800 Nordstrom, Inc. 433,400
------------------------------------------------------------------
6,500 Pep Boys-Manny Moe & Jack 232,375
------------------------------------------------------------------
6,800 Premark International, Inc. 304,300
------------------------------------------------------------------
23,350 * Price Co. 367,763
------------------------------------------------------------------
9,500 Rite Aid Corp. 228,000
------------------------------------------------------------------
37,700 Sears, Roebuck & Co. 1,866,150
------------------------------------------------------------------
6,865 Tandy Corp. 303,776
------------------------------------------------------------------
7,900 TJX Cos., Inc. 124,425
------------------------------------------------------------------
31,400 * Toys "R" Us, Inc. 1,208,900
------------------------------------------------------------------
247,600 Wal-Mart Stores, Inc. 5,818,600
------------------------------------------------------------------
13,200 Walgreen Co. 547,800
------------------------------------------------------------------
8,200 Winn-Dixie Stores, Inc. 433,575
------------------------------------------------------------------
14,100 Woolworth (F.W.) Co. 218,550
------------------------------------------------------------------ ------------
Total 23,213,513
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
TECHNOLOGY SERVICES--2.5%
------------------------------------------------------------------
5,200 Autodesk, Inc. $ 179,400
------------------------------------------------------------------
15,300 Automatic Data Processing, Inc. 893,137
------------------------------------------------------------------
17,900 Computer Associates International, Inc. 888,287
------------------------------------------------------------------
11,600 First Data Corp. 581,450
------------------------------------------------------------------
80,100 General Motors Corp. 3,163,950
------------------------------------------------------------------
215 * Harris Computer Systems Corp. 3,010
------------------------------------------------------------------
4,500 * Lotus Development Corp. 172,125
------------------------------------------------------------------
62,000 * Microsoft Corp. 3,906,000
------------------------------------------------------------------
30,600 * Oracle Systems Corp. 1,407,600
------------------------------------------------------------------ ------------
Total 11,194,959
------------------------------------------------------------------ ------------
TRANSPORTATION--1.3%
------------------------------------------------------------------
8,100 * AMR Corp. 446,512
------------------------------------------------------------------
9,600 Burlington Northern, Inc. 478,800
------------------------------------------------------------------
3,800 * Consolidated Freightways, Inc. 85,025
------------------------------------------------------------------
8,600 Consolidated Rail Corp. 467,625
------------------------------------------------------------------
11,200 CSX Corp. 812,000
------------------------------------------------------------------
5,400 Delta Air Lines, Inc. 281,475
------------------------------------------------------------------
5,900 * Federal Express Corp. 358,425
------------------------------------------------------------------
15,000 Norfolk Southern Corp. 945,000
------------------------------------------------------------------
4,200 Roadway Services, Inc. 240,450
------------------------------------------------------------------
19,725 * Sante Fe Southern Pacific Corp. 303,272
------------------------------------------------------------------
13,200 Southwest Airlines, Inc. 311,850
------------------------------------------------------------------
22,100 Union Pacific Corp. 1,080,137
------------------------------------------------------------------
6,200 * USAir Group, Inc. 27,125
------------------------------------------------------------------
3,000 Yellow Corp. 58,500
------------------------------------------------------------------ ------------
Total 5,896,196
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
UTILITIES--10.8%
------------------------------------------------------------------
167,278 AT&T Corp. $ 9,200,290
------------------------------------------------------------------
52,800 * Airtouch Communications, Inc. 1,577,400
------------------------------------------------------------------
19,900 American Electric Power Co., Inc. 636,800
------------------------------------------------------------------
58,400 Ameritech Corp. 2,357,900
------------------------------------------------------------------
15,550 Baltimore Gas & Electric Co. 361,538
------------------------------------------------------------------
46,800 Bell Atlantic Corp. 2,451,150
------------------------------------------------------------------
53,400 BellSouth Corp. 2,843,550
------------------------------------------------------------------
17,300 Carolina Power & Light Co. 456,287
------------------------------------------------------------------
20,300 Central & SouthWest Corp. 456,750
------------------------------------------------------------------
6,240 Cinergy Corp. 144,307
------------------------------------------------------------------
11,200 Coastal Corp. 319,200
------------------------------------------------------------------
5,400 * Columbia Gas System, Inc. 150,525
------------------------------------------------------------------
25,200 Consolidated Edison Co. 626,850
------------------------------------------------------------------
10,000 Consolidated Natural Gas Co. 362,500
------------------------------------------------------------------
15,800 Detroit Edison Co. 416,725
------------------------------------------------------------------
17,750 Dominion Resources, Inc. 658,969
------------------------------------------------------------------
22,100 Duke Power Co. 875,712
------------------------------------------------------------------
2,400 Eastern Enterprises 62,400
------------------------------------------------------------------
25,600 Enron Corp. 828,800
------------------------------------------------------------------
7,200 Enserch Corp. 102,600
------------------------------------------------------------------
24,800 Entergy Corp. 579,700
------------------------------------------------------------------
20,200 FPL Group, Inc. 669,125
------------------------------------------------------------------
101,700 GTE Corp. 3,127,275
------------------------------------------------------------------
14,000 Houston Industries, Inc. 488,250
------------------------------------------------------------------
57,100 MCI Communications Corp. 1,313,300
------------------------------------------------------------------
15,300 Niagara Mohawk Power Corp. 210,375
------------------------------------------------------------------
6,000 NICOR, Inc. 146,250
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
UTILITIES--CONTINUED
------------------------------------------------------------------
13,200 Noram Energy Corp. $ 79,200
------------------------------------------------------------------
7,100 Northern States Power Co. 315,063
------------------------------------------------------------------
44,400 NYNEX Corp. 1,742,700
------------------------------------------------------------------
16,400 Ohio Edison Co. 315,700
------------------------------------------------------------------
2,900 ONEOK, Inc. 51,113
------------------------------------------------------------------
9,000 Pacific Enterprises 193,500
------------------------------------------------------------------
46,600 Pacific Gas & Electric Co. 1,048,500
------------------------------------------------------------------
44,700 Pacific Telesis Group 1,413,637
------------------------------------------------------------------
29,400 Pacificorp 518,175
------------------------------------------------------------------
12,700 Panhandle Eastern Corp. 298,450
------------------------------------------------------------------
23,800 Peco Energy Co. 609,875
------------------------------------------------------------------
3,700 Peoples Energy Corp. 104,525
------------------------------------------------------------------
26,000 Public Service Enterprises Group, Inc. 682,500
------------------------------------------------------------------
48,200 SCE Corp. 668,775
------------------------------------------------------------------
9,400 Sonat, Inc. 305,500
------------------------------------------------------------------
68,800 Southern Co. 1,358,800
------------------------------------------------------------------
64,400 Southwestern Bell Corp. 2,696,750
------------------------------------------------------------------
36,600 Sprint Corp. 1,194,075
------------------------------------------------------------------
24,000 Texas Utilities Co. 783,000
------------------------------------------------------------------
4,300 Transco Energy Co. 61,813
------------------------------------------------------------------
47,200 U.S. West, Inc. 1,775,900
------------------------------------------------------------------
23,000 Unicom Corp. 497,375
------------------------------------------------------------------
11,000 Union Electric Co. 394,625
------------------------------------------------------------------
11,000 Williams Companies, Inc. (The) 319,000
------------------------------------------------------------------ ------------
Total 48,853,079
------------------------------------------------------------------ ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $334,927,884) 367,162,941
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--1.0%
- ----------------------------------------------------------------------------------
$ 4,500,000 United States Treasury Bill, 12/1/1994 (at amortized cost) $ 4,482,938
------------------------------------------------------------------ ------------
**REPURCHASE AGREEMENT--17.9%
- ----------------------------------------------------------------------------------
80,875,000 J.P. Morgan and Co., Inc., 4.82%, dated 10/31/94, due 11/1/94
(at amortized cost) 80,875,000
------------------------------------------------------------------ ------------
TOTAL INVESTMENTS (IDENTIFIED COST $420,285,822) $452,520,879+
------------------------------------------------------------------ ------------
</TABLE>
* Non-income producing securities.
** The repurchase agreement is fully collateralized by U.S. government
obligations. The investment in the repurchase agreement is through
participation in joint accounts with other Federated Investors funds.
+ The cost of investments for federal tax purposes amounts to $420,285,822. The
net unrealized appreciation of investments on a federal tax cost basis
amounts to $32,235,057, which is comprised of $52,103,326 appreciation and
$19,868,269 depreciation at October 31, 1994.
Note: The categories of investments are shown as a percentage of net assets
($452,432,357) at October 31, 1994.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Investment in repurchase agreements, at amortized cost $ 80,875,000
- -----------------------------------------------------------------
Investments in securities, at value and amortized cost 371,645,879
- ----------------------------------------------------------------- ------------
Total investments, at amortized cost and value
(identified and tax cost $420,285,822) $452,520,879
- --------------------------------------------------------------------------------
Cash 47,765
- --------------------------------------------------------------------------------
Dividends and interest receivable 739,241
- --------------------------------------------------------------------------------
Receivable for Fund shares sold 479,754
- --------------------------------------------------------------------------------
Deferred expenses 1,001
- -------------------------------------------------------------------------------- ------------
Total assets 453,788,640
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for Fund shares redeemed 682,599
- -----------------------------------------------------------------
Payable for daily variation margin on open futures contracts 603,750
- -----------------------------------------------------------------
Accrued expenses 69,934
- ----------------------------------------------------------------- ------------
Total liabilities 1,356,283
- -------------------------------------------------------------------------------- ------------
NET ASSETS for 37,647,505 shares of beneficial interest outstanding $452,432,357
- -------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital $418,267,944
- --------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on investments and futures contracts 32,850,422
- --------------------------------------------------------------------------------
Accumulated undistributed net realized gain (loss) on investments and
futures contracts 352,786
- --------------------------------------------------------------------------------
Undistributed net investment income 961,205
- -------------------------------------------------------------------------------- ------------
Total Net Assets $452,432,357
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
Institutional Shares (net assets of $443,815,104 / 36,930,606 shares of
beneficial interest outstanding) $12.02
- -------------------------------------------------------------------------------- ------------
Institutional Service Shares (net assets of $8,617,253 / 716,899
shares of beneficial interest outstanding) $12.02
- -------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------------------
Dividends $ 9,996,788
- --------------------------------------------------------------------------------------------
Interest 2,932,435
- -------------------------------------------------------------------------------------------- -----------
Total investment income 12,929,223
- --------------------------------------------------------------------------------------------
EXPENSES:
- --------------------------------------------------------------------------------------------
Management fee $1,287,529
- ------------------------------------------------------------------------------
Trustees' fees 6,387
- ------------------------------------------------------------------------------
Custodian and portfolio accounting fees 154,440
- ------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 42,900
- ------------------------------------------------------------------------------
Fund share registration costs 42,066
- ------------------------------------------------------------------------------
Auditing fees 21,612
- ------------------------------------------------------------------------------
Legal fees 15,260
- ------------------------------------------------------------------------------
Printing and postage 44,070
- ------------------------------------------------------------------------------
Insurance premiums 11,102
- ------------------------------------------------------------------------------
Distribution service fees 15,802
- ------------------------------------------------------------------------------
Taxes 9,804
- ------------------------------------------------------------------------------
Miscellaneous 5,741
- ------------------------------------------------------------------------------
Shareholder services fee 10,144
- ------------------------------------------------------------------------------ ----------
Total expenses 1,666,857
- ------------------------------------------------------------------------------
Deduct--
- ------------------------------------------------------------------------------
Waiver of management fee $289,795
- ------------------------------------------------------------------- --------
Waiver of distribution service fees 10,144 299,939
- ------------------------------------------------------------------- -------- ----------
Net expenses 1,366,918
- -------------------------------------------------------------------------------------------- -----------
Net investment income 11,562,305
- -------------------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES CONTRACTS:
- --------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) 1,025,864
- --------------------------------------------------------------------------------------------
Net realized gain (loss) on futures contracts (identified cost basis) 129,511
- --------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments and futures contracts 3,003,321
- -------------------------------------------------------------------------------------------- -----------
Net realized and unrealized gain (loss) on investments and futures contracts 4,158,696
- -------------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $15,721,001
- -------------------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
------------------------------
1994 1993
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------------------------
Net investment income $ 11,562,305 $ 9,177,268
- ------------------------------------------------------------------------
Net realized gain on investment transactions and futures contracts
($973,460 and $11,617,039 net gains, respectively, as computed for
federal tax purposes) 1,155,375 11,086,529
- ------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments and
futures contracts 3,003,321 26,567,254
- ------------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from operations 15,721,001 46,831,051
- ------------------------------------------------------------------------ ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------------------------
Dividends to shareholders from net investment income
- ------------------------------------------------------------------------
Institutional Shares (10,781,243) (9,255,446)
- ------------------------------------------------------------------------
Institutional Service Shares (115,401) (14,290)
- ------------------------------------------------------------------------
Distributions to shareholders from net realized gain on investment
transactions and future contracts
- ------------------------------------------------------------------------
Institutional Shares (11,507,864) (18,292,038)
- ------------------------------------------------------------------------
Institutional Service Shares (108,965) --
- ------------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from distributions to shareholders (22,513,473) (27,561,774)
- ------------------------------------------------------------------------ ------------- -------------
FUND SHARE (PRINCIPAL) TRANSACTIONS--
- ------------------------------------------------------------------------
Proceeds from sale of shares 215,864,930 290,371,076
- ------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
dividends declared 8,535,336 8,873,310
- ------------------------------------------------------------------------
Cost of shares redeemed (174,914,182) (218,388,643)
- ------------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from fund share transactions 49,486,084 80,855,743
- ------------------------------------------------------------------------ ------------- -------------
Change in net assets 42,693,612 100,125,020
- ------------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------------
Beginning of period 409,738,745 309,613,725
- ------------------------------------------------------------------------ ------------- -------------
End of period (including undistributed net investment income of $961,205
and $295,544, respectively) $ 452,432,357 $ 409,738,745
- ------------------------------------------------------------------------ ------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1994
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Index 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 Federated Max-Cap Fund (the
"Fund"). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held.
The Fund offers two classes of Shares, Institutional Shares and Institutional
Service Shares.
Effective December 5, 1994, the Board of Trustees ("Trustees") changed the name
of the Fund from Max-Cap Fund to Federated Max-Cap 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. These
policies are in conformity with generally accepted accounting principles.
<TABLE>
<S> <C>
A. INVESTMENT VALUATIONS--Listed equity securities are valued at the last sales price
reported on national securities exchanges. Unlisted securities and short-term
obligations (and private placement securities) are generally valued at the prices
provided by an independent pricing service. Short-term securities with remaining
maturities of sixty days or less may be stated at amortized cost, which approximates
value.
B. REPURCHASE AGREEMENTS--It is the policy of the Fund to require the custodian bank to
take possession, to have legally segregated in the Federal Reserve Book Entry System, or
to have segregated within the custodian bank's vault, all securities held as collateral
in support of repurchase agreement investments. Additionally, procedures have been
established by the Trust to monitor, on a daily basis, the market value of each
repurchase agreement's underlying collateral to ensure the value of collateral at least
equals the principal amount of the repurchase agreement, including accrued interest.
The Fund will only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the Fund's adviser
to be creditworthy pursuant to the guidelines established by the Trustees. Risks may
arise from the potential inability of counterparties to honor the terms of the
repurchase agreement. Accordingly, the Fund could receive less than the repurchase price
on the sale of collateral securities.
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and distributions to
shareholders are recorded on the ex-dividend date. 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").
D. 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.
E. 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.
F. 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 its
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.
G. FUTURES CONTRACTS--Upon entering into a financial futures contract with a broker, the
Fund is required to deposit in a segregated account an amount ("initial margin") of cash
or U.S. government securities equal to a percentage of the contract value. The Fund
agrees to receive from or pay the broker an amount of cash equal to a specific dollar
amount times the difference between the closing value and the price at which the
contract was made. On a daily basis, the value of the financial futures contract is
determined and any difference between such value and the original futures contract value
is reflected in the "daily variation margin" account. Daily variation margin
adjustments, arising from this "marking to market" process, are recorded by the Fund as
unrealized gains or losses.
The Fund may decide to close its position on a contract at any time prior to the
contract's expiration. When a contract is closed, the Fund recognizes a realized gain or
loss. Risks of entering into futures contracts include the possibility that a change in
the value of the contract may not correlate with changes in the value of the underlying
securities. For the fiscal year ended October 31, 1994, the Fund had a realized gain of
$129,511 on futures contracts.
At October 31, 1994, the fund had outstanding futures contracts as set out below:
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO APPRECIATION
EXPIRATION DATE DELIVER/RECEIVE POSITION (DEPRECIATION)
---------------- ------------------------- ---------------- ----------------
<S> <C> <C> <C>
December 1994 322 S&P 500 Index Futures Long $615,365
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
At October 31, 1994 the Fund has deposited in a segregated account, $4,500,000 of U.S.
Treasury Bills, to cover margin requirements on open futures contracts.
H. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1994 1993
---------------------------- ----------------------------
INSTITUTIONAL SHARES SHARES DOLLARS SHARES DOLLARS
- ----------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold 17,555,003 $ 207,304,786 24,571,558 $ 287,913,472
- -----------------------------------------
Shares issued to shareholders in payment
of dividends declared 718,661 8,439,495 764,603 8,868,865
- -----------------------------------------
Shares redeemed (14,617,884) (172,243,416) (18,666,049) (218,365,814)
- ----------------------------------------- ----------- ------------- ----------- -------------
Net change resulting from Institutional
Share transactions 3,655,780 $ 43,500,865 6,670,112 $ 78,416,523
- ----------------------------------------- ----------- ------------- ----------- -------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1994 1993**
---------------------------- ----------------------------
INSTITUTIONAL SERVICE SHARES SHARES DOLLARS SHARES DOLLARS
- ----------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold 734,647 $ 8,560,144 205,208 $ 2,457,604
- -----------------------------------------
Shares issued to shareholders in payment
of dividends declared 8,223 95,841 372 4,445
- -----------------------------------------
Shares redeemed (229,644) (2,670,766) (1,907) (22,829)
- ----------------------------------------- ----------- ------------- ----------- -------------
Net change resulting from Institutional
Service Share transactions 513,226 $ 5,985,219 203,673 $ 2,439,220
- ----------------------------------------- ----------- ------------- ----------- -------------
</TABLE>
** For period from August 30, 1993 (date of initial public investment) to
October 31, 1993.
(4) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEE--Federated Management, the Fund's investment Manager (the
"Manager"), receives for its services an annual investment advisory fee equal to
0.30 of 1% of the Fund's average daily net assets. Federated Management has
entered into a sub-management contract with ANB Investment Management and Trust
Company ("Sub-Manager"). The Manager shall pay the Sub-Manager an investment
advisory fee based on the average daily net assets of the Fund as follows: .05
of 1% on the
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
first $100 million, .02 of 1% on the next $100 million, and .01 of 1%
thereafter. The Manager may voluntarily choose to waive a portion of its fees.
The Manager can modify or terminate this voluntary waiver at any time at its
sole discretion.
DISTRIBUTION AND SHAREHOLDER SERVICES PLAN--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 .30 of 1% of the average
daily net assets of the Institutional Service Shares, annually, to compensate
FSC.
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services ("FSS"), the Fund will pay FSS up to .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--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 Trust are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
fiscal year ended October 31, 1994 were as follows:
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
PURCHASES-- $15,495,999
- ------------------------------------------------------------------------------- -----------
SALES-- $ 7,502,814
- ------------------------------------------------------------------------------- -----------
</TABLE>
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of
FEDERATED INDEX TRUST:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Federated Max-Cap Fund (a portfolio of
Federated Index Trust), as of October 31, 1994, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the financial highlights
(see pages 2 and 18 of this prospectus) for each of 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 audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1994, 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 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
Federated Max-Cap Fund of Federated Index Trust at October 31, 1994, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended and the financial highlights for
the periods presented, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
December 9, 1994
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Federated Max-Cap Fund Federated Investors Tower
Institutional Service Shares Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------
Manager
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------
Sub-Manager
ANB Investment Management One North LaSalle Street
and Trust Co. Chicago, Illinois 60690
- ------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8602
Trust Company Boston, Massachusetts 02266-8602
- ------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------
Legal Counsel
Dickstein, Shapiro & Morin, L.L.P. 2101 L Street, N.W.
Washington, D.C. 20037
- ------------------------------------------------------------------------------------------
Independent Auditors
Ernst & Young LLP One Oxford Centre
Pittsburgh, Pennsylvania 15219
- ------------------------------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
(A PORTFOLIO OF FEDERATED INDEX TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
An Open-End, Diversified
Management Investment Company
Prospectus dated December 31, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
31420E403
0032104A-ISS (12/94)
Federated Max-Cap Fund (formerly Max-Cap Fund)
(A Portfolio of Federated Index Trust)
Institutional Shares
Institutional Service Shares
Combined Statement of Additional Information
The Institutional Shares and Institutional Service Shares of
Federated Max-Cap Fund (the "Fund") (a portfolio of Federated
Index Trust) represent interests in a diversified portfolio of
securities. This Combined Statement of Additional Information
should be read with the respective prospectus for Institutional
Shares and Institutional Service Shares dated December 31,
1994. This Statement is not a prospectus itself. To receive a
copy of either prospectus, write or call Federated Max-Cap
Fund.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Statement dated December 31, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED
INVESTORS
General Information About the
Fund 1
Investment Objective and Policies 1
Types of Investments 1
Money Market Instruments 1
Repurchase Agreements 1
U.S. Government Obligations 1
Variable Rate U.S. Government
Securities 2
Stock Index Futures and
Options 2
When-Issued and Delayed
Delivery Transactions 3
Lending of Portfolio Securities 3
Reverse Repurchase Agreements 3
Portfolio Turnover 3
Investment Limitations 3
Investing in Commodities 3
Selling Short and Buying on
Margin 3
Lending Cash or Securities 4
Underwriting 4
Investing in Issuers Whose
Securities are Owned by
Officers and Trustees of the
Trust 4
Issuing Senior Securities and
Borrowing Money 4
Diversification of Investments 4
Concentration of Investments 4
Investing in Real Estate 4
Investing in Restricted
Securities 4
Writing Covered Call Options 4
Investing in Put Options 5
Investing in Minerals 5
Acquiring Securities 5
Investing in Illiquid
Securities 5
Pledging Assets 5
Investing in Warrants 5
Federated Index Trust
Management 5
Officers and Trustees 5
The Funds 8
Fund Ownership 9
Trustee Liability 9
Managers to the Fund 9
Management Fees 9
State Expense Limitations 10
Other Related Services 10
Administrative Services 10
Brokerage Transactions 10
Purchasing Shares 11
Distribution Plan
(Institutional Service Shares) 11
Conversion to Federal Funds 11
Determining Net Asset Value 11
Determining Market Value of
Securities 11
Redeeming Shares 12
Redemption in Kind 12
Tax Status 12
The Fund's Tax Status 12
Shareholders' Tax Status 12
Capital Gains 12
Total Return 13
Yield 13
Performance Comparisons 13
Standard & Poor's Ratings Group 14
General Information About the Fund
Federated Max-Cap Fund is a portfolio of Federated Index Trust (the
"Trust"), which was established as a Massachusetts business trust under
a Declaration of Trust dated January 30, 1990. Shares of the Fund are
offered in two classes, known as Institutional Shares and Institutional
Service Shares (individually and collectively referred to as
"Shares"). This Combined Statement of Additional Information relates
to the Shares of the Fund.
Investment Objective and Policies
The Fund's investment objective is to provide investment results that
correspond to the aggregate price and dividend performance of publicly-
traded common stocks, by duplicating the composition of the Standard &
Poor's 500 Composite Stock Price Index. The investment objective cannot
be changed without approval of shareholders. The policies described
below may be changed by the Board of Trustees ("Trustees") without
shareholder approval. Shareholders will be notified before any material
change in these policies becomes effective.
Types of Investments
In addition to the common stocks described in the prospectus, the Fund
may also invest in money market instruments and U.S. government
obligations and securities in such proportions as, in the judgment of
the managers, prevailing market conditions warrant.
Money Market Instruments
The Fund may invest in the following money market instruments:
o instruments of domestic and foreign banks and savings and loans
having capital, surplus, and undivided profits of over
$100,000,000, or if the principal amount of the instrument is
insured in full by the Federal Deposit Insurance Corporation;
and
o prime commercial paper (rated A-1 by Standard and Poor's
Ratings Group, Prime-1 by Moody's Investors Service, Inc.,
or F-1 by Fitch Investors Service).
Repurchase Agreements
When purchasing U.S. government securities pursuant to repurchase
agreements, in the event that a defaulting seller of the
securities filed for bankruptcy or became insolvent, disposition
of such securities by the Fund might be delayed pending court
action. The Fund believes that under the regular procedures
normally in effect for custody of the Fund's portfolio securities
subject to repurchase agreements, a court of competent
jurisdiction would rule in favor of the Fund and allow retention
or disposition of such securities. The Fund will only enter into
repurchase agreements with banks and other recognized financial
institutions such as broker/dealers which are deemed by the Fund's
managers to be creditworthy pursuant to guidelines established by
the Trustees. The Fund or its custodian will take possession of
the securities subject to repurchase agreements and these
securities will be marked to market daily.
U.S. Government Obligations
The types of U.S. government obligations in which the Fund may
invest generally include direct obligations of the U.S. Treasury
(such as U.S. Treasury bills, notes, and bonds) and obligations
issued or guaranteed by U.S. government agencies or
instrumentalities. These securities are backed by:
o the full faith and credit of the U.S. Treasury;
o the issuer's right to borrow from the U.S. Treasury;
o the discretionary authority of the U.S. government to purchase
certain obligations of agencies or instrumentalities; or
o the credit of the agency or instrumentality issuing the
obligations.
Examples of agencies and instrumentalities which may not always
receive financial support from the U.S. government are:
o Federal Land Banks;
o Central Bank for Cooperatives;
o Federal Intermediate Credit Banks; Federal Home Loan Banks;
o Farmers Home Administration; and Federal National Mortgage
Association.
Variable Rate U.S. Government Securities
In the case of certain U.S. government securities purchased by the
Fund that carry variable interest rates, these rates will reduce
the changes in the market value of such securities from their
original purchase prices.
Accordingly, the potential for capital appreciation or capital
depreciation should not be greater than the potential for capital
appreciation or capital depreciation of fixed interest rate U.S.
government securities having maturities equal to the interest rate
adjustment dates of the variable rate U.S. government securities.
Stock Index Futures and Options
The Fund may utilize stock index futures contracts and options on
stocks, stock indices and stock index futures contracts for the
purposes of managing cash flows into and out of the Fund's
portfolio and potentially reducing transactional costs. The Fund
may not use stock index futures contracts and options for
speculative purposes.
As a means of reducing fluctuations in the net asset value of
shares of the Fund, the Fund may attempt to hedge all or a portion
of its portfolio through the purchase of listed put options on
stocks, stock indices, and stock index futures contracts. These
options will be used only as a form of forward pricing to protect
portfolio securities against decreases in value resulting from
market factors such as an anticipated increase in interest rates.
A put option gives the Fund, in return for a premium, the right to
sell the underlying security to the writer (seller) at a specified
price during the term of the option. Put options on stock indices
are similar to put options on stocks except for the delivery
requirements. Instead of giving the Fund the right to make
delivery of stock at a specified price, a put option on a stock
index gives the Fund, as holder, the right to receive an amount of
cash upon exercise of the option.
The Fund may also write covered call options. As the writer of a
call option, the Fund has the obligation upon exercise of the
option during the option period to deliver the underlying security
upon payment of the exercise price.
The Fund may only: (1) buy listed put options on stock indices and
stock index futures contracts; (2) buy listed put options on
securities held in its portfolio; and (3) sell listed call options
either on securities held in its portfolio or on securities which
it has the right to obtain without payment of further
consideration (or has segregated cash in the amount of any such
additional consideration). The Fund will maintain its positions in
securities, option rights, and segregated cash subject to puts and
calls until the options are exercised, closed, or expired.
The Fund may also enter into stock index futures contracts. A
stock index futures contract is a bilateral agreement which
obligates the seller to deliver (and the purchaser to take
delivery of) an amount of cash equal to a specific dollar amount
times the difference between the value of a specific stock index
at the close of trading of the contract and the price at which the
agreement is originally made. There is no physical delivery of the
stocks constituting the index, and no price is paid upon entering
into a futures contract. In general, contracts are closed out
prior to their expiration. The Fund, when purchasing or selling a
futures contract, will initially be required to deposit in a
segregated account in the broker's name with the Fund's custodian
an amount of cash or U.S. government securities approximately
equal to 5-10% of the contract value. This amount is known as
"initial margin", and it is subject to change by the exchange or
board of trade on which the contract is traded. Subsequent
payments to and from the broker are made on a daily basis as the
price of the index or the securities underlying the futures
contract fluctuates. These payments are known as "variation
margins", and the fluctuation in value of the long and short
positions in the futures contract is a process referred to as
"marking to market." The Fund may decide to close its position on
a contract at any time prior to the contract's expiration. This is
accomplished by the Fund taking an opposite position at the then
prevailing price, thereby terminating its existing position in the
contract. Because both the initial and variation margin resemble a
performance bond or good faith deposit on the contract, they are
returned to the Fund upon the termination of the contract,
assuming that all contractual obligations have been satisfied.
Therefore, the margin utilized in futures contracts is readily
distinguishable from the margin employed in security transactions,
since futures contracts margin does not involve the borrowing of
funds to finance the transaction.
When-Issued and Delayed Delivery Transactions
These transactions are made to secure what is considered to be an
advantageous price and yield for the Fund. Settlement dates may be a
month or more after entering into these transactions, and the market
values of the securities purchased may vary from the purchase prices.
No fees or other expenses, other than normal transaction costs, are
incurred. However, liquid assets of the Fund sufficient to make payment
for the securities to be purchased are segregated at the trade date.
These assets are marked to market daily and are maintained until the
transaction has been settled. The Fund does not intend to engage in
when-issued and delayed delivery transactions to an extent that would
cause the segregation of more than 20% of the total value of its
assets.
Lending of Portfolio Securities
The Fund may lend its portfolio securities up to one-third of the value
of its total assets to broker/dealers, banks, or other institutional
borrowers of securities. The Fund will only enter into loan arrangements
with broker/dealers, banks, or other institutions which the sub-manager
has determined are creditworthy under guidelines established by the
Trustees and will receive collateral equal to at least 100% of the value
of the securities loaned.
The collateral received when the Fund lends portfolio securities must be
valued daily and, should the market value of the loaned securities
increase, the borrower must furnish additional collateral to the Fund.
During the time portfolio securities are on loan, the borrower pays the
Fund any dividends or interest paid on such securities. Loans are
subject to termination at the option of the Fund or the borrower. The
Fund may pay reasonable administrative and custodial fees in connection
with a loan and may pay a negotiated portion of the interest earned on
the cash or equivalent collateral to the borrower or placing broker. The
Fund does not have the right to vote securities on loan, but would
terminate the loan and regain the right to vote if that were considered
important with respect to the investment.
Reverse Repurchase Agreements
The Fund may also enter into reverse repurchase agreements. A reverse
repurchase transaction is similar to borrowing cash. In a reverse
repurchase agreement the Fund transfers possession of a portfolio
instrument to another person, such as a financial institution, broker,
or dealer, in return for a percentage of the instrument's market value
in cash, and agrees that on a stipulated date in the future the Fund
will repurchase the portfolio instrument by remitting the original
consideration plus interest at an agreed upon rate. The use of reverse
repurchase agreements may enable the Fund to avoid selling portfolio
instruments at a time when a sale may be deemed to be disadvantageous,
but the ability to enter into reverse repurchase agreements does not
ensure that the Fund will be able to avoid selling portfolio instruments
at a disadvantageous time.
When effecting reverse repurchase agreements, liquid assets of the Fund,
in a dollar amount sufficient to make payment for the obligations to be
purchased, are segregated at the trade date. These assets are marked to
market daily and maintained until the transaction is settled.
Portfolio Turnover
The Fund will not attempt to set or meet a portfolio turnover rate since
any turnover would be incidental to transactions undertaken in an
attempt to achieve the Fund's investment objective. For the fiscal
years ended October 31, 1994, October 31, 1993, and October 31, 1992,
the portfolio turnover rate for the Fund was 2%, 13%, and 46%,
respectively.
Investment Limitations
Investing in Commodities
The Fund will not purchase or sell commodities. However, the Fund
may purchase put options on stock index futures, put options on
financial futures, and stock index futures contracts.
Selling Short and Buying on Margin
The Fund will not sell any securities short or purchase any
securities on margin, other than in connection with buying stock
index futures contracts, put options on stock index futures and
put options on financial futures, but may obtain such short-term
credits as are necessary for the clearance of transactions.
Lending Cash or Securities
The Fund will not lend any of its assets except portfolio
securities, the market value of which does not exceed one-third of
the total value of the Fund's assets. This shall not prevent the
purchase or holding of corporate or government bonds, debentures,
notes, certificates of indebtedness or other debt securities of an
issuer, repurchase agreements, or other transactions which are
permitted by the Fund's investment objective and policies or the
Declaration of Trust.
Underwriting
The Fund will not underwrite any issue of securities except as it
may be deemed to be an underwriter under the Securities Act of
1933 in connection with the sale of restricted securities which
the Fund may purchase pursuant to its investment objective,
policies, and limitations.
Investing in Issuers Whose Securities are Owned by Officers and
Trustees of the Trust
The Fund will not purchase or retain the securities of any issuer
in which the Officers and Trustees of the Trust or the Fund's
investment adviser own a substantial financial interest.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities, except as permitted by
its investment objective and policies, and except that the Fund
may enter into reverse repurchase agreements and otherwise borrow
up to one-third of the value of its total assets, including the
amount borrowed, as a temporary, extraordinary, or emergency
measure or to facilitate management of the portfolio by enabling
the Fund to meet redemption requests when the liquidation of
portfolio instruments would be inconvenient or disadvantageous.
The Fund will not purchase any securities while any borrowings in
excess of 5% of its total assets are outstanding. During the
period any reverse repurchase agreements are outstanding the Fund
will restrict the purchase of portfolio securities to money market
instruments maturing on or before the expiration date of the
reverse repurchase agreements, but only to the extent necessary to
assure the completion of the reverse repurchase agreements.
Diversification of Investments
The Fund will not invest more than 5% of the value of its total
assets in the securities of any one issuer, except U.S. government
securities, or invest in more than 10% of the voting securities of
one issuer.
Concentration of Investments
The Fund will not invest 25% or more of the value of its total
assets in securities of companies in any one industry. However,
investing in U.S. government obligations shall not be considered
investing in any one industry.
Investing in Real Estate
The Fund will not buy or sell real estate, although it may invest
in the marketable securities of companies whose business involves
the purchase or sale of real estate or in marketable securities
which are secured by real estate or interests in real estate.
Investing in Restricted Securities
The Fund will not invest in securities subject to restrictions on
resale under the federal securities laws, unless the securities
are determined by the Fund's manager to be liquid under criteria
established by the Trustees. The Fund will not invest more than 5%
of its total assets in restricted securities.
The above investment limitations cannot be changed without shareholder
approval. The following investment limitations, however, may be changed
by the Trustees without shareholder approval. Shareholders will be
notified before any material change in these policies becomes effective.
Writing Covered Call Options
The Fund will not write call options on securities unless the
securities are held in the Fund's portfolio or unless the Fund is
entitled to them in deliverable form without further payment or
after segregating cash in the amount of any further payment.
Investing in Put Options
The Fund will not purchase put options on securities, other than
put options on stock indices, unless the securities are held in
the Fund's portfolio and not more than 5% of the value of the
Fund's total assets would be invested in premiums on open put
option positions.
Investing in Minerals
The Fund will not purchase interests in oil, gas, or other mineral
exploration or development programs or leases, although it may
invest in the securities of issuers which invest in or sponsor
such programs.
Acquiring Securities
The Fund will not purchase securities of other investment
companies except to the extent permitted by the Investment Company
Act of 1940, or except as part of a merger, consolidation, or
other acquisition. It will not invest in securities for the
purpose of exercising control or management.
Investing in Illiquid Securities
The Fund will not invest more than 15% of its net assets in
securities which are illiquid, including certain restricted
securities and repurchase agreements providing for settlement more
than seven days after notice.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets
except to secure permitted borrowings. In those cases, it may
mortgage, pledge, or hypothecate assets having a market value not
exceeding the lesser of the dollar amounts borrowed or 10% of the
value of the total assets at the time of the borrowing.
Investing in Warrants
The Fund will not invest in warrants.
Except with respect to borrowing money, if a percentage limitation is
adhered to at the time of investment, a later increase or decrease in
percentage resulting from any change in value or net assets will not
result in a violation of such restriction.
The Fund did not borrow money or pledge securities in excess of 5% of
the value of its net assets during the past fiscal year and does not
expect to do so during the coming fiscal year.
For purposes of its policies and limitations, the Fund considers
certificates of deposit and demand and time deposits issued by a U.S.
branch of a domestic bank or savings and loan having capital, surplus,
and undivided profits in excess of $100,000,000 at the time of
investment to be "cash items".
Federated Index Trust Management
Officers and Trustees
Officers and Trustees are listed with their addresses, present
positions with Federated Index Trust, and principal occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp.; Chairman, Passport Research, Ltd.; Director, AEtna Life
and Casualty Company; Chief Executive Officer and Director, Trustee, or
Managing General Partner of the Funds. Mr. Donahue is the father of J.
Christopher Donahue , Vice President and Trustee of the Trust.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Trustee
President, Investment Properties Corporation; Senior Vice-President,
John R. Wood and Associates, Inc., Realtors; President, Northgate
Village Development Corporation; Partner or Trustee in private real
estate ventures in Southwest Florida; Director, Trustee, or Managing
General Partner of the Funds; formerly, President, Naples Property
Management, Inc.
William J. Copeland
One PNC Plaza - 23rd Floor
Pittsburgh, PA
Trustee
Director and Member of the Executive Committee, Michael Baker, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Vice Chairman and Director, PNC Bank, N.A., and PNC Bank Corp. and
Director, Ryan Homes, Inc.
J. Christopher Donahue *
Federated Investors Tower
Pittsburgh, PA
Vice President and Trustee
President and Trustee, Federated Investors, Federated Advisers,
Federated Management, and Federated Research; President and Director,
Federated Research Corp.; President, Passport Research, Ltd.; Trustee,
Federated Administrative Services, Federated Services Company, and
Federated Shareholder Services; President or Vice President of the
Funds; Director, Trustee, or Managing General Partner of some of the
Funds. Mr. Donahue is the son of John F. Donahue, Chairman and Trustee
of the Trust.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Director,
Blue Cross of Massachusetts, Inc.
Lawrence D. Ellis, M.D.
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Trustee
Hematologist, Oncologist, and Internist, Presbyterian and Montefiore
Hospitals; Professor of Medicine and Trustee, University of Pittsburgh;
Director of Corporate Health, University of Pittsburgh Medical Center;
Director, Trustee, or Managing General Partner of the Funds.
Edward L. Flaherty, Jr.@
Two Gateway Center
Suite 674
Pittsburgh, PA
Trustee
Attorney-at-law; Partner, Henny, Koehuba, Meyer & Flaherty; Director,
Eat'N Park Restaurants, Inc., and Statewide Settlement Agency, Inc.;
Director, Trustee, or Managing General Partner of the Funds; formerly,
Counsel, Horizon Financial, F.A., Western Region.
Peter E. Madden
225 Franklin Street
Boston, MA
Trustee
Consultant; State Representative, Commonwealth of Massachusetts;
Director, Trustee, or Managing General Partner of the Funds; formerly,
President, State Street Bank and Trust Company and State Street Boston
Corporation and Trustee, Lahey Clinic Foundation, Inc.
Gregor F. Meyer
Two Gateway Center
Suite 674
Pittsburgh, PA
Trustee
Attorney-at-law; Partner, Henny, Koehuba, Meyer & Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director,
Trustee, or Managing General Partner of the Funds; formerly, Vice
Chairman, Horizon Financial, F.A.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Trustee
Professor, Foreign Policy and Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer
Library Center, Inc., and U.S. Space Foundation; Chairman, Czecho Slovak
Management Center; Director, Trustee, or Managing General Partner of the
Funds; President Emeritus, University of Pittsburgh; formerly, Chairman,
National Advisory Council for Environmental Policy and Technology.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Trustee
Public relations/marketing consultant; Director, Trustee, or Managing
General Partner of the Funds.
Glen R. Johnson
Federated Investors Tower
Pittsburgh, PA
President
Trustee, Federated Investors; President and/or Trustee of some of the
Funds; staff member, Federated Securities Corp. and Federated
Administrative Services.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Vice President
Executive Vice President and Trustee, Federated Investors; Director,
Federated Research Corp.; Chairman and Director, Federated Securities
Corp.; President or Vice President of some of the Funds; Director or
Trustee of some of the Funds.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Vice President and Treasurer
Vice President, Treasurer, and Trustee, Federated Investors; Vice
President and Treasurer, Federated Advisers, Federated Management,
Federated Research, Federated Research Corp., and Passport Research,
Ltd.; Executive Vice President, Treasurer, and Director, Federated
Securities Corp.; Trustee, Federated Services Company and Federated
Shareholder Services; Chairman, Treasurer, and Trustee, Federated
Administrative Services; Trustee or Director of some of the Funds; Vice
President and Treasurer of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Vice President and Secretary
Vice President, Secretary, General Counsel, and Trustee, Federated
Investors; Vice President, Secretary, and Trustee, Federated Advisers,
Federated Management, and Federated Research; Vice President and
Secretary, Federated Research Corp. and Passport Research, Ltd.;
Trustee, Federated Services Company; Executive Vice President,
Secretary, and Trustee, Federated Administrative Services; Secretary and
Trustee, Federated Shareholder Services; Executive Vice President and
Director, Federated Securities Corp.; Vice President and Secretary of
the Funds.
* This Trustee is deemed to be an "interested person" as defined in
the Investment Company Act of 1940, as amended.
@ Member of the Executive Committee. The Executive Committee of
the Board of Trustees handles the responsibilities of the Board
of Trustees between meetings of the Board.
The Funds
"The Funds" and "Funds" mean the following investment companies:
American Leaders Fund, Inc.; Annuity Management Series; Arrow Funds;
Automated Cash Management Trust; Automated Government Money Trust;
California Municipal Cash Trust; Cash Trust Series II; Cash Trust
Series, Inc.; DG Investor Series; Edward D. Jones & Co. Daily Passport
Cash Trust; Federated ARMs Fund; Federated Exchange Fund, Ltd.;
Federated GNMA Trust; Federated Government Trust; Federated Growth
Trust; Federated High Yield Trust; Federated Income Securities Trust;
Federated Income Trust; Federated Institutional Trust; Federated
Intermediate Government Trust; Federated Master Trust; Federated
Municipal Trust; Federated Short-Intermediate Government Trust;
Federated Short-Term U.S. Government Trust; Federated Stock Trust;
Federated Tax-Free Trust; Federated U.S. Government Bond Fund; First
Priority Funds; Fixed Income Securities, Inc.; Fortress Adjustable Rate
U.S. Government Fund, Inc.; Fortress Municipal Income Fund, Inc.;
Fortress Utility Fund, Inc.; Fund for U.S. Government Securities, Inc.;
Government Income Securities, Inc.; High Yield Cash Trust; Insight
Institutional Series, Inc.; Insurance Management Series; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds,
Inc.; Investment Series Trust; Liberty Equity Income Fund, Inc.; Liberty
High Income Bond Fund, Inc.; Liberty Municipal Securities Fund, Inc.;
Liberty U.S. Government Money Market Trust; Liberty Term Trust, Inc. -
1999; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series
Trust; The Medalist Funds: Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Trust; Municipal Securities Income
Trust; New York Municipal Cash Trust; 111 Corcoran Funds; Peachtree
Funds; The Planters Funds; Portage Funds; RIMCO Monument Funds; The
Shawmut Funds; Short-Term Municipal Trust; Star Funds; The Starburst
Funds; The Starburst Funds II; Stock and Bond Fund, Inc.; Sunburst
Funds; Targeted Duration Trust; Tax-Free Instruments Trust; Trademark
Funds; Trust for Financial Institutions; Trust For Government Cash
Reserves; Trust for Short-Term U.S. Government Securities; Trust for
U.S. Treasury Obligations; World Investment Series, Inc.
Fund Ownership
Officers and Trustees own less than 1% of the Fund's outstanding shares.
As of December 12, 1994, the following shareholders of record owned
5% or more of the outstanding shares of the Fund: TMA Retirement Trust
owned approximately 91,583 Institutional Service Shares (12.4%); Union
Bank & Trust, Co. owned approximately 111,968 Institutional Service
Shares (15.2%); Signet Trust Company owned approximately 41,699
Institutional Service Shares (5.6%); Glenview State Bank owned
approximately 41,521 Institutional Service Shares (5.6%); Santa Barbara
Bank & Trust, owned approximately 262,941 Institutional Service Shares
(36%); Charles Schwab & Co, Inc. owned approximately 4,117,310
Institutional Shares (11%); University Bank & Trust Co. owned
approximately 2,031,586 Institutional Shares (5.4%); and Marshall &
Isley Trust owned approximately 4,427,974 Institutional shares
(11.9%).
Trustee Liability
The Trust's Declaration of Trust provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law. However, they
are not protected against any liability to which they would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence,
or reckless disregard of the duties involved in the conduct of their
office.
Management Services
Managers to the Fund
The Fund's manager is Federated Management. It is a subsidiary of
Federated Investors. All the voting securities of Federated Investors
are owned by a trust, the trustees of which are John F. Donahue, his
wife, and his son, J. Christopher Donahue.
The Fund's sub-manager is ANB Investment Management and Trust Company
("ANB"). It is a wholly-owned subsidiary of American National Bank and
Trust Company of Chicago. American National Bank and Trust Company of
Chicago is a wholly-owned subsidiary of American National Corporation,
which, in turn, is a wholly-owned subsidiary of First Chicago
Corporation. The sub-manager's directors are Alan F. Delp, Thomas P.
Michaels, David P. Bogler, Stephen P. Manus, Neil R. Wright, and P.
James Kartalia. The officers of ANB are Alan F. Delp, Chairman, Stephen
P. Manus, President, Neil R. Wright, Chief Investment Officer, and
Thomas P. Michaels, Secretary and Treasurer.
Neither the manager nor the sub-manager shall be liable to the Trust,
the Fund, or any shareholder of the Fund for any losses that may be
sustained in the purchase, holding, or sale of any security or for
anything done or omitted by the manager or sub-manager, except acts or
omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon either of them by their
respective management contracts.
Management Fees
For its management services, Federated Management receives an annual fee
as described in the prospectus. ANB receives an annual fee for its
services as described in the prospectus, which will be paid by the
manager, based on the Fund's average daily net assets.
For the fiscal years ended October 31, 1994, October 31, 1993, and
October 31, 1992, the manager earned $1,287,529, $1,062,278, and
$655,771, respectively, of which, $289,795, $321,440, and $400,391,
respectively, was voluntarily waived due to undertakings to limit the
Fund's expenses.
State Expense Limitations
The manager has undertaken to comply with the expense limitation
established by certain states for investment companies whose
shares are registered for sale in those states. If the Fund's
normal operating expenses (including the management fee, but not
including brokerage commissions, interest, taxes, and
extraordinary expenses) exceed 2-1/2% per year of the first $30
million of average net assets, 2% per year of the next $70 million
of average net assets, and 1-1/2% per year of the remaining
average net assets, the manager will reimburse the Fund for its
expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this
limitation, the management fee paid will be reduced by the amount
of the excess, subject to an annual adjustment. If the expense
limitation is exceeded, the amount to be reimbursed by the manager
will be limited, in any single fiscal year, by the amount of the
management fee.
This arrangement is not part of the management contract and may be
amended or rescinded in the future.
Other Related Services
Affiliates of the manager may, from time to time, provide certain
electronic equipment and software to institutional customers in order to
facilitate the purchase of shares of funds offered by Federated
Securities Corp.
Administrative Services
Federated Administrative Services, Inc., a subsidiary of Federated
Investors, provides administrative personnel and services to the Fund at
approximate cost through agreement with the Fund's manager.
Transfer Agent and Dividend Disbursing Agent
Federated Services Company serves as transfer agent and divident
disbursing agent for the Fund. The fee paid to the transfer agent is
based upon the size, type and number of accounts and transactions made
by shareholders.
Federated Services Company also maintains the Trust's accounting
records. The fee paid for this service is based upon the level of the
Fund's average net assets for the period plus out-of-pocket expenses.
Shareholder Services Plan (Institutional Shares)
This arrangement permits the payment of fees to Federated Shareholder
Services and, indirectly, to financial institutions to cause services to
be provided to shareholders by a representative who has knowledge of the
shareholder's particular circumstances and goals. These activities and
services may include, but are not limited to, providing office space,
equipment, telephone facilities, and various clerical, supervisory,
computer, and other personnel as necessary or beneficial to establish
and maintain shareholder accounts and records; processing purchase and
redemption transactions and automatic investments of client account cash
balances; answering routine client inquiries; and assisting clients in
changing dividend options, account designations, and addresses. For the
fiscal period ending October 31, 1994, payments in the amount of $10,144
were made pursuant to the Shareholder Services Plan.
Brokerage Transactions
The managers may select brokers and dealers who offer brokerage and
research services. These services may be furnished directly to the Fund
or to the managers and may include:
o advice as to the advisability of investing in securities;
o security analysis and reports;
o economic studies;
o industry studies;
o receipt of quotations for portfolio evaluations; and
o similar services.
The managers and their affiliates exercise reasonable business judgment
in selecting brokers who offer brokerage and research services to
execute securities transactions. They determine in good faith that
commissions charged by such persons are reasonable in relationship to
the value of the brokerage and
research services provided.
Research services provided by brokers and dealers may be used by the
managers or by affiliates of Federated Investors in advising Federated
Funds and other accounts. To the extent that receipt of these services
may supplant services for which the managers or their affiliates might
otherwise have paid, it would tend to reduce their expenses.
For the fiscal years ended October 31, 1994, October 31, 1993, and
October 31, 1992, the Fund paid $20,905, $16,910, and $3,238,
respectively, in commissions on brokerage transactions.
Purchasing Shares
Shares are sold at their net asset value without a sales charge on days
the New York Stock Exchange is open for business. The procedure for
purchasing Shares is explained in the respective prospectus under
"Investing in Institutional Shares" or "Investing in Institutional
Service Shares."
Distribution Plan (Institutional Service Shares)
With respect to the Institutional Service Shares class of the Fund, the
Fund has adopted a Plan pursuant to Rule 12b-1 which was promulgated by
the Securities and Exchange Commission pursuant to the Investment
Company Act of 1940. The Plan permits the payment of fees to
administrators (including broker/dealers and depository institutions
such as commerical banks and savings and loan associations) for
distribution and administrative services. The Plan is designed to
stimulate administrators to provide distribution and administrative
support services to the Fund and its shareholders. The administrative
services are provided by a representative who has knowledge of the
shareholder's particular circumstances and goals, and include, but are
not limited to: communicating account openings; communicating account
closings; entering purchase transactions; entering redemption
transactions; providing or arranging to provide account support for all
transactions; wiring funds and receiving funds for share purchases and
redemptions, confirming and reconciling all transactions; reviewing the
activity in Fund accounts or arranging for this service to be performed
by the Fund's transfer agent; and maintaining and distributing current
copies of prospectuses and shareholder reports to the beneficial
owners of Institutional Service Shares of the Fund and prospective
shareholders.
By adopting the Plan, the Trustees expect that the Fund will be able to
achieve a more predictable flow of cash for investment purposes and to
meet redemptions. This will facilitate more efficient portfolio
management and assist the Fund in seeking to achieve its investment
objective. By identifying potential investors whose needs are served by
the Fund's objective, and properly servicing these accounts, the Fund
may be able to curb sharp fluctuations in rates of redemption and sales.
Other benefits which the Fund hopes to achieve through the Plan include,
but are not limited to, the following:
(1) an efficient and effective administrative system; (2) a more
efficient use of shareholder assets by having them rapidly invested in
the Fund, through automatic transfer of funds from a demand deposit
account to an investment account, with a minimum of delay and
administrative detail; and (3) an efficient and reliable shareholder
records system and prompt responses to shareholder requests and
inquiries concerning their accounts.
Conversion to Federal Funds
It is the Fund's policy to be as fully invested as possible so that
maximum interest may be earned. State Street Bank acts as the
shareholder's agent in depositing checks and converting them to federal
funds.
Determining Net Asset Value
Net asset value generally changes each day. The days on which net asset
value for each class of Shares is calculated by the Fund are described
in the respective prospectus.
Determining Market Value of Securities
Market or appraised values of the Fund's portfolio securities are
determined as follows:
o for equity securities, according to the last sale price on a national
securities exchange, if available;
o in the absence of recorded sales for equity securities, according to
the mean between the last closing bid and asked prices;
o for bonds and other fixed income securities, at the last sale price on
a national securities exchange if available, otherwise as determined
by an independent pricing service;
o for short-term obligations, according to the mean between bid and
asked prices as furnished by an independent pricing service or for
short-term obligations with maturities of less than 60 days, at
amortized cost; or
o for all other securities, at fair value as determined in good faith by
the Trustees.
Prices provided by independent pricing services may be determined
without relying exclusively on quoted prices and may reflect:
institutional trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics, and other
market data.
The Fund will value stock index futures contracts, options on stock and
stock indices and put options on stock index futures and financial
futures at their market values established by the exchanges at the close
of option trading on such exchanges unless the Trustees determine in
good faith that another method of valuing option positions is necessary
to appraise their fair value.
Redeeming Shares
The Fund redeems Shares at the next computed net asset value after State
Street Bank receives the redemption request. Redemption procedures are
explained in the respective prospectus under "Redeeming Institutional
Shares" or "Redeeming Institutional Service Shares."
Redemption in Kind
Although the Fund intends to redeem Shares in cash, it reserves the
right under certain circumstances to pay the redemption price in whole
or in part by a distribution of securities from the Fund's portfolio.
Redemption in kind will be made in conformity with applicable Securities
and Exchange Commission rules, taking such securities at the same value
employed in determining net asset value and selecting the securities in
a manner the Trustees determine to be fair and equitable.
The Fund has elected to be governed by Rule 18f-1 of the Investment
Company Act of 1940 under which the Fund is obligated to redeem shares
for any one shareholder in cash only up to the lesser of $250,000 or 1%
of the Fund's net asset value during any 90-day period.
Tax Status
The Fund's Tax Status
The Fund will pay no federal income tax because the Fund expects to meet
the requirements of Subchapter M of the Internal Revenue Code applicable
to regulated investment companies and to receive the special tax
treatment afforded to such companies. To qualify for this treatment, the
Fund must, among other requirements:
o derive at least 90% of its gross income from dividends, interest, and
gains from the sale of securities;
o derive less than 30% of its gross income from the sale of securities
held less than three months;
o invest in securities within certain statutory limits; and
o distribute to its shareholders at least 90% of its net income earned
during the year.
Shareholders' Tax Status
Shareholders are subject to federal income tax on dividends received as
cash or additional shares. No portion of any income dividend paid by the
Fund is eligible for the dividends received deduction available to
corporations. These dividends, and any short-term capital gains, are
taxable as ordinary income.
Capital Gains
Capital gains experienced by the Fund could result in an increase in
dividends. Capital losses could result in a decrease in dividends. If
the Fund realizes net long-term capital gains, it will distribute them
at least once every 12 months.
Total Return
The Fund's average annual total return for Institutional Shares for
the one-year period ended October 31, 1994 and for the period from
July 2, 1990 (the effective date of the Fund's registration statement),
to October 31, 1994, was 3.59% and 9.85%, respectively.
The Fund's average annual total return for Institutional Service
Shares for the one-year period ended October 31, 1994 and for the period
from August 30, 1993 (date of initial public investment) to October 31,
1994 was 3.30% and 4.40%, respectively.
The average annual total return for each class of the Fund is the
average compounded rate of return for a given period that would equate a
$1,000 initial investment to the ending redeemable value of that
investment. The ending redeemable value is computed by multiplying the
number of shares owned at the end of the period by the offering price
per share at the end of the period. The number of shares owned at the
end of the period is based on the number of shares purchased at the
beginning of the period with $1,000, adjusted over the period by any
additional shares, assuming the quarterly reinvestment of all dividends
and distributions.
Yield
The SEC yields for Institutional Shares and for Institutional Service
Shares of the Fund for the thirty-day period ended October 31, 1994,
were 2.83% and 2.54%, respectively.
The yield for each class of shares of the Fund is determined by dividing
the net investment income per share (as defined by the Securities and
Exchange Commission) earned by the Fund over a thirty-day period by the
offering price per share of the Fund on the last day of the period. This
value is annualized using semi-annual compounding. This means that
the amount of income generated during the thirty-day period is assumed
to be generated each month over a twelve month period and is reinvested
every six months. The yield does not necessarily reflect income actually
earned by the Fund because of certain adjustments required by the
Securities and Exchange Commission and, therefore, may not correlate to
the dividends or other distributions paid to shareholders.
To the extent that financial institutions and broker/dealers charge fees
in connection with services provided in conjunction with an investment
in the Fund, performance will be reduced for those shareholders paying
those fees.
Performance Comparisons
The Fund's performance depends upon such variables as:
o portfolio quality;
o average portfolio maturity;
o type of instruments in which the portfolio is invested;
o changes in interest rates and market value of portfolio securities;
o changes in Fund expenses;
o the relative amount of Fund cash flow; and
o various other factors.
The performance of each class of Shares fluctuates on a daily basis
largely because net earnings and offering price per share fluctuate
daily. Both net earnings and offering price per share are factors in the
computation of yield and total return.
From time to time, the Fund may advertise its performance compared to
similar funds or portfolios using certain indices, reporting services,
and financial publications. Investors may use financial publications
and/or indices to obtain a more complete view of the Fund's performance.
When comparing performance, investors should consider all relevant
factors such as the composition of any index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to
value portfolio securities and compute offering price. The financial
publications and/or indices which the Fund uses in advertising may
include:
o Lipper Analytical Services, Inc., ranks funds in various fund
categories by making comparative calculations using total return.
Total return assumes the reinvestment of all capital gains
distributions and income dividends and takes into account any change
in offering price over a specific period of time. From time to time,
the Fund will quote its Lipper ranking in the "index funds" category
in advertising and sales literature.
o Dow Jones Industrial Average ("DJIA") represents share prices of
selected blue-chip industrial corporations as well as public utility
and transportation companies. The DJIA indicates daily changes in the
average price of stocks in any of its categories. It also reports
total sales for each group of industries. Because it represents the
top corporations of America, the DJIA's index movements are leading
economic indicators for the stock market as a whole.
o Standard & Poor's Daily Stock Price Index of 500 Common Stocks, a
composite index of common stocks in industry, transportation, and
financial and public utility companies can be used to compare to the
total returns of funds whose portfolios are invested primarily in
common stocks. In addition, the Standard & Poor's index assumes
reinvestments of all dividends paid by stocks listed on its index.
Taxes due on any of these distributions are not included, nor are
brokerage or other fees calculated in Standard & Poor's figures.
o Morningstar, Inc., an independent rating service, is the publisher of
the bi-weekly Mutual Fund Values. Mutual Fund Values rates more than
1,000 NASDAQ-listed mutual funds of all types, according to their risk-
adjusted returns. The maximum rating is five stars, and ratings are
effective for two weeks.
Advertisements and other sales literature for each class of shares may
quote total returns which are calculated on nonstandardized base
periods. These total returns also represent the historic change in the
value of an investment in either class of shares based on quarterly
reinvestment of dividends over a specified period of time.
Standard & Poor's Ratings Group
The Fund is not sponsored, endorsed, sold or promoted by, or
affiliated with, Standard & Poor's Ratings Group ("S&P"). S&P makes
no representation or warranty, express or implied, to the owners of the
Fund or any member of the public regarding the advisability of investing
in securities generally or in the Fund particularly or the ability of
the S&P 500 Index to track general stock market performance. S&P's only
relationship to Federated Securities Corp. (the "Licensee") is the
licensing of certain trademarks and trade names of S&P and of the S&P
500 Index which is determined, composed and calculated by S&P without
regard to the Licensee or the Fund. S&P has no obligation to take the
needs of the Licensee or the owners of the Fund into consideration in
determining, composing or calculating the S&P 500 Index. S&P is not
responsible for and has not participated in the determination of, the
timing of, prices at, or quantities of the Fund to be issued or in the
determination or calculation of the equation by which the Fund is to be
converted into cash. S&P has no obligation or liability in connection
with the administration, marketing or trading of the Fund.
S&P does not guarantee the accuracy and/or the completeness of the S&P
500 Index or any data included therein. S&P makes no warranty, express
or implied, as to results to be obtained by Licensee, owners of the
Fund, or any other person or entity from the use of the S&P 500 Index or
any data included therein in connection with the rights licensed
hereunder or for any other use. S&P makes no express or implied
warranties, and expressly disclaims all warranties of merchantability or
fitness for a particular purpose or use with respect to the S&P 500
Index or any data included therein. Without limiting any of the
foregoing, in no event shall S&P have any liability for any special,
punitive, indirect, or consequential damages (including lost profits),
even if notified of the possibility of such damages.
0032104B (12/94)
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
(A PORTFOLIO OF FEDERATED INDEX TRUST)
PROSPECTUS
Federated Index Trust (the "Trust") is an open-end, management investment
company (a mutual fund). Federated Mid-Cap Fund (the "Fund"), a portfolio of the
Trust, seeks to provide investment results generally corresponding to the
aggregate price and dividend performance of publicly traded common stocks that
comprise the Standard & Poor's 400 MidCap Index (the "Index"). The Fund is
neither sponsored by nor affiliated with Standard & Poor's Ratings Group.
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 BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Statement of Additional Information, dated December
31, 1994, with the Securities and Exchange Commission. The information contained
in the Statement of Additional Information is incorporated by reference into
this prospectus. You may request a copy of the Statement of Additional
Information free of charge by calling 1-800-235-4669. To obtain other
information or to make inquiries about the Fund, contact the Fund at the address
listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus dated December 31, 1994
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
SUMMARY OF FUND EXPENSES 1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS 2
- ------------------------------------------------------
GENERAL INFORMATION 3
- ------------------------------------------------------
INVESTMENT INFORMATION 3
- ------------------------------------------------------
Investment Objective 3
Investment Policies 3
Investment Risks 6
Investment Limitations 7
FEDERATED INDEX TRUST INFORMATION 7
- ------------------------------------------------------
Management of the Trust 7
Distribution of Fund Shares 9
Administration of the Fund 9
Brokerage Transactions 10
NET ASSET VALUE 10
- ------------------------------------------------------
INVESTING IN THE FUND 10
- ------------------------------------------------------
Share Purchases 10
Minimum Investment Required 11
What Shares Cost 11
Exchanging Securities for Fund Shares 11
Sub-Accounting Services 11
Certificates and Confirmations 12
Dividends 12
Capital Gains 12
REDEEMING SHARES 12
- ------------------------------------------------------
Telephone Redemption 12
Written Requests 13
Accounts with Low Balances 13
SHAREHOLDER INFORMATION 13
- ------------------------------------------------------
Voting Rights 13
Massachusetts Partnership Law 14
TAX INFORMATION 14
- ------------------------------------------------------
Federal Income Tax 14
PERFORMANCE INFORMATION 15
- ------------------------------------------------------
STANDARD & POOR'S RATINGS GROUP 16
- ------------------------------------------------------
FINANCIAL STATEMENTS 17
- ------------------------------------------------------
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS 42
- ------------------------------------------------------
ADDRESSES 43
- ------------------------------------------------------
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................................................. None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)................................................. None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable)............................... None
Redemption Fee (as a percentage of amount redeemed, if applicable).................... None
Exchange Fee.......................................................................... None
ANNUAL FUND OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver)(1)...................................................... 0.00%
12b-1 Fee............................................................................. None
Total Other Expenses.................................................................. 0.60%
Shareholder Services Fee(2)............................................. 0.06%
Total Fund Operating Expenses(3)............................................ 0.60%
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of the
management fee. The adviser can terminate this voluntary waiver at any time at
its sole discretion. The maximum management fee is 0.40%.
(2) The maximum shareholder services fee is 0.25%.
(3) The Total Fund Operating Expenses in the table above are based on expenses
expected during the fiscal year ending October 31, 1995. The Total Fund
Operating Expenses were 0.54% for the fiscal year ended October 31, 1994 and
would have been 1.13% absent the voluntary waiver of the management fee and the
voluntary reimbursement of certain other operating expenses.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of the Fund will bear, either
directly or indirectly. For more complete descriptions of the various costs and
expenses, see "Federated Index Trust Information." Wire transferred redemptions
of less than $5,000 may be subject to additional fees.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years 5 years 10 years
- -------------------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2)
redemption at the end of each time period............. $6 $19 $33 $75
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 42.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------
1994 1993 1992*
------ ------ ------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.57 $ 9.99 $10.00
- --------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------
Net investment income 0.21 0.25 0.08
- --------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and futures
contracts (0.07) 1.56 (0.086)
- -------------------------------------------------------------------------- ----- ----- -----
Total from investment operations 0.14 1.81 (0.006)
- --------------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.19) (0.23) (0.004)
- --------------------------------------------------------------------------
Distributions to shareholders from net realized gain on investments and
futures contracts (0.50) -- --
- -------------------------------------------------------------------------- ----- ----- ------
Total distributions (0.69) (0.23) (0.004)
- -------------------------------------------------------------------------- ----- ----- ------
NET ASSET VALUE, END OF PERIOD $11.02 $11.57 $ 9.99
- -------------------------------------------------------------------------- ----- ----- -----
TOTAL RETURN** 1.25% 17.33% 0.00%
- --------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------------
Expenses 0.54% 0.00% 0.00%(a)
- --------------------------------------------------------------------------
Net investment income 1.84% 2.33% 0.93%(a)
- --------------------------------------------------------------------------
Expense waiver/reimbursement(b) 0.59% 1.75% 0.40%(a)
- --------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------
Net assets, end of period (000 omitted) $44,012 $16,192 $3
- --------------------------------------------------------------------------
Portfolio turnover rate 30% 59% 0%
- --------------------------------------------------------------------------
</TABLE>
* For the period from September 3, 1992 (date of initial public investment) to
October 31, 1992.
** Based on net asset value, which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
Further information about the Fund's performance is contained in the Fund's
annual report for the fiscal year ended October 31, 1994, which can be obtained
free of charge.
(See Notes which are an integral part of the Financial Statements)
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated January 30, 1990. The Declaration of Trust permits the Trust to
offer separate series of shares of beneficial interest representing interests in
separate portfolios of securities. The shares in any one portfolio may be
offered in separate classes. On December 5, 1994, the Trustees changed the name
of the Fund from the Mid-Cap Fund to the Federated Mid-Cap Fund. This prospectus
relates only to the Fund. The Fund is designed primarily for institutions
investing on behalf of their customers. A minimum initial investment of $25,000
over a 90-day period is required.
Fund shares are currently sold and redeemed at net asset value without a sales
charge or redemption fee being imposed by the Fund. The Fund's net asset value
per share fluctuates.
INVESTMENT INFORMATION
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide investment results generally
corresponding to the aggregate price and dividend performance of the publicly
traded common stocks that comprise the mid-level stock capitalization sector of
the United States equity market. The investment objective of the Fund cannot be
changed without the approval of shareholders. While there is no assurance that
the Fund will achieve its investment objective, it endeavors to do so by
following the investment policies described in this prospectus.
INVESTMENT POLICIES
The investment policies described below may be changed by the Board of Trustees
("Trustees") without shareholder approval. Shareholders will be notified before
any material changes in these policies become effective.
The Fund pursues its investment objective by investing primarily in the 400
common stocks that comprise the Index. These 400 common stocks are issued by
medium-sized domestic companies whose market capitalizations generally range
from $200 million to $5 billion. The stocks are selected for inclusion in the
Index by Standard & Poor's Ratings Group ("S&P") on the basis of the issuer's
market size, liquidity and industry group representation. A particular stock's
weighting in the Index is based on its relative total market value, that is, the
stock's market price per share times the number of shares outstanding. From time
to time, S&P may add or delete stocks from the Index. The inclusion of a stock
in the Index in no way implies an opinion by S&P as to its attractiveness as an
investment, nor is S&P a sponsor or in any way affiliated with the Fund.
The Fund will not attempt to actively manage the Fund's portfolio. Rather, the
Fund will utilize a passive approach in pursuit of its investment objective,
meaning that the Fund will not employ the traditional management functions of
economic, financial and market analysis associated with actively managed funds.
Thus, unless an issuer's stock is removed from the Index by S&P, an issuer's
adverse financial circumstance will not cause its stock to be eliminated from
the Fund's portfolio.
In keeping with the passive management approach, the Fund will be managed using
a computer program to determine which securities are to be purchased or sold so
as to replicate the composition of the Index to the extent feasible. Stocks will
be included in the Fund's portfolio on the basis of each stock's weighting in
the Index, starting with the heaviest-weighted stock in the Index. As a result,
the proportion of Fund assets invested in a particular stock will be nearly
identical to the percentage of such stock represented in the Index. From time to
time, adjustments will be made in the Fund's portfolio so as to respond to
changes in the Index's composition, as well as corporate reorganizations and
other circumstances. The Fund will attempt to be fully invested in the common
stocks comprising the Index, and, in any event, at least 80% of the Fund's
assets will be invested in stocks represented in the Index. It is expected that
adjustments to the Fund's portfolio will occur infrequently and that
transactional costs and other expenses will be minimized. Because portfolio
turnover is expected to be well below that encountered in actively managed
investment company portfolios, the Fund anticipates that accompanying costs,
including accounting costs, brokerage fees, custodial expenses and transfer
taxes, will be relatively low. While the cash flows into and out of the Fund
will have an impact upon the Fund's portfolio turnover rate and its ability to
re plicate and track the performance of the Index, investment adjustments will
be made, as practicably as possible, to account for these circumstances.
The Fund believes that the indexing approach described above constitutes an
effective and reasonable method of substantially duplicating percentage changes
in the Index. While the Fund will not duplicate the Index's performance
precisely, it is anticipated that there will be a close correlation between the
Fund's performance and that of the Index in both rising and falling markets. The
Fund will attempt to achieve a correlation between the performance of its
portfolio and that of the Index of at least 95%, without taking into account
expenses of the Fund. A perfect correlation would be indicated by a figure of
100%, which would be achieved when the Fund's net asset value, including the
value of its dividends and capital gains distributions, increases or decreases
in exact proportion to changes in the Index. The Fund's ability to correlate its
performance with that of the Index may be affected by, among other things,
changes in the securities markets, the manner in which S&P calculates the Index
and the size and timing of cash flows into and out of the Fund. It is
anticipated that the Fund will achieve its intended correlation to the
performance of the Index when the Fund's net assets reach at least $10 million.
Until such time as the Fund's net assets equal $5 million, the Fund's portfolio
will be invested in cash and repurchase agreements. When the Fund's net assets
exceed $5 million, the Fund may begin to invest in the stocks comprising the
Index. Once the Fund's net assets equal at least $10 million, it is anticipated
that the Fund will be fully invested in stocks comprising the Index and will
achieve the 95% correlation to the performance of the Index.
In order to accommodate cash flows into and out of the Fund's portfolio, the
Fund may enter into stock index futures contracts, options and options on stock
index futures contracts. This will allow the Fund to simultaneously maximize the
level of the Fund assets used to track the movements of the Index. The Fund can
sell futures contracts and options in order to close out a previously
established position. The Fund will not enter into stock index futures
contracts, options and options on stock index futures contracts for speculative
purposes.
ACCEPTABLE INVESTMENTS. Under normal market circumstances, the Fund will invest
at least 80% of its assets in common stocks that are represented in the Index.
In addition, the Fund may hold cash
reserves which may, for other than defensive purposes, be invested in, but are
not limited to, the following:
U.S. GOVERNMENT SECURITIES. The Fund is permitted to invest in U.S.
government securities which are either issued or guaranteed by the U.S.
government, its agencies or instrumentalities. These securities include,
but are not limited to:
- direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds; and
- notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as Federal Home Loan Banks, the Federal National
Mortgage Association, the Federal Home Loan Mortgage Corporation, the
Federal Farm Credit System, and the Student Loan Marketing Association.
REPURCHASE AGREEMENTS. The U.S. government securities and other securities
in which the Fund invests may be purchased pursuant to repurchase
agreements. Repurchase agreements are arrangements pursuant to which banks,
broker/dealers and other recognized financial institutions sell U.S.
government securities or other securities to the Fund and agree at the time
of sale to repurchase them at a mutually agreed upon time and price. To the
extent that the original seller does not repurchase the securities from the
Fund, the Fund could receive less than the repurchase price on any sale of
such securities.
MONEY MARKET INSTRUMENTS. The Fund may also invest in:
- commercial paper; and
- instruments of domestic banks and savings and loans (such as certificates
of deposit and bankers' acceptances).
STOCK INDEX FUTURES AND OPTIONS. The Fund may utilize stock index futures
contracts, options and options on stock index futures contracts, subject to
the limitation that the value of these futures contracts and options will
not exceed 20% of the Fund's total assets. Also, the Fund will not purchase
options to the extent that more than 5% of the value of the Fund's total
assets would be invested in premiums on open put option positions. These
futures contracts and options will be used to handle cash flows into and
out of the Fund and to potentially reduce transactional costs, since
transactional costs associated with futures and options contracts can be
lower than costs stemming from direct investments in stocks.
There are several risks accompanying the utilization of futures contracts
to effectively anticipate market transactions. First, positions in futures
contracts may be closed only on an exchange or board of trade that
furnishes a secondary market for such contracts. While the Fund plans to
utilize futures contracts only if there exists an active market for such
contracts, there is no guarantee that a liquid market will exist for the
contracts at a specified time. Furthermore, because, by definition, futures
contracts look to projected price levels in the future and not to current
levels of valuation, market circumstances may result in there being a
discrepancy between the price of the stock index future and the movement in
the stock index. The absence of a perfect price correlation between the
futures contract and its underlying stock index could stem from investors
choosing to close futures contracts by offsetting transactions, rather than
satisfying additional margin requirements. This could result in a
distortion of the relationship between the index and futures market. In
addition,
because the futures market imposes less burdensome margin requirements than
the securities market, an increased amount of participation by speculators
in the futures market could result in price fluctuations.
In view of these considerations, the Fund will comply with the following
restrictions when purchasing and selling futures contracts. First, the Fund
will not participate in futures transactions if the sum of its initial
margin deposits on open contracts will exceed 5% of the market value of the
Fund's total assets, after taking into account the unrealized profits and
losses on those contracts into which it has entered. Second, the Fund will
not enter into these contracts for speculative purposes. Third, since the
Fund does not constitute a commodity pool, it will not market itself as
such, nor serve as a vehicle for trading in the commodities futures or
commodity options markets. In this regard, the Fund will disclose to all
prospective investors the limitations on its futures and options
transactions, and will make clear that these transactions are entered into
only for bona fide hedging purposes or such other purposes permitted under
regulations promulgated by the Commodity Futures Trading Commission
("CFTC"). Also, the Fund intends to claim an exclusion from registration as
a commodity pool operator under the regulations promulgated by the CFTC.
LENDING OF PORTFOLIO SECURITIES. The Fund may lend its portfolio securities on
a short-term basis or long-term basis up to one-third of the value of its total
assets to broker/dealers, banks, or other institutional borrowers of securities.
The Fund will only enter into loan arrangements with broker/ dealers, banks or
other institutions which the managers have determined are creditworthy under
guidelines established by the Trustees. The Fund will receive collateral in the
form of cash or U.S. government securities equal to at least 100% of the value
of the securities loaned.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may purchase short-term
U.S. government securities on a when-issued or delayed delivery basis. These
transactions are arrangements in which the Fund purchases securities with
payment and delivery scheduled for a future time. The seller's failure to
complete these transactions may cause the Fund to miss a price or yield
considered to be advantageous. Settlement dates may be a month or more after
entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices. Accordingly, the Fund may pay
more/less than the market value of the securities on the settlement date.
The Fund may dispose of a commitment prior to settlement if the managers deem it
appropriate to do so. In addition, the Fund may enter in transactions to sell
its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Fund may realize short-term profits or losses upon the sale of such
commitments.
INVESTMENT RISKS
As with other mutual funds that invest primarily in equity securities, the Fund
is subject to market risks. That is, the possibility exists that common stocks
will decline over short or even extended periods of time, and the United States
equity market tends to be cyclical, experiencing both periods when stock prices
generally increase and periods when stock prices generally decrease. However,
because the Fund invests primarily in medium capitalization stocks, there are
some additional risk factors associated with investments in the Fund. In
particular, stocks in the medium capitalization sector of the United States
equity market tend to be slightly more volatile in price than larger
capitalization stocks, such as those included in the Standard & Poor's 500
Composite Stock Price Index. This is because, among other
things, medium-sized companies have less certain growth prospects than larger
companies; have a lower degree of liquidity in the equity market; and tend to
have a greater sensitivity to changing economic conditions. Further, in addition
to exhibiting slightly higher volatility, the stocks of medium-sized companies
may, to some degree, fluctuate independently of the stocks of large companies.
That is, the stocks of medium-sized companies may decline in price as the price
of large company stocks rises or vice versa. Therefore, investors should expect
that the Fund will be more volatile than, and may fluctuate independently of,
broad stock market indices such as the Standard & Poor's 500 Composite Stock
Price Index.
INVESTMENT LIMITATIONS
The Fund will not:
- borrow money directly or through reverse repurchase agreements
(arrangements in which the Fund sells a money market instrument for at
least a percentage of its cash value with an agreement to buy it back on
a set date) except, under certain circumstances, the Fund may borrow up
to one-third of the value of its total assets and pledge up to 10% of the
value of those assets to secure such borrowings.
The above investment limitation cannot be changed without shareholder approval.
The following investment limitations, however, may be changed by the Trustees
without shareholder approval. Shareholders will be notified before any material
change in these policies becomes effective.
The Fund will not:
- invest more than 5% of its total assets in securities of issuers that
have records of less than three years of continuous operations; or
- invest more than 15% of its net assets in securities that are illiquid.
FEDERATED INDEX TRUST INFORMATION
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MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of Trustees. The Trustees
are responsible for managing the business affairs of the Trust and for
exercising all of the powers of the Trust except those reserved for the
shareholders. The Executive Committee of the Board of Trustees handles the
Trustees' responsibilities between meetings of the Trustees.
FUND'S MANAGER. Federated Management serves as the Fund's manager (the
"Manager"). The Trust has entered into a management contract (the "Management
Contract") with the Manager, which, in turn, has entered into a sub-management
contract (the "Sub-Management Contract") with ANB Investment Management and
Trust Company ("ANB" or the "Sub-Manager") (ANB and the Manager are collectively
referred to as "Managers"). It is the Manager's responsibility to select the
Sub-Manager, subject to the review and approval of the Trustees and to review
and evaluate the Sub-Manager's continued performance. The Manager is also
responsible for providing administrative services to the Fund.
Subject to the supervision and direction of the Trustees, the Manager provides
to the Fund investment management evaluation services principally by performing
initial due diligence on the Sub-Manager for the Fund and thereafter monitoring
and evaluating the performance of the Fund's Sub-Manager through quantitative
and qualitative analyses. In addition, the Manager conducts periodic in-person,
telephonic and written consultations with the Sub-Manager. In initially
evaluating the Sub-Manager, the Manager considered, among other factors, the
Sub-Manager's level of expertise; relative performance over a minimum period of
five years; level of efficiency; level of adherence to investment discipline or
philosophy; personnel, facilities and financial strength; and quality of service
and client communications. On an ongoing basis, the Manager is responsible for
communicating performance expectations and evaluations to the Sub-Manager;
monitoring tracking error; monitoring and analyzing the appropriate futures
contracts to purchase and the futures holdings of the Fund as a percentage of
Fund assets; monitoring market timing in the Fund; discussing with the
Sub-Manager which method of indexing to use; and ultimately recommending to the
Trustees whether the Sub-Management Contract should be renewed, modified or
terminated. The Manager provides written reports to the Trustees regarding the
results of its evaluation and monitoring functions. In addition, the Manager is
responsible for providing the Fund with administrative services, including, but
not limited to, shareholder servicing and certain legal and accounting services.
The Manager is also responsible for conducting all operations of the Fund,
except those operations contracted to the Sub-Manager, custodian, transfer agent
and dividend disbursing agent. As described below, the Manager receives an
annual fee from the Fund for performing its responsibilities under the
Management Contract.
MANAGEMENT FEES. The Fund's Manager receives an annual management fee
equal to 0.40 of 1% of the Fund's average daily net assets. Under the
Management Contract, which provides for the voluntary waiver of the
management fee by the Manager, the Manager will voluntarily waive some or
all of the management fee. The Manager can terminate this voluntary waiver
of some or all of its management fee at any time in its sole discretion.
The Manager has also undertaken to reimburse the Fund for operating
expenses in excess of limitations established by certain states. MANAGER'S
BACKGROUND. Federated Management, a Delaware business trust organized on
April 11, 1989, is a registered investment adviser under the Investment
Advisers Act of 1940. It is a subsidiary of Federated Investors. All of the
Class A (voting) shares of Federated Investors are owned by a trust, the
trustees of which are John F. Donahue, Chairman and Trustee of Federated
Investors, Mr. Donahue's wife, and Mr. Donahue's son, J. Christopher
Donahue, who is President and Trustee of Federated Investors. Federated
Management and other subsidiaries of Federated Investors serve as
investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through these same client institutions, individual shareholders also have
access to this same level of investment expertise.
SUB-MANAGER. Under the terms of the Sub-Management Contract between the Manager
and ANB, ANB serves as the Fund's Sub-Manager. The Sub-Manager will develop,
maintain and run the computer program designed to determine which securities
will be purchased and sold so as to replicate the composition of the Index to
the extent feasible, and, subject to the Manager's oversight, has complete
discretion to purchase and sell portfolio securities for the Fund within the
Fund's investment objective, restrictions and policies.
SUB-MANAGEMENT FEES. For its services under the Sub-Management Contract,
ANB receives an annual fee from the Manager of .035 of 1% of the Fund's
average daily net assets. This fee is paid by the Manager out of its
resources and is not an incremental Fund expense. No performance or
incentive fees are paid to the Sub-Manager.
SUB-MANAGER'S BACKGROUND. ANB, incorporated in the State of Illinois on
July 1, 1988, is a registered investment adviser under the Investment
Advisers Act of 1940. ANB is a wholly-owned subsidiary of American National
Bank and Trust Company of Chicago which, in turn, is an indirect
wholly-owned subsidiary of First Chicago Corporation. It serves as
investment adviser principally to corporate defined benefit and defined
contribution plans which have, as of September 30, 1994, placed
approximately $15.3 billion in assets with ANB. Since 1973, when American
National Bank and Trust Company of Chicago introduced its first commingled
equity index fund, ANB has developed and managed a family of equity and
bond index funds in which some 350 nationwide non-financial institution
clients invest. In total, ANB manages 50 commingled/common trust funds.
Also, since 1990, ANB has served as Sub-Manager for the Federated Max-Cap
Fund (formerly the S&P 500 Fund), which is another portfolio of the Trust.
ANB also serves as Sub-Manager for the Federated Mini-Cap Fund, another
portfolio of the Trust.
OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. In addition to periodic payments to
financial institutions under the Shareholder Services Plan, certain financial
institutions may be compensated by the Manager or its affiliates for the
continued investment of customers' assets in certain funds, including the Fund,
advised by those entities. These payments will be made directly by the
distributor or Manager from their assets, and will not be made from the assets
of the Fund or by the assessment of a sales charge on shares.
DISTRIBUTION OF FUND SHARES
Federated Securities Corp. is the principal distributor for shares of the Fund.
It is a Pennsylvania corporation organized on November 14, 1969, and is the
principal distributor for a number of investment companies. Federated Securities
Corp. is a subsidiary of Federated Investors. Federated Securities Corp. pays a
licensing fee to S&P for the right to use the Index in connection with the
management activities for the Fund. Federated Securities Corp. is not affiliated
with S&P.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services, Inc., a subsidiary
of Federated Investors, provides the Manager with the administrative personnel
and services necessary to provide shareholder servicing and certain legal and
accounting services.
SHAREHOLDER SERVICES PLAN. The Fund has adopted a Shareholder Services Plan
(the "Services Plan") under which it may make payments up to 0.25 of 1% of the
average daily net asset value of the
shares to obtain certain personal services for shareholders and the maintenance
of shareholder accounts ("shareholder services"). The Fund has entered into a
Shareholder Services Agreement with Federated Shareholder Services, a subsidiary
of Federated Investors, under which Federated Shareholder Services will either
perform shareholder services directly or will select financial institutions to
perform shareholder services. Financial institutions will receive fees based
upon shares owned by their clients or customers. The schedules of such fees and
the basis upon which such fees will be paid will be determined from time to time
by the Fund and Federated Shareholder Services.
CUSTODIAN. State Street Bank and Trust Company ("State Street Bank"), Boston,
Massachusetts, is custodian for the securities and cash of the Fund.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT. Federated Services Company,
Pittsburgh, Pennsylvania, is transfer agent for the shares of the Fund, and
dividend disbursing agent for the Fund.
LEGAL COUNSEL. Legal counsel is provided by Houston, Houston & Donnelly,
Pittsburgh, PA, and Dickstein, Shapiro & Morin, L.L.P., Washington, D.C.
INDEPENDENT AUDITORS. The independent auditors for the Fund are Ernst & Young
LLP, Pittsburgh, Pennsylvania.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Managers look for prompt execution of the order at a favorable
price. In working with dealers, the Managers will generally utilize those who
are recognized dealers in specific portfolio instruments, except when a better
price and execution of the order can be obtained elsewhere. In selecting among
firms believed to meet these criteria, the Managers may give consideration to
those firms which have sold or are selling shares of the Fund and other funds
distributed by Federated Securities Corp. The Managers make decisions on
portfolio transactions and select brokers and dealers, subject to review by the
Trustees.
NET ASSET VALUE
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The Fund's net asset value per share fluctuates. It is determined by dividing
the sum of the market value of all securities and other assets, less
liabilities, by the number of shares outstanding.
INVESTING IN THE FUND
- --------------------------------------------------------------------------------
SHARE PURCHASES
Fund shares are sold on days on which the New York Stock Exchange is open.
Shares of the Fund may be purchased either by wire or mail. To purchase shares
of the Fund, open an account by calling Federated Securities Corp. Information
needed to establish the account will be taken over the telephone. The Fund
reserves the right to reject any purchase request.
BY WIRE. To purchase shares of the Fund by Federal Reserve wire, call the Fund
to place an order. Shareholders have until 4:00 p.m. (Eastern time) to call the
Fund for settlement on the next business
day. The order is considered received immediately. Payment by federal funds must
be received before 4:00 p.m. (Eastern time) on the next business day following
the order. Federal funds should be wired as follows: State Street Bank and Trust
Company, Boston, Massachusetts; Attention: EDGEWIRE; For Credit to: Federated
Index Trust, Federated Mid-Cap Fund; Group Number or Order Number; Nominee or
Institution Name; ABA Number 011000028.
BY MAIL. To purchase shares of the Fund by mail, send a check made payable to
Federated Index Trust, Federated Mid-Cap Fund, to the Fund's transfer agent,
Federated Services Company, c/o State Street Bank and Trust Company, P.O. Box
8602, Boston, Massachusetts 02266-8602. Orders by mail are considered received
after payment by check is converted by State Street Bank into federal funds.
This is generally the next business day after State Street Bank receives the
check.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in the Fund is $25,000. However, an account may
be opened with a smaller amount as long as the $25,000 minimum is reached within
90 days. An investor's minimum investment will be calculated by combining all
accounts that the investor maintains with the Fund.
WHAT SHARES COST
Fund shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Fund.
The net asset value is determined at 4:00 p.m. (Eastern time), Monday through
Friday, except on: (i) days on which there are not sufficient changes in the
value of the Fund's portfolio securities that its net asset value might be
materially affected; (ii) days during which no shares are tendered for
redemption and no orders to purchase shares are received; and (iii) the
following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
EXCHANGING SECURITIES FOR FUND SHARES
Investors may exchange certain securities or a combination of certain securities
and cash for shares of the Fund. The securities and any cash must have a market
value of at least $25,000. The Trust reserves the right to determine the
acceptability of securities to be exchanged. On the day securities are accepted
by the Trust, they are valued in the same manner as the Trust values its assets.
Investors wishing to exchange securities should first contact Federated
Securities Corp.
Shares purchased by exchange of securities cannot be redeemed by telephone for
five business days to allow time for the transfer to settle.
SUB-ACCOUNTING SERVICES
Institutions are encouraged to open single master accounts. However, certain
institutions may wish to use the transfer agent's sub-accounting system to
minimize their internal recordkeeping requirements. The transfer agent charges a
fee based on the level of subaccounting services rendered. Institutions holding
Fund shares in a fiduciary, agency, custodial, or similar capacity may charge or
pass through sub-accounting fees as part of or in addition to normal trust or
agency account fees. They may also charge fees for other services provided which
may be related to the ownership of Fund shares.
Therefore, this prospectus should be read together with any agreement between
the customer and the institution with regard to the services provided, the fees
charged for those services and any restrictions and limitations imposed.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless requested
by contacting the Fund.
Detailed confirmations of each purchase or redemption are sent to each
shareholder. Quarterly confirmations are sent to report dividends paid during
the quarter.
DIVIDENDS
Dividends are declared and paid quarterly. Unless shareholders request cash
payments by writing to the Fund, dividends are automatically reinvested in
additional shares of the Fund on payment dates at the ex-dividend date net asset
value without a sales charge.
CAPITAL GAINS
Capital gains realized by the Fund, if any, will be distributed at least once
every 12 months.
REDEEMING SHARES
- --------------------------------------------------------------------------------
The Fund redeems shares at their net asset value next determined after the Fund
receives the redemption request. Redemptions will be made on days on which the
Fund computes its net asset value. Redemption requests must be received in
proper form and can be made by telephone request or written request.
TELEPHONE REDEMPTION
Shareholders may redeem their shares by telephoning the Fund before 4:00 p.m.
(Eastern time). The proceeds will normally be wired the following business day,
but in no event more than seven days, to the shareholder's account at a domestic
commercial bank that is a member of the Federal Reserve System. If at any time,
the Fund shall determine it necessary to terminate or modify this method of
redemption, shareholders will be promptly notified. An authorization form
permitting State Street Bank or the Fund to accept telephone requests must first
be completed. Authorization forms and information on this service are available
from Federated Securities Corp. Telephone redemption instructions may be
recorded.
In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption should be considered, such as by "Written Requests."
If reasonable procedures are not followed by the Fund, it may be liable for
losses due to unauthorized or fraudulent telephone instructions.
WRITTEN REQUESTS
Fund shares may also be redeemed by sending a written request to the Fund. Call
the Fund for specific instructions before redeeming by written request. The
shareholder will be asked to provide in the request his name, the Fund name, his
account number, and the share or dollar amount requested. If share certificates
have been issued, they must be properly endorsed and should be sent by
registered or certified mail with the written request.
SIGNATURES. Shareholders requesting a redemption of $50,000 or more, a
redemption of any amount to be sent to an address other than that on record with
the Fund, or a redemption payable other than to the shareholder of record must
have signatures on written redemption requests guaranteed by:
- a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund ("BIF"), which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
- a member firm of the New York, American, Boston, Midwest, or Pacific
Stock Exchange;
- a savings bank or savings and loan association whose deposits are insured
by the Savings Association Insurance Fund ("SAIF"), which is administered
by the FDIC; or
- any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Fund may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Fund and its transfer agent reserve the right
to amend these standards at any time without notice.
RECEIVING PAYMENT. Normally, a check for the proceeds is mailed within one
business day, but in no event more than seven days, after receipt of a proper
written redemption request.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000. This
requirement does not apply, however, if the balance falls below $25,000 because
of changes in the Fund's net asset value.
Before shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional shares to meet the minimum
requirement.
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of each portfolio
in the Trust have equal voting rights except that only shares of the Fund are
entitled to vote on matters affecting only the Fund. As a Massachusetts business
trust, the Trust is not required to hold annual shareholder meetings.
Shareholder approval will
be sought only for certain changes in the Trust's or the Fund's operations and
for the election of Trustees under certain circumstances.
Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders shall be called by the Trustees upon the
written request of shareholders owning at least 10% of the outstanding shares of
all series of the Trust.
MASSACHUSETTS PARTNERSHIP LAW
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for acts or obligations of the Trust on behalf
of the Fund. To protect shareholders of the Fund, the Trust has filed legal
documents with Massachusetts that expressly disclaim the liability of
shareholders of the Fund for such acts or obligations of the Trust. These
documents require notice of this disclaimer to be given in each agreement,
obligation, or instrument that the Trust enters into or its Trustees enter into
or sign on behalf of the Fund.
In the unlikely event a shareholder of the Fund is held personally liable for
the Trust's obligations on behalf of the Fund, the Trust is required to use the
property of the Fund to protect or compensate the shareholder. On request, the
Trust will defend any claim made and pay any judgment against a shareholder for
any act or obligation of the Trust on behalf of the Fund. Therefore, financial
loss resulting from liability as a shareholder of the Fund will occur only if
the Trust itself cannot meet its obligations to indemnify shareholders and pay
judgments against them from the assets of the Fund.
TAX INFORMATION
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX
The Fund will pay no federal income tax because it expects to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to receive the special tax treatment afforded to such companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios, if any, will not be combined for tax purposes with
those realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions, including capital gains distributions,
received. This applies whether dividends and distributions are received in cash
or as additional shares. Distributions representing long-term capital gains, if
any, will be taxable to shareholders as long-term capital gains no matter how
long the shareholders have held their shares.
PENNSYLVANIA CORPORATE AND PERSONAL PROPERTY TAXES. In the opinion of Houston,
Houston & Donnelly, counsel to the Trust:
- neither the Trust nor the Fund is subject to Pennsylvania corporate or
personal property taxes; and
- Fund shares may be subject to personal property taxes imposed by
counties, municipalities, and school districts in Pennsylvania to the
extent that the portfolio securities in the Fund would be subject to such
taxes if owned directly by residents of those jurisdictions.
Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time the Fund advertises its total return and yield.
Total return represents the change, over a specified period of time, in the
value of an investment in the Fund after reinvesting all income and capital gain
distributions. It is calculated by dividing that change by the initial
investment and is expressed as a percentage.
The yield of the Fund is calculated by dividing the net investment income per
share (as defined by the Securities and Exchange Commission) earned by the Fund
over a thirty-day period by the offering price per share of the Fund on the last
day of the period. This number is then annualized using semi-annual compounding.
The yield does not necessarily reflect income actually earned by the Fund and,
therefore, may not correlate to the dividends or other distributions paid to
shareholders .
The Fund is sold without any sales load or other similar non-recurring charges.
From time to time, the Fund may advertise its performance using certain
reporting services and/or compare its performance to certain indices.
STANDARD & POOR'S RATINGS GROUP
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"Standard & Poor's(TM)", "S&P," "S&P MidCap 400 Index," "Standard & Poor's
MidCap 400 Index," and "400" are trademarks of S&P and have been licensed for
use by Federated Securities Corp. (the "Licensee").
The Fund is not sponsored, endorsed, sold or promoted by, or affiliated with,
S&P, and S&P makes no representation or warranty, express or implied, to the
owners of the Fund or any member of the public regarding the advisability of
investing in securities generally or in the Fund particularly or the ability of
the S&P MidCap 400 Index to track general stock market performance. S&P's only
relationship to the Licensee is the licensing of certain trademarks and trade
names of S&P and of the S&P MidCap 400 Index which is determined, composed and
calculated by S&P without regard to the Licensee or the Fund. S&P has no
obligation to take the needs of the Licensee or the owners of the Fund into
consideration in determining, composing or calculating the S&P MidCap 400 Index.
S&P is not responsible for and has not participated in the determination of, the
timing of, prices at, or quantities of the Fund to be issued or in the
determination or calculation of the equation by which the Fund is to be
converted into cash. S&P has no obligation or liability in connection with the
administration, marketing or trading of the Fund.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P MIDCAP
400 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE FUND, OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF THE S&P MIDCAP 400 INDEX OR ANY DATA
INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED HEREUNDER OR FOR ANY
OTHER USE. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS
ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE
WITH RESPECT TO THE S&P MIDCAP 400 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY
SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS),
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--88.3%
- ------------------------------------------------------------------------------------
COMMERCIAL SERVICES--3.3%
------------------------------------------------------------------
700 Angelica Corp. $ 18,550
------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <C> <S> <C>
1,600 Banta Corp. 49,600
------------------------------------------------------------------
3,800 Cintas Corp. 134,900
------------------------------------------------------------------
1,300 Ennis Business Forms, Inc. 17,550
------------------------------------------------------------------
6,300 Equifax, Inc. 183,488
------------------------------------------------------------------
2,600 Flightsafety International, Inc. 104,975
------------------------------------------------------------------
3,075 Kelly Services, Inc., Class A 91,481
------------------------------------------------------------------
1,100 Lawson Products, Inc. 28,875
------------------------------------------------------------------
3,400 Olsten Corp. 121,975
------------------------------------------------------------------
2,700 Omnicom Group 143,775
------------------------------------------------------------------
2,400 Paychex, Inc. 90,000
------------------------------------------------------------------
3,500 Reynolds & Reynolds Co., Class A 87,062
------------------------------------------------------------------
2,900 Rollins, Inc. 67,787
------------------------------------------------------------------
5,500 Sensormatic Electronics Corp. 206,937
------------------------------------------------------------------
2,300 Standard Register 41,400
------------------------------------------------------------------
1,800 Wallace Computer, Inc. 49,950
------------------------------------------------------------------ -----------
Total 1,438,305
------------------------------------------------------------------ -----------
CONSUMER DURABLES--2.4%
------------------------------------------------------------------
2,800 Callaway Golf Co. 107,100
------------------------------------------------------------------
1,200 Carlisle Cos., Inc. 39,150
------------------------------------------------------------------
4,900 Clayton Homes, Inc. 88,812
------------------------------------------------------------------
1,400 Cross (A.T.) Co., Class A 21,175
------------------------------------------------------------------
1,800 First Brands Corp. 60,300
------------------------------------------------------------------
1,300 Gibson Greetings, Inc. 19,338
------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
CONSUMER DURABLES--CONTINUED
------------------------------------------------------------------
6,200 Harley Davidson, Inc. $ 173,600
------------------------------------------------------------------
10,500 International Game Technology 194,250
------------------------------------------------------------------
3,300 Leggett And Platt, Inc. 122,925
------------------------------------------------------------------
600 National Presto Industries, Inc. 23,625
------------------------------------------------------------------
11,800 Shaw Industries, Inc. 172,575
------------------------------------------------------------------
3,800 Topps Co. 22,325
------------------------------------------------------------------ -----------
Total 1,045,175
------------------------------------------------------------------ -----------
CONSUMER NON-DURABLES--3.8%
------------------------------------------------------------------
10,600 Coca Cola Enterprises, Inc. 206,700
------------------------------------------------------------------
3,300 Dean Foods Co. 95,287
------------------------------------------------------------------
1,100 Dibrell Brothers, Inc. 23,925
------------------------------------------------------------------
1,300 Dreyers Grand Ice Cream, Inc. 33,150
------------------------------------------------------------------
3,100 Flowers Industries, Inc. 56,575
------------------------------------------------------------------
6,200 Fruit of the Loom, Inc., Class A 177,475
------------------------------------------------------------------
3,900 IBP, Inc. 133,087
------------------------------------------------------------------
1,500 International Multifoods Corp. 27,000
------------------------------------------------------------------
2,500 Lance, Inc. 45,000
------------------------------------------------------------------
6,700 McCormick & Co., Inc. 132,325
------------------------------------------------------------------
1,600 Michael Foods 15,800
------------------------------------------------------------------
6,200 * Perrigo Co. 83,700
------------------------------------------------------------------
2,200 Phillips Van Heusen Corp. 31,625
------------------------------------------------------------------
2,100 Savannah Foods & Industries, Inc. 26,250
------------------------------------------------------------------
2,400 Smucker (J.M.), Class A 57,000
------------------------------------------------------------------
3,000 Tambrands, Inc. 123,000
------------------------------------------------------------------
12,100 Tyson Foods, Inc., Class A 281,325
------------------------------------------------------------------
2,900 Universal Corp. 65,250
------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--CONTINUED
------------------------------------------------------------------
2,100 Universal Foods Corp. $ 63,262
------------------------------------------------------------------ -----------
Total 1,677,736
------------------------------------------------------------------ -----------
CONSUMER SERVICES--4.6%
------------------------------------------------------------------
1,600 Belo (A.H.) Corp., Series A 87,600
------------------------------------------------------------------
3,400 Bob Evans Farms, Inc. 69,275
------------------------------------------------------------------
5,675 * Brinker International, Inc. 131,234
------------------------------------------------------------------
2,500 * Buffets, Inc. 25,937
------------------------------------------------------------------
2,000 * Caesars World, Inc. 87,750
------------------------------------------------------------------
2,345 * Chris Craft Industries, Inc. 88,524
------------------------------------------------------------------
7,000 * Circus Circus Enterprises, Inc. 155,750
------------------------------------------------------------------
4,850 Cracker Barrel Old Country Store 106,700
------------------------------------------------------------------
9,250 * CUC International, Inc. 297,156
------------------------------------------------------------------
1,200 Houghton Mifflin, Co. 55,200
------------------------------------------------------------------
2,000 * International Dairy Queen, Inc., Class A 34,000
------------------------------------------------------------------
1,900 Lee Enterprises Inc. 63,888
------------------------------------------------------------------
2,100 Media General, Inc., Class A 59,587
------------------------------------------------------------------
7,400 * Mirage Resorts, Inc. 153,550
------------------------------------------------------------------
2,850 Morrison Restaurants, Inc. 83,362
------------------------------------------------------------------
3,100 * Multi Media, Inc. 91,837
------------------------------------------------------------------
2,000 * NPC International, Inc., Class A 13,500
------------------------------------------------------------------
1,700 Sbarro, Inc. 42,287
------------------------------------------------------------------
2,400 Sizzler International, Inc. 14,400
------------------------------------------------------------------
4,600 Sothebys Holdings, Inc. 55,775
------------------------------------------------------------------
2,000 TCA Cable TV, Inc. 47,000
------------------------------------------------------------------
1,000 Washington Post Co., Class B 245,000
------------------------------------------------------------------
1,700 * Western Publishing Group, Inc. 21,675
------------------------------------------------------------------ -----------
Total 2,030,987
------------------------------------------------------------------ -----------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--9.2%
------------------------------------------------------------------
2,300 * ADC Telecommunications, Inc. $ 108,387
------------------------------------------------------------------
1,700 * Altera Corp. 67,044
------------------------------------------------------------------
4,100 * Analog Devices, Inc. 146,575
------------------------------------------------------------------
6,800 * Applied Materials, Inc. 353,600
------------------------------------------------------------------
2,600 * AST Research, Inc. 32,906
------------------------------------------------------------------
3,700 * Atmel Corp. 136,438
------------------------------------------------------------------
2,400 Beckman Instruments, Inc. 70,500
------------------------------------------------------------------
5,800 * Cabletron Systems, Inc. 291,450
------------------------------------------------------------------
2,300 * Cirrus Logic, Inc. 66,125
------------------------------------------------------------------
4,200 * Conner Peripherals, Inc. 48,300
------------------------------------------------------------------
2,100 * Convex Computer Corp. 17,325
------------------------------------------------------------------
3,100 * Cypress Semiconductor Corp. 64,713
------------------------------------------------------------------
3,100 * Dell Computer Corp. 137,950
------------------------------------------------------------------
15,500 * EMC Corp. Mass 333,250
------------------------------------------------------------------
1,700 * Exabyte Corp. 37,400
------------------------------------------------------------------
2,600 GenCorp, Inc. 31,200
------------------------------------------------------------------
3,000 Linear Technology Corp. 144,000
------------------------------------------------------------------
4,200 * LSI Logic Corp. 178,500
------------------------------------------------------------------
1,500 Measurex Corp. 32,437
------------------------------------------------------------------
4,000 * Mentor Graphics Corp. 53,500
------------------------------------------------------------------
5,200 Molex, Inc. 231,400
------------------------------------------------------------------
2,400 * Network System Corp. 16,650
------------------------------------------------------------------
2,000 * Octel Communications Corp. 43,250
------------------------------------------------------------------
1,700 OEA, Inc. 41,862
------------------------------------------------------------------
3,700 * Quantum Corp. 56,888
------------------------------------------------------------------
1,500 * Rohr, Inc. 13,687
------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
------------------------------------------------------------------
5,900 * Seagate Technology $ 149,712
------------------------------------------------------------------
800 * Sequa Corp., Class A 19,600
------------------------------------------------------------------
2,500 * Sequent Computer System, Inc. 47,500
------------------------------------------------------------------
11,400 * Silicon Graphics, Inc. 346,275
------------------------------------------------------------------
3,600 * Storage Technology Corp. 99,900
------------------------------------------------------------------
2,000 * Stratus Computer, Inc. 74,500
------------------------------------------------------------------
2,700 Sundstrand Corp. 122,850
------------------------------------------------------------------
2,000 * Symbol Technologies, Inc. 67,500
------------------------------------------------------------------
2,900 * Teradyne, Inc. 95,337
------------------------------------------------------------------
1,500 Thiokol Corp. 36,937
------------------------------------------------------------------
2,800 Varian Association, Inc. 103,600
------------------------------------------------------------------
1,900 * Verifone, Inc. 42,750
------------------------------------------------------------------
1,900 * Xilinx, Inc. 110,437
------------------------------------------------------------------ -----------
Total 4,072,235
------------------------------------------------------------------ -----------
ENERGY MINERALS--3.1%
------------------------------------------------------------------
4,800 Anadarko Petroleum Corp. 234,600
------------------------------------------------------------------
5,000 Apache Corp. 140,625
------------------------------------------------------------------
2,400 Diamond Shamrock, Inc. 69,600
------------------------------------------------------------------
6,500 Lyondell Petrochemical Co. 177,937
------------------------------------------------------------------
2,500 Mapco, Inc. 136,562
------------------------------------------------------------------
3,700 Murphy Oil Corp. 176,212
------------------------------------------------------------------
4,100 Noble Affiliates, Inc. 123,000
------------------------------------------------------------------
2,500 Parker & Parsley Petroleum Co. 62,500
------------------------------------------------------------------
2,600 Quaker State Corp. 35,425
------------------------------------------------------------------
8,100 Ranger Oil Ltd. 52,650
------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
ENERGY MINERALS--CONTINUED
------------------------------------------------------------------
2,600 Tosco Corp. $ 82,550
------------------------------------------------------------------
3,500 Valero Energy Corp. 75,687
------------------------------------------------------------------ -----------
Total 1,367,348
------------------------------------------------------------------ -----------
FINANCE--14.1%
------------------------------------------------------------------
8,450 Aflac, Inc. 288,356
------------------------------------------------------------------
8,250 Aon Corp. 256,781
------------------------------------------------------------------
3,450 Bancorp Hawaii, Inc. 95,306
------------------------------------------------------------------
15,400 Bank New York, Inc. 488,950
------------------------------------------------------------------
9,405 Bear Stearns Cos., Inc. 152,831
------------------------------------------------------------------
3,150 Central Fidelity Banks, Inc. 90,956
------------------------------------------------------------------
3,700 City National Corp. 40,700
------------------------------------------------------------------
3,100 Comdisco, Inc. 62,000
------------------------------------------------------------------
9,700 Comerica, Inc. 267,963
------------------------------------------------------------------
3,100 Crestar Financial Corp. 127,875
------------------------------------------------------------------
2,600 Dauphin Deposit Corp. 59,800
------------------------------------------------------------------
4,925 Edwards (AG), Inc. 91,113
------------------------------------------------------------------
5,100 Fifth Third Bancorp 266,475
------------------------------------------------------------------
4,900 First America Bank Corp. 165,988
------------------------------------------------------------------
9,500 First Bank System, Inc. 353,875
------------------------------------------------------------------
4,000 First Security Corp. 105,000
------------------------------------------------------------------
2,600 First Tennessee National Corp. 122,200
------------------------------------------------------------------
2,600 First Virginia Bank, Inc. 94,900
------------------------------------------------------------------
6,700 Franklin Resources, Inc. 273,863
------------------------------------------------------------------
1,600 GATX Corp. 67,400
------------------------------------------------------------------
1,700 Hartford Steam Boiler Insurance 72,463
------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FINANCE--CONTINUED
------------------------------------------------------------------
2,700 Kemper Corp. $ 141,075
------------------------------------------------------------------
8,000 Marshall and Ilsley Corp. 164,500
------------------------------------------------------------------
3,550 Mercantile Bancorporation, Inc. 123,363
------------------------------------------------------------------
3,800 Mercantile Bankshares Corp. 79,800
------------------------------------------------------------------
4,700 Meridian Bancorp, Inc. 136,006
------------------------------------------------------------------
6,400 Morgan Stanley & Co., Inc. 418,400
------------------------------------------------------------------
4,400 Northern Trust Corp. 159,775
------------------------------------------------------------------
1,400 PHH Corp. 52,500
------------------------------------------------------------------
1,700 * Policy Management System Corp. 79,900
------------------------------------------------------------------
5,900 Progressive Corp. Ohio 224,200
------------------------------------------------------------------
3,700 Provident Life & Accidental, Inc., Class B 92,963
------------------------------------------------------------------
3,330 Regions Financial Corp. 105,519
------------------------------------------------------------------
4,650 Schwab (Charles) Corp. 165,075
------------------------------------------------------------------
6,500 SouthTrust Corp. 124,719
------------------------------------------------------------------
6,300 State Street Boston Corp. 210,263
------------------------------------------------------------------
1,900 Transatlantic Holdings, Inc. 96,663
------------------------------------------------------------------
4,500 UJB Financial Corp. 121,500
------------------------------------------------------------------
2,900 West One Bancorp. 79,750
------------------------------------------------------------------
3,000 Wilmington Trust Corp. 75,000
------------------------------------------------------------------ -----------
Total 6,195,766
------------------------------------------------------------------ -----------
HEALTH SERVICES--2.4%
------------------------------------------------------------------
2,300 * Applied Bioscience International, Inc. 12,650
------------------------------------------------------------------
3,000 Bergen Brunswig Corp., Class A 49,500
------------------------------------------------------------------
3,475 Cardinal Health, Inc. 162,456
------------------------------------------------------------------
3,100 * Continental Medical Systems, Inc. 22,088
------------------------------------------------------------------
3,127 * Coram Healthcare Corp. 51,595
------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
HEALTH SERVICES--CONTINUED
------------------------------------------------------------------
2,700 * FHP International Corp. $ 78,300
------------------------------------------------------------------
2,800 * HealthCare COMPARE Corp. 78,050
------------------------------------------------------------------
2,400 * HEALTHSOUTH Rehabilitation 91,200
------------------------------------------------------------------
6,900 National Health Laboratories 99,187
------------------------------------------------------------------
5,200 * Novacare, Inc. 52,000
------------------------------------------------------------------
2,200 * PacifiCare Health System, Inc., Class A 163,900
------------------------------------------------------------------
3,200 Surgical Care Affiliates, Inc. 62,800
------------------------------------------------------------------
3,100 * Value Health, Inc. 120,125
------------------------------------------------------------------ -----------
Total 1,043,851
------------------------------------------------------------------ -----------
HEALTH TECHNOLOGY--3.3%
------------------------------------------------------------------
2,300 * Acuson Corp. 42,263
------------------------------------------------------------------
1,100 * Advanced Technology Laboratories, Inc. 17,600
------------------------------------------------------------------
2,700 * Biogen, Inc. 132,300
------------------------------------------------------------------
3,800 Carter Wallace, Inc. 53,200
------------------------------------------------------------------
4,200 * Centocor, Inc. 74,287
------------------------------------------------------------------
2,700 * Chiron Corp. 181,913
------------------------------------------------------------------
1,300 * Cordis Corp. 74,913
------------------------------------------------------------------
1,300 * Datascope Corp. 22,750
------------------------------------------------------------------
1,100 Diagnostic Products Corp. 26,400
------------------------------------------------------------------
3,600 * Forest Laboratories, Inc., Class A 165,600
------------------------------------------------------------------
2,000 * Genzyme Corp. 65,500
------------------------------------------------------------------
7,100 Ivax Corp. 135,787
------------------------------------------------------------------
6,500 Mylan Laboratories, Inc. 182,000
------------------------------------------------------------------
1,400 * Nellcor, Inc. 43,400
------------------------------------------------------------------
1,000 Puritan Bennett Corp. 26,125
------------------------------------------------------------------
1,200 * SCI-Medical Life System, Inc. 57,300
------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
HEALTH TECHNOLOGY--CONTINUED
------------------------------------------------------------------
4,000 Stryker Corp. $ 137,000
------------------------------------------------------------------
2,100 * Synergen, Inc. 11,550
------------------------------------------------------------------
1,800 * XOMA Corp. 5,400
------------------------------------------------------------------ -----------
Total 1,455,288
------------------------------------------------------------------ -----------
INDUSTRIAL SERVICES--1.7%
------------------------------------------------------------------
6,059 * AES Corp. 119,665
------------------------------------------------------------------
2,600 * Air and Water Technology Corp., Class A 18,200
------------------------------------------------------------------
2,400 * American Waste Services, Inc., Class A 4,200
------------------------------------------------------------------
1,300 * BJ Services Corp. 26,488
------------------------------------------------------------------
3,100 CBI Industries, Inc. 71,688
------------------------------------------------------------------
2,300 * Enterra Corp. 52,613
------------------------------------------------------------------
13,400 * Global Marine, Inc. 63,650
------------------------------------------------------------------
1,000 Granite Construction, Inc. 21,875
------------------------------------------------------------------
2,900 * International Technology Corp. 11,237
------------------------------------------------------------------
2,000 * Jacobs Engineering Group, Inc. 42,750
------------------------------------------------------------------
22,700 Laidlaw, Inc., Class B 178,763
------------------------------------------------------------------
2,000 * Mid-American Waste Systems, Inc. 11,000
------------------------------------------------------------------
5,800 * Nabors Industries, Inc. 42,775
------------------------------------------------------------------
4,500 * Parker Drilling Co. 27,563
------------------------------------------------------------------
3,200 * Smith International, Inc. 53,600
------------------------------------------------------------------
2,700 * Varco International, Inc. 18,900
------------------------------------------------------------------ -----------
Total 764,967
------------------------------------------------------------------ -----------
MISCELLANEOUS--0.2%
------------------------------------------------------------------
2,000 * Magma Power Co. 74,750
------------------------------------------------------------------ -----------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
NON-ENERGY MINERALS--1.4%
------------------------------------------------------------------
5,800 Allegheny Ludlum Corp. $ 115,275
------------------------------------------------------------------
3,600 * Alumax, Inc. 107,100
------------------------------------------------------------------
6,600 Battle Mountain Gold Co. 73,425
------------------------------------------------------------------
1,300 Brush Wellman, Inc. 21,775
------------------------------------------------------------------
1,900 CalMat Co. 39,425
------------------------------------------------------------------
700 Carpenter Technology Corp. 39,550
------------------------------------------------------------------
1,000 Cleveland Cliffs, Inc. 38,125
------------------------------------------------------------------
1,200 Lukens, Inc. 37,950
------------------------------------------------------------------
700 * Maxxam, Inc. 23,537
------------------------------------------------------------------
1,600 Oregon Steel Mills 27,400
------------------------------------------------------------------
2,400 Rayonier, Inc. 70,800
------------------------------------------------------------------
1,400 * Southdown, Inc. 24,325
------------------------------------------------------------------ -----------
Total 618,687
------------------------------------------------------------------ -----------
PROCESS INDUSTRIES--7.5%
------------------------------------------------------------------
2,500 Albany International Corp., Class A 49,375
------------------------------------------------------------------
4,800 Albemarle Corp. 73,200
------------------------------------------------------------------
2,300 Betz Laboratories, Inc. 114,713
------------------------------------------------------------------
3,000 Bowater, Inc. 81,000
------------------------------------------------------------------
3,100 Cabot Corp. 88,350
------------------------------------------------------------------
3,300 Calgon Carbon Corp. 37,125
------------------------------------------------------------------
1,900 Chesapeake Corp. 58,900
------------------------------------------------------------------
1,600 Church and Dwight, Inc. 36,000
------------------------------------------------------------------
3,600 Consolidated Papers, Inc. 161,550
------------------------------------------------------------------
4,200 Crompton and Knowles Corp. 59,325
------------------------------------------------------------------
2,000 Dexter Corp. 41,250
------------------------------------------------------------------
4,900 Dole Food, Inc. 131,688
------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
PROCESS INDUSTRIES--CONTINUED
------------------------------------------------------------------
2,200 Donaldson, Inc. $ 50,600
------------------------------------------------------------------
9,700 Ethyl Corp. 110,338
------------------------------------------------------------------
2,400 Ferro Corp. 61,500
------------------------------------------------------------------
11,300 Freeport McMoRan, Inc. 207,638
------------------------------------------------------------------
1,100 Fuller (H.B.) Co. 36,575
------------------------------------------------------------------
3,400 * Georgia Gulf Corp. 131,750
------------------------------------------------------------------
3,600 Glatfelter, (P.H.) Co. 57,150
------------------------------------------------------------------
2,900 Hanna M.A. Co. 74,312
------------------------------------------------------------------
2,400 IMC Fertilizer Group, Inc. 102,000
------------------------------------------------------------------
3,700 Lawter International, Inc. 46,713
------------------------------------------------------------------
2,900 Loctite Corp. 129,413
------------------------------------------------------------------
4,200 Longview Fibre Co. 70,350
------------------------------------------------------------------
5,400 Lubrizol Corp. 174,150
------------------------------------------------------------------
700 NCH, Corp. 46,637
------------------------------------------------------------------
4,600 RPM, Inc. 86,250
------------------------------------------------------------------
3,025 Schulman (A.), Inc. 86,212
------------------------------------------------------------------
1,600 * Sealed Air Corp. 54,600
------------------------------------------------------------------
7,100 Sonoco Products Corp. 156,200
------------------------------------------------------------------
4,600 * Sterling Chemicals, Inc. 55,775
------------------------------------------------------------------
5,800 Unifi, Inc. 150,075
------------------------------------------------------------------
2,177 Wausau Paper Mills Co. 50,071
------------------------------------------------------------------
2,700 Wellman, Inc. 88,762
------------------------------------------------------------------
4,500 Willamette Industries, Inc. 209,250
------------------------------------------------------------------
4,600 Witco Corp. 128,800
------------------------------------------------------------------ -----------
Total 3,297,597
------------------------------------------------------------------ -----------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
PRODUCER MANUFACTURING--6.2%
------------------------------------------------------------------
7,500 * American Power Conversion Corp. $ 138,750
------------------------------------------------------------------
3,800 American Premier Underwriters 95,000
------------------------------------------------------------------
3,000 Ametek, Inc. 54,375
------------------------------------------------------------------
1,800 Arvin Industries, Inc. 43,875
------------------------------------------------------------------
2,300 Danaher Corp. 112,988
------------------------------------------------------------------
2,475 Diebold, Inc. 104,569
------------------------------------------------------------------
1,600 Duriron, Inc. 28,800
------------------------------------------------------------------
3,700 Federal Signal Corp. 71,225
------------------------------------------------------------------
2,900 Federal-Mogul Corp. 65,975
------------------------------------------------------------------
1,700 Goulds Pumps, Inc. 37,188
------------------------------------------------------------------
2,100 Harsco Corp. 90,825
------------------------------------------------------------------
2,600 HON Industries, Inc. 68,900
------------------------------------------------------------------
2,600 Hubbell, Inc., Class B 150,475
------------------------------------------------------------------
1,400 Kaydon Corp. 32,725
------------------------------------------------------------------
2,200 Kennametal, Inc. 61,875
------------------------------------------------------------------
2,900 Keystone International, Inc. 57,275
------------------------------------------------------------------
2,433 Lancaster Colony Corp. 84,547
------------------------------------------------------------------
3,800 * Litton Industries, Inc. 139,650
------------------------------------------------------------------
2,000 * Magnetek, Inc. 29,750
------------------------------------------------------------------
3,526 Mark IV Industries, Inc. 74,927
------------------------------------------------------------------
2,000 Miller Herman, Inc. 53,000
------------------------------------------------------------------
2,400 Modine Manufacturing Co. 70,200
------------------------------------------------------------------
1,500 Nordson Corp. 84,000
------------------------------------------------------------------
1,800 Olin Corp. 98,775
------------------------------------------------------------------
1,500 Pentair, Inc. 63,000
------------------------------------------------------------------
1,650 Precision Castparts Corp. 37,744
------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
------------------------------------------------------------------
2,700 Stewart & Stevenson Services $ 103,950
------------------------------------------------------------------
2,400 Superior Industrial Intl Inc. 70,800
------------------------------------------------------------------
1,800 Tecumseh Products Co, Class A 87,300
------------------------------------------------------------------
1,400 Teleflex, Inc. 54,250
------------------------------------------------------------------
4,000 * Thermo Electron Corp. 182,500
------------------------------------------------------------------
3,250 Trinity Industries, Inc. 111,313
------------------------------------------------------------------
2,400 Watts Industries, Inc., Class A 57,600
------------------------------------------------------------------
3,000 York International Corp. 117,000
------------------------------------------------------------------ -----------
Total 2,735,126
------------------------------------------------------------------ -----------
RETAIL TRADE--4.1%
------------------------------------------------------------------
1,700 Claire's Stores, Inc. 19,763
------------------------------------------------------------------
4,150 CML Group, Inc. 40,981
------------------------------------------------------------------
1,200 CPI Corp. 26,100
------------------------------------------------------------------
2,000 * Diagnostek, Inc. 31,500
------------------------------------------------------------------
4,303 Dollar General Corp. 124,787
------------------------------------------------------------------
2,200 Duty Free International, Inc. 29,425
------------------------------------------------------------------
1,800 Edison Brothers Stores, Inc. 42,750
------------------------------------------------------------------
4,600 Family Dollar Stores, Inc. 53,475
------------------------------------------------------------------
3,800 Fingerhut Cos. 61,750
------------------------------------------------------------------
1,800 Hancock Fabrics, Inc. 13,725
------------------------------------------------------------------
3,400 Hannaford Brothers Co. 84,150
------------------------------------------------------------------
3,950 Heilig-Meyers Co. 118,006
------------------------------------------------------------------
7,679 * Home Shopping Network, Inc. 80,629
------------------------------------------------------------------
2,900 Intelligent Electronics, Inc. 44,950
------------------------------------------------------------------
3,000 * Kohls Corp. 126,750
------------------------------------------------------------------
2,900 Lands' End, Inc. 53,650
------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
RETAIL TRADE--CONTINUED
------------------------------------------------------------------
2,400 * MacFrugal's Bargains CloseOuts, Inc. $ 49,500
------------------------------------------------------------------
12,025 * Office Depot, Inc. 297,619
------------------------------------------------------------------
1,900 Ruddick Corp. 37,050
------------------------------------------------------------------
8,100 * Service Merchandise, Inc. 48,600
------------------------------------------------------------------
1,600 Stanhome, Inc. 53,800
------------------------------------------------------------------
4,800 * Staples, Inc. 110,400
------------------------------------------------------------------
1,300 Tiffany & Co. 50,700
------------------------------------------------------------------
3,800 U.S. Shoe Corp. 67,925
------------------------------------------------------------------
3,500 * Vons Cos., Inc. 68,250
------------------------------------------------------------------
2,700 * Waban, Inc. 47,925
------------------------------------------------------------------ -----------
Total 1,784,160
------------------------------------------------------------------ -----------
TECHNOLOGY SERVICES--5.6%
------------------------------------------------------------------
4,900 Adobe System, Inc. 176,400
------------------------------------------------------------------
1,000 * Anthem Electronics 32,875
------------------------------------------------------------------
2,900 * Arrow Electronics, Inc. 109,475
------------------------------------------------------------------
3,300 Avnet, Inc. 123,750
------------------------------------------------------------------
8,863 * Bay Networks, Inc. 224,332
------------------------------------------------------------------
2,100 * BMC Software, Inc. 95,025
------------------------------------------------------------------
2,200 * Borland International, Inc. 23,375
------------------------------------------------------------------
3,400 * Cadence Design Systems, Inc. 68,000
------------------------------------------------------------------
5,000 First Financial Management Corp. 280,000
------------------------------------------------------------------
3,200 * Fiserv, Inc. 75,200
------------------------------------------------------------------
21,300 General Motors Corp., Class E 780,113
------------------------------------------------------------------
2,100 * Information Resources, Inc. 31,500
------------------------------------------------------------------
5,300 * Informix Corp. 145,750
------------------------------------------------------------------
1,200 * Knowledgeware, Inc., Class A 4,800
------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
TECHNOLOGY SERVICES--CONTINUED
------------------------------------------------------------------
2,900 * Legent Corp. $ 82,650
------------------------------------------------------------------
4,600 * Parametric Technology Corp. 165,600
------------------------------------------------------------------
2,400 * Structural Dynamics Research Corp. 11,700
------------------------------------------------------------------
2,900 * Symantec Corp. 51,475
------------------------------------------------------------------ -----------
Total 2,482,020
------------------------------------------------------------------ -----------
TRANSPORTATION--1.7%
------------------------------------------------------------------
1,700 Airborne Freight Corp. 32,512
------------------------------------------------------------------
1,100 * Alaska Air Group, Inc. 19,250
------------------------------------------------------------------
3,800 Alexander and Baldwin, Inc. 88,350
------------------------------------------------------------------
2,200 American President Co. Ltd. 53,350
------------------------------------------------------------------
2,200 Arnold Industries, Inc. 51,288
------------------------------------------------------------------
2,800 Atlantic Southeast Airlines, Inc. 49,000
------------------------------------------------------------------
3,200 Hunt, JB Transportation Services, Inc. 53,600
------------------------------------------------------------------
3,500 Illinois Central Corp. 112,437
------------------------------------------------------------------
3,600 Kansas City Southern Industries, Inc. 121,500
------------------------------------------------------------------
3,000 Overseas Shipholding Group, Inc. 70,875
------------------------------------------------------------------
4,300 Tidewater, Inc. 98,362
------------------------------------------------------------------ -----------
Total 750,524
------------------------------------------------------------------ -----------
UTILITIES--13.7%
------------------------------------------------------------------
9,700 Allegheny Power Systems, Inc. 201,275
------------------------------------------------------------------
2,100 Atlanta Gas Light Co. 68,250
------------------------------------------------------------------
4,400 Atlantic Energy, Inc. NJ 74,250
------------------------------------------------------------------
1,200 Black Hills Corp. 24,600
------------------------------------------------------------------
3,900 Brooklyn Union Gas Co. 89,700
------------------------------------------------------------------
1,800 Central LA Electric Co. 38,925
------------------------------------------------------------------
2,700 Central Maine Power Co. 31,050
------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
UTILITIES--CONTINUED
------------------------------------------------------------------
4,400 Century Telephone Enterprises, Inc. $ 132,000
------------------------------------------------------------------
7,000 CMS Energy Corp. 161,000
------------------------------------------------------------------
3,800 Comsat Corp. 81,700
------------------------------------------------------------------
4,900 Delmarva Power and Light Co. 92,488
------------------------------------------------------------------
3,000 El Paso Natural Gas 93,375
------------------------------------------------------------------
7,700 Florida Progress Corp. 225,225
------------------------------------------------------------------
2,300 Hawaiian Electric Industries, Inc. 74,750
------------------------------------------------------------------
3,100 Idaho Power Co. 71,687
------------------------------------------------------------------
6,200 Illinova Power Co. 122,450
------------------------------------------------------------------
1,850 Indiana Energy, Inc. 36,075
------------------------------------------------------------------
2,400 Iowa Illinois Gas And Electric Co. 49,200
------------------------------------------------------------------
3,100 Ipalco Enterprises, Inc. 93,775
------------------------------------------------------------------
5,100 Kansas City Power And Light Co. 114,113
------------------------------------------------------------------
9,918 * LDDS Communications, Inc. 233,073
------------------------------------------------------------------
2,700 LG&E Energy Corp. 102,263
------------------------------------------------------------------
2,600 Lincoln Telecommunications Co. 42,250
------------------------------------------------------------------
2,400 MCN Corp. 91,200
------------------------------------------------------------------
2,600 Minnesota Power And Light Co. 67,925
------------------------------------------------------------------
4,400 Montana Power Co. 101,200
------------------------------------------------------------------
3,000 National Fuel Gas Co. 89,250
------------------------------------------------------------------
3,500 Nevada Power Co. 69,125
------------------------------------------------------------------
5,300 New England Electric System 166,288
------------------------------------------------------------------
5,800 New York State Electric and Gas Corp. 110,200
------------------------------------------------------------------
8,400 * NEXTEL Communications, Inc. 175,875
------------------------------------------------------------------
5,300 NIPSCO Industries, Inc. 147,738
------------------------------------------------------------------
10,200 Northeast Utilities Co. 235,875
------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
UTILITIES--CONTINUED
------------------------------------------------------------------
3,300 Oklahoma Gas and Electric Co. $ 111,375
------------------------------------------------------------------
7,200 Pinnacle West Capital Corp. 134,100
------------------------------------------------------------------
4,100 Portland General Corp. 71,238
------------------------------------------------------------------
9,700 Potomac Electric Power Co. 186,725
------------------------------------------------------------------
5,000 Public Service Co. Colorado 136,250
------------------------------------------------------------------
3,400 * Public Service Co. New Mexico 42,075
------------------------------------------------------------------
5,200 Puget Sound Power & Light Co. 105,300
------------------------------------------------------------------
3,300 Questar Corp. 94,875
------------------------------------------------------------------
6,000 Rochester Telephone Corp. 147,000
------------------------------------------------------------------
3,900 SCANA Corp. 168,188
------------------------------------------------------------------
3,000 * Seagull Energy Corp. 78,000
------------------------------------------------------------------
5,200 Southern New England Telecommunications 183,950
------------------------------------------------------------------
3,300 Southwestern Public Service Co. 86,213
------------------------------------------------------------------
9,500 TECO Energy, Inc. 184,063
------------------------------------------------------------------
4,300 Telephone and Data System, Inc. 212,850
------------------------------------------------------------------
3,600 Utilicorp United, Inc. 99,450
------------------------------------------------------------------
3,200 * Vanguard Cellular System, Inc., Class A 93,200
------------------------------------------------------------------
1,700 Washington Gas Light Co. 60,987
------------------------------------------------------------------
8,800 Wisconsin Energy Corp. 233,200
------------------------------------------------------------------
2,500 WPL Holdings, Inc. 70,625
------------------------------------------------------------------ -----------
Total 6,007,814
------------------------------------------------------------------ -----------
TOTAL COMMON STOCKS (IDENTIFIED COST $39,049,872) 38,842,336
------------------------------------------------------------------ -----------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--0.5%
- ------------------------------------------------------------------------------------
$ 200,000 United States Treasury Bill, 12/22/1994
(at amortized cost) $ 198,705
------------------------------------------------------------------ -----------
</TABLE>
<TABLE>
<C> <C> <S> <C>
**REPURCHASE AGREEMENT--23.3%
- ------------------------------------------------------------------------------------
10,235,000 J.P. Morgan Securities, Inc., 4.82%, dated 10/31/94, due 11/1/94
(at amortized cost) 10,235,000
------------------------------------------------------------------ -----------
TOTAL INVESTMENTS (IDENTIFIED COST $49,483,577) $49,276,041+
------------------------------------------------------------------ -----------
</TABLE>
* Non-income producing securities.
** The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations, based on market prices at the date of the portfolio. The
investment in the repurchase agreement is through participation in joint
accounts with other Federated Investors funds.
+ The cost for federal tax purposes amounts to $49,486,960. The net unrealized
depreciation of investments on a federal tax cost basis amounts to $210,919,
which is comprised of $2,236,124 appreciation and $2,447,043 depreciation at
October 31, 1994.
Note: The categories of investments are shown as a percentage of net assets
($44,011,586) at October 31, 1994.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------
Investments in repurchase agreement, at amortized cost $10,235,000
- -------------------------------------------------------------------
Investments in securities, at value 39,041,041
- ------------------------------------------------------------------- -----------
Total investments at amortized cost and value (identified cost $49,483,577
and tax cost $49,486,960) $49,276,041
- ---------------------------------------------------------------------------------
Cash 66,419
- ---------------------------------------------------------------------------------
Receivable for investments sold 141,448
- ---------------------------------------------------------------------------------
Dividends and interest receivable 48,277
- ---------------------------------------------------------------------------------
Receivable for Fund shares sold 12,794
- ---------------------------------------------------------------------------------
Deferred expenses 17,470
- --------------------------------------------------------------------------------- -----------
Total assets 49,562,449
- ---------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------
Payable for investments purchased 5,474,823
- -------------------------------------------------------------------
Payable for daily variation margin on open futures contracts 29,450
- -------------------------------------------------------------------
Payable for Fund shares redeemed 4,350
- -------------------------------------------------------------------
Accrued expenses 42,240
- ------------------------------------------------------------------- -----------
Total liabilities 5,550,863
- --------------------------------------------------------------------------------- -----------
NET ASSETS FOR 3,992,004 shares of beneficial interest outstanding $44,011,586
- --------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------------
Paid-in capital $43,390,634
- ---------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments and futures contracts (199,156)
- ---------------------------------------------------------------------------------
Accumulated undistributed net realized gain (loss) on investments and futures
contracts 766,683
- ---------------------------------------------------------------------------------
Undistributed net investment income 53,425
- --------------------------------------------------------------------------------- -----------
Total Net Assets $44,011,586
- --------------------------------------------------------------------------------- -----------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
($44,011,586 / 3,992,004 shares of beneficial interest outstanding) $11.02
- --------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------
Dividends $ 514,539
- ----------------------------------------------------------------------------------------
Interest 168,491
- ---------------------------------------------------------------------------------------- ----------
Total investment income 683,030
- ----------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------
Management fee $115,033
- ----------------------------------------------------------------------------
Trustees' fees 2,239
- ----------------------------------------------------------------------------
Custodian and portfolio accounting fees 101,571
- ----------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 22,738
- ----------------------------------------------------------------------------
Fund share registration costs 30,017
- ----------------------------------------------------------------------------
Auditing fees 17,379
- ----------------------------------------------------------------------------
Legal fees 6,442
- ----------------------------------------------------------------------------
Printing and postage 14,011
- ----------------------------------------------------------------------------
Insurance premiums 4,533
- ----------------------------------------------------------------------------
Taxes 64
- ----------------------------------------------------------------------------
Miscellaneous 9,308
- ---------------------------------------------------------------------------- --------
Total expenses 323,335
- ----------------------------------------------------------------------------
Deduct--
- ----------------------------------------------------------------------------
Waiver of management fee $115,033
- -----------------------------------------------------------------
Reimbursement of other operating expenses by Manager 54,303 169,336
- ----------------------------------------------------------------- -------- --------
Net expenses 153,999
- ---------------------------------------------------------------------------------------- ----------
Net investment income 529,031
- ---------------------------------------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES CONTRACTS:
- ----------------------------------------------------------------------------------------
Net realized gain (loss) on investments (identified cost basis) 781,322
- ----------------------------------------------------------------------------------------
Net realized gain (loss) on futures contracts (identified cost basis) 23,020
- ----------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of investments and futures
contracts (248,356)
- ---------------------------------------------------------------------------------------- ----------
Net realized and unrealized gain (loss) on investments and futures contracts 555,986
- ---------------------------------------------------------------------------------------- ----------
Change in net assets resulting from operations $1,085,017
- ---------------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
---------------------------
1994 1993
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------
Net investment income $ 529,031 $ 197,879
- -----------------------------------------------------------------
Net realized gain (loss) on investment transactions and futures
contracts ($778,310 and $890,361, net gains respectively, as
computed for federal tax purposes) 804,342 852,566
- -----------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
investments and futures contracts (248,356) 49,200
- ----------------------------------------------------------------- ----------- -----------
Change in net assets resulting from operations 1,085,017 1,099,645
- ----------------------------------------------------------------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------------
Dividends to shareholders from net investment income (488,588) (184,919)
- -----------------------------------------------------------------
Distributions to shareholders from net realized gain on
investments and futures contracts (890,225) --
- ----------------------------------------------------------------- ----------- -----------
Change in net assets from distributions to shareholders (1,378,813) (184,919)
- ----------------------------------------------------------------- ----------- -----------
FUND SHARE (PRINCIPAL) TRANSACTIONS--
- -----------------------------------------------------------------
Proceeds from sale of shares 36,764,807 21,071,924
- -----------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
dividends declared 531,029 86,668
- -----------------------------------------------------------------
Cost of shares redeemed (9,181,997) (5,884,621)
- ----------------------------------------------------------------- ----------- -----------
Change in net assets resulting from Fund share transactions 28,113,839 15,273,971
- ----------------------------------------------------------------- ----------- -----------
Change in net assets 27,820,043 16,188,697
- -----------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------
Beginning of period 16,191,543 2,846
- ----------------------------------------------------------------- ----------- -----------
End of period (including undistributed net investment income of
$53,425 and $12,982, respectively) $44,011,586 $16,191,543
- ----------------------------------------------------------------- ----------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1994
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Federated Index 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 Federated Mid-Cap Fund (the
"Fund"). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held.
Effective December 5, 1994 the Board of Trustees ("Trustees") changed the name
of the Fund from Mid-Cap Fund to Federated Mid-Cap 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. These
policies are in conformity with generally accepted accounting principles.
<TABLE>
<S> <C>
A. INVESTMENT VALUATIONS--Listed equity securities are valued at the last sale price
reported on national securities exchanges. Unlisted securities and short-term obligations
(and private placement securities) are generally valued at the prices provided by an
independent pricing service. Short- term securities with remaining maturities of sixty
days or less may be stated at amortized cost, which approximates value.
B. REPURCHASE AGREEMENTS--It is the policy of the Fund to require the custodian bank to take
possession, to have legally segregated in the Federal Reserve Book Entry System, or to
have segregated within the custodian bank's vault, all securities held as collateral in
support of repurchase agreement investments. Additionally, procedures have been
established by the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's underlying collateral to ensure that the value of collateral at least equals
the principal amount of the repurchase agreement, including accrued interest.
The Fund will only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to
be creditworthy pursuant to the guidelines established by the Trustees. Risks may arise
from the potential inability of counterparties to honor the terms of the repurchase
agreement. Accordingly, the Fund could receive less than the repurchase price on the sale
of collateral securities.
C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Interest income and expenses are
accrued daily.
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Bond premium and discount, if applicable, are amortized as required by the Internal
Revenue Code, as amended ("Code"). Distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles. These
distributions do not represent a return of capital for federal income tax purposes.
D. 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.
E. 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.
F. 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 its 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.
G. FUTURES CONTRACTS--Upon entering into a financial futures contract with a broker, the
Fund is required to deposit in a segregated account an amount ("initial margin") of cash
or U.S. government securities equal to a percentage of the contract value. The Fund
agrees to receive from or pay the broker an amount of cash equal to a specific dollar
amount times the difference between the closing value and the price at which the contract
was made. On a daily basis, the value of the financial futures contract is determined and
any difference between such value and the original futures contract value is reflected in
the "daily variation margin" account. Daily variation margin adjustments, arising from
this "marking to market" process, are recorded by the Fund as unrealized gains or losses.
The Fund may decide to close its position on a contract at any time prior to the
contract's expiration. When a contract is closed, the Fund recognizes a realized gain or
loss. Risks of entering into futures contracts include the possibility that a change in
the value of the contract may not correlate with changes in the value of the underlying
securities. For the fiscal year ended October 31, 1994, the Fund had a realized gain of
$23,020 on futures contracts.
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
At October 31, 1994, the Fund had outstanding futures contracts as set out below:
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO APPRECIATION
EXPIRATION DATE DELIVER/RECEIVE POSITION (DEPRECIATION)
---------------- -------------------------- --------- ---------------
<S> <C> <C> <C>
December 1994 62 S&P 400 Index Futures Long $8,380
</TABLE>
<TABLE>
<S> <C>
At October 31, 1994, the Fund has deposited $200,000 of U.S. Treasury Bills in a
segregated account to cover margin requirements on open futures contracts.
H. OTHER--Investment transactions are accounted for on the trade date.
</TABLE>
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
---------------------------
1994 1993
- ----------------------------------------------------------------- --------- ---------
<S> <C> <C>
Shares sold 3,384,065 1,921,140
- -----------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 48,638 7,911
- -----------------------------------------------------------------
Shares redeemed (839,960) (530,075)
- ----------------------------------------------------------------- --------- ---------
Net change resulting from Fund share transactions 2,592,743 1,398,976
- ----------------------------------------------------------------- --------- ---------
</TABLE>
(4) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEE--Federated Management, the Fund's Manager (the "Manager"),
receives for its services an annual management fee equal to 0.40 of 1% of the
Fund's average daily net assets. Federated Management has entered into a
sub-management contract with ANB Investment Management and Trust Company
("Sub-Manager"). The Manager shall pay the Sub-Manager .035 of 1% of the Fund's
average daily net assets. The Manager may voluntarily choose to waive a portion
of its fee and reimburse certain operating expenses of the Fund. The Manager can
modify or terminate this voluntary waiver and reimbursement at any time at its
sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES--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.
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
ORGANIZATIONAL EXPENSES--Organizational expenses of $23,784 were borne initially
by the Manager. The Fund has agreed to reimburse the Manager at an annual rate
.005 of 1% of average daily net assets for organizational expenses until
expenses initially borne by the Manager are fully reimbursed or the expiration
of five years after July 7, 1992 (the date the Fund's portfolio first became
effective), whichever occurs earlier. For the year ended October 31, 1994, the
Fund paid $3,700 pursuant to this agreement.
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
fiscal year ended October 31, 1994, were as follows:
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------
PURCHASES $31,800,684
- ----------------------------------------------------------------------------------------- -----------
SALES $ 7,268,959
- ----------------------------------------------------------------------------------------- -----------
</TABLE>
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of
FEDERATED INDEX TRUST:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Federated Mid-Cap Fund (a portfolio of
Federated Index Trust) as of October 31, 1994, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended and the financial highlights (see
page of this prospectus) for each of 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 audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1994, 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 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
Federated Mid-Cap Fund of Federated Index Trust at October 31, 1994, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended and the financial highlights for
each of the periods presented, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
December 9, 1994
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Federated Mid-Cap Fund Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------
Manager
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------
Sub-Manager
ANB Investment Management One North LaSalle Street
and Trust Co. Chicago, Illinois 60690
- ------------------------------------------------------------------------------------------
Custodian
State Street Bank and P.O. Box 8602
Trust Company Boston, Massachusetts 02266-8602
- ------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------------------------------------
Legal Counsel
Houston, Houston & Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
- ------------------------------------------------------------------------------------------
Legal Counsel
Dickstein, Shapiro & Morin, L.L.P. 2101 L Street, N.W.
Washington, D.C. 20037
- ------------------------------------------------------------------------------------------
Independent Auditors
Ernst & Young LLP One Oxford Centre
Pittsburgh, Pennsylvania 15219
- ------------------------------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
(A PORTFOLIO OF FEDERATED INDEX TRUST)
PROSPECTUS
A No-Load, Open-End, Diversified
Management Investment Company
Prospectus dated December 31, 1994
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
31420E205
2062304A (12/94)
Federated Mid-Cap Fund (formerly Mid-Cap Fund)
(A Portfolio of Federated Index Trust)
Statement of Additional Information
This Statement of Additional Information should be read with the
prospectus of the Fund dated December 31, 1994. This Statement
is not a prospectus itself. To receive a copy of the prospectus,
write or call the Federated Mid-Cap Fund.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Statement dated December 31, 1994
General Information About the
Fund 1
Investment Objective and Policies 1
Types of Investments 1
Money Market Instruments 1
Repurchase Agreements 1
U.S. Government Obligations 1
Stock Index Futures and
Options 2
Restrictions on the Use of
Futures Contracts and
Options 2
When-Issued and Delayed
Delivery Transactions 3
Lending of Portfolio Securities 3
Reverse Repurchase Agreements 3
Portfolio Turnover 3
Investment Limitations 3
Investing In Commodities 3
Selling Short and Buying on
Margin 3
Lending Cash or Securities 4
Underwriting 4
Issuing Senior Securities and
Borrowing Money 4
Pledging Assets 4
Diversification of Investments 4
Concentration of Investments 4
Investing In Real Estate 4
Investing In Restricted
Securities 4
Investing In New Issuers 4
Investing In Issuers Whose
Securities Are Owned by
Officers and Trustees of the
Trust 5
Writing Covered Call Options 5
Investing In Put Options 5
Investing In Minerals 5
Acquiring Securities 5
Investing In Illiquid
Securities 5
Investing In Warrants 5
Federated Index Trust
Management 5
Officers and Trustees 5
The Funds 8
Fund Ownership 9
Trustee Liability 9
Managers to the Fund 9
Management Fees 9
State Expense Limitations 10
Other Related Services 10
Administrative Services 10
Transfer Agent and Dividend
Disbursing Agent 10
Shareholder Services Plan 10
Brokerage Transactions 10
Purchasing Shares 11
Conversion to Federal Funds 11
Exchanging Securities for Fund
Shares 11
Tax Consequences 11
Determining Net Asset Value 11
Determining Market Value of
Securities 11
Redeeming Shares 12
Redemption in Kind 12
Tax Status 12
The Fund's Tax Status 12
Shareholders' Tax Status 12
Capital Gains 12
Total Return 12
Yield 13
Performance Comparisons 13
Standard & Poor's Ratings Group 14
General Information About the Fund
Federated Mid-Cap Fund (the "Fund") is a portfolio of Federated Index
Trust (the "Trust"), which was established as a Massachusetts business
trust under a Declaration of Trust dated January 30, 1990.
Investment Objective and Policies
The investment objective of the Fund is to provide investment results
generally corresponding to the aggregate price and dividend performance
of the publicly traded common stocks that comprise the mid-level stock
capitalization sector of the United States equity market. The investment
objective cannot be changed without the approval of shareholders. The
policies described below may be changed by the Board of Trustees
("Trustees") without shareholder approval. Shareholders will be notified
before any material change in these policies becomes effective.
Types of Investments
In addition to the common stocks described in the prospectus, the Fund
may also invest in money market instruments and U.S. government
obligations and securities in such proportions as, in the judgment of
the sub-manager, prevailing market conditions warrant.
Money Market Instruments
The Fund may invest in the following money market instruments:
o instruments of domestic banks and savings and loans having
capital, surplus, and undivided profits of over $100,000,000, or
if the principal amount of the instrument is insured in full by
the Federal Deposit Insurance Corporation; and
o prime commercial paper (rated A-1 by Standard and Poor's
Ratings Group, Prime-1 by Moody's Investors Service, Inc., or F-
1 by Fitch Investors Service).
Repurchase Agreements
The Fund requires its custodian to take possession of the
securities subject to repurchase agreements, and these securities
are marked to market daily. To the extent that the original seller
does not repurchase the securities from the Fund, the Fund could
receive less than the repurchase price on any sale of such
securities. In the event that such a defaulting seller files for
bankruptcy or becomes insolvent, disposition of such securities by
the Fund might be delayed pending court action. The Fund believes
that under the regular procedures normally in effect for custody
of the Fund's portfolio securities subject to repurchase
agreements, a court of competent jurisdiction would rule in favor
of the Fund and allow retention or disposition of such securities.
The Fund will only enter into repurchase agreements with banks and
other recognized financial institutions such as broker/dealers
which are deemed by the Fund's sub-manager to be creditworthy
pursuant to guidelines established by the Trustees.
U.S. Government Obligations
The types of U.S. government obligations in which the Fund may
invest generally include direct obligations of the U.S. Treasury
(such as U.S. Treasury bills, notes, and bonds) and obligations
issued or guaranteed by U.S. government agencies or
instrumentalities. These securities are backed by:
o the full faith and credit of the U.S. Treasury;
o the issuer's right to borrow from the U.S. Treasury;
o the discretionary authority of the U.S. government to purchase
certain obligations of agencies or instrumentalities; or
o the credit of the agency or instrumentality issuing the
obligations.
Examples of agencies and instrumentalities which may not always
receive financial support from the U.S. government are:
o Federal Land Banks;
o Central Bank for Cooperatives;
o Federal Intermediate Credit Banks;
o Federal Home Loan Banks;
o Farmers Home Administration; and
o Federal National Mortgage Association.
Stock Index Futures and Options
The Fund may utilize stock index futures contracts and options on
stocks, stock indices and stock index futures contracts for the
purposes of managing cash flows into and out of the Fund's
portfolio and potentially reducing transactional costs. The Fund
may not use stock index futures contracts and options for
speculative purposes.
As a means of reducing fluctuations in the net asset value of
shares of the Fund, the Fund may attempt to hedge all or a portion
of its portfolio through the purchase of listed put options on
stocks, stock indices and stock index futures contracts. These
options will be used only as a form of forward pricing to protect
portfolio securities against decreases in value resulting from
market factors such as an anticipated increase in interest rates.
A put option gives the Fund, in return for a premium, the right to
sell the underlying security to the writer (seller) at a specified
price during the term of the option. Put options on stock indices
are similar to put options on stocks except for the delivery
requirements. Instead of giving the Fund the right to make
delivery of stock at a specified price, a put option on a stock
index gives the Fund, as holder, the right to receive an amount of
cash upon exercise of the option.
The Fund may also write covered call options. As the writer of a
call option, the Fund has the obligation upon exercise of the
option during the option period to deliver the underlying security
upon payment of the exercise price.
The Fund may only: (1) buy listed put options on stock indices and
stock index futures contracts; (2) buy listed put options on
securities held in its portfolio; and (3) sell listed call options
either on securities held in its portfolio or on securities which
it has the right to obtain without payment of further
consideration (or has segregated cash in the amount of any such
additional consideration). The Fund will maintain its positions in
securities, option rights, and segregated cash subject to puts and
calls until the options are exercised, closed, or expired.
The Fund may also enter into stock index futures contracts. A
stock index futures contract is a bilateral agreement which
obligates the seller to deliver (and the purchaser to take
delivery of) an amount of cash equal to a specific dollar amount
times the difference between the value of a specific stock index
at the close of trading of the contract and the price at which the
agreement is originally made. There is no physical delivery of the
stocks constituting the index, and no price is paid upon entering
into a futures contract. In general, contracts are closed out
prior to their expiration. The Fund, when purchasing or selling a
futures contract, will initially be required to deposit in a
segregated account in the broker's name with the Fund's custodian
an amount of cash or U.S. government securities approximately
equal to 5%-10% of the contract value. This amount is known as
"initial margin," and it is subject to change by the exchange or
board of trade on which the contract is traded. Subsequent
payments to and from the broker are made on a daily basis as the
price of the index or the securities underlying the futures
contract fluctuates. These payments are known as "variation
margins," and the fluctuation in value of the long and short
positions in the futures contract is a process referred to as
"marking to market." The Fund may decide to close its position on
a contract at any time prior to the contract's expiration. This is
accomplished by the Fund taking an opposite position at the then
prevailing price, thereby terminating its existing position in the
contract. Because the initial margin resembles a performance bond
or good faith deposit on the contract, it is returned to the Fund
upon the termination of the contract, assuming that all
contractual obligations have been satisfied. Therefore, the margin
utilized in futures contracts is readily distinguishable from the
margin employed in security transactions, since the margin
employed in futures contracts does not involve the borrowing of
funds to finance the transaction.
Restrictions on the Use of Futures Contracts and Options
The Fund will not enter into stock index futures contracts to the
extent that, immediately thereafter, the sum of its initial margin
deposits on open contracts exceeds 5% of the market value of the
Fund's total assets. Further, the Fund will enter into stock index
futures contracts only for bona fide hedging purposes or such
other purposes permitted under Part 4 of the regulations
promulgated by the Commodity Futures Trading Commission ("CFTC").
Also, the Fund may not enter into stock index futures contracts
and options to the extent that the value of such contracts and
options would exceed 20% of the Fund's total net assets and may
not purchase put options to the extent that more than 5% of the
value of the Fund's total assets would be invested in premiums on
open put option positions.
Exhibit (11) under N-1A
Exhibit 23 under Item 601/Reg SK
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Independent
Auditors" and to the use of our report dated OCTOBER 31, 1994, in Post-
Effective Amendment Number 10 to the Registration Statement (Form N-1A
Number 33-33852) of FEDERATED INDEX TRUST dated December 31, 1994.
By: ERNST & YOUNG
Ernst & Young
Boston, Massachusetts
December 27, 1994
HOUSTON, HOUSTON & DONNELLY
ATTORNEYS AT LAW
2510 CENTRE CITY TOWER
WILLIAM McC. HOUSTON PITTSBURGH, PA. 15222
FRED CHALMERS HOUSTON, JR. __________
THOMAS J. DONNELLY
JOHN F. MECK (412) 471-5828 FRED CHALMERS HOUSTON
FAX (412) 471-0736 (1914 - 1971)
MARIO SANTILLI, JR.
THEODORE M. HAMMER
December 22, 1994
Federated Index Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
As counsel to Federated Index Trust ("Trust") we have reviewed Post-
effective Amendment No. 10 to the Trust's Registration Statement to be filed
with the Securities and Exchange Commission under the Securities Act of 1933
(File No. 33-33852). The subject Post-effective Amendment will be filed
pursuant to Paragraph (b) of Rule 485 and become effective pursuant to said
Rule on December 31, 1994.
Our review also included an examination of other relevant portions of
the amended 1933 Act Registration Statement of the Trust and such other
documents and records deemed appropriate. On the basis of this review we are
of the opinion that Post-effective Amendment No. 10 does not contain
disclosures which would render it ineligible to become effective pursuant to
Paragraph (b) of Rule 485.
We hereby consent to the filing of this representation letter as a part
of the Trust's Registration Statement filed with the Securities and Exchange
Commission under the Securities Act of 1933 and as part of any application or
registration statement filed under the Securities Laws of the States of the
United States.
Very truly yours,
Houston, Houston & Donnelly
By: /s/ Thomas J. Donnelly
TJD:heh
FEDERATED INDEX TRUST
Amendment No. 6
DECLARATION OF TRUST
Dated January 30, 1990
THIS Declaration of Trust is amended as follows:
Delete the first paragraph of Section 5 in Article III and
substitute in its place the following:
"Section 5. Establishment and Designation of
Series or Class.
Without limiting the authority of the Trustees set
forth in Article XII, Section 8, inter alia, to establish
and designate
any additional Series or Class or to modify the rights
and
preferences of any existing Series or Class, the
Series and
Classes of the Trust shall be and are established and
designated as:
Max-Cap Fund
Institutional Shares
Institutional Service Shares
Mid-Cap Fund
Mini-Cap Fund
The undersigned Assistant Secretary of Federated Index Trust
hereby certifies that the above stated Amendment is a true and correct
Amendment to the Declaration of Trust, as adopted by the Board of
Trustees on the 16th day of November, 1994.
WITNESS the due execution hereof this 18th day of November, 1994.
J. Crilley Kelly
Assistant Secretary
FEDERATED INDEX TRUST
Amendment No. 7
DECLARATION OF TRUST
Dated January 30, 1990
THIS Declaration of Trust is amended as follows:
Delete the first paragraph of Section 5 in Article III and
substitute in its place the following:
"Section 5. Establishment and Designation of
Series or Class.
Without limiting the authority of the Trustees set
forth in Article XII, Section 8, inter alia, to establish
and designate
any additional Series or Class or to modify the rights
and
preferences of any existing Series or Class, the
Series and
Classes of the Trust shall be and are established and
designated as:
Federated Max-Cap Fund
Institutional Shares
Institutional Service Shares
Federated Mid-Cap Fund
Federated Mini-Cap Fund
The undersigned Assistant Secretary of Federated Index Trust
hereby certifies that the above stated Amendment is a true and correct
Amendment to the Declaration of Trust, as adopted by the Board of
Trustees on the 5th day of December, 1994.
WITNESS the due execution hereof this 5th day of December, 1994.
J. Crilley Kelly
Assistant Secretary
Exhibit 4 under Form N-1A
Exhibit 3(c) under Item 601/Reg. S-K
FEDERATED INDEX TRUST
FEDERATED MAX-CAP FUND
INSTITUTIONAL SERVICE SHARES
ORGANIZED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
Number Shares
_____ _____
Account No. Alpha Code See Reverse Side For
Certain Definitions
THIS IS TO CERTIFY THAT is the owner of
CUSIP 31420E 40 3
Fully Paid and Non-Assessable Institutional Service Shares of Beneficial
Interest of Federated Max-Cap Fund, Portfolio of Federated Index Trust
hereafter called the Trust, transferable on the books of the Trust by the
owner in person or by duly authorized attorney upon surrender of this
certificate properly endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Declaration of Trust and By-Laws of the Trust and all
amendments thereto, all of which the holder by acceptance hereof assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed
in its name by its proper officers and to be sealed with its seal.
Dated: FEDERATED MAX-CAP FUND
Corporate Seal
(____)
Massachusetts
/s/ Edward C. Gonzales /s/ John F. Donahue
Treasurer Chairman
Countersigned: Federated Services
Company (Boston)
Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations;
TEN COM - as tenants in common UNIF GIFT MIN ACT-...Custodian...
TEN ENT - as tenants by the entireties (Cust) (Minors)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received__________ hereby sell, assign, and transfer unto
Please insert social security or other
identifying number of assignee
______________________________________
_____________________________________________________________________________
(Please print or typewrite name and address, including zip code, of assignee)
_____________________________________________________________________________
_____________________________________________________________________________
______________________________________________________________________ shares
of beneficial interest represented by the within Certificate, and do hereby
irrevocably constitute and appoint __________________________________________
_____________________________________________________________________________
to transfer the said shares on the books of the within named Trust with full
power of substitution in the premises.
Dated______________________
NOTICE:______________________________
The signature to this assignment must
correspond with the name as written upon
the face of the certificate in every
particular, without alteration or
enlargement or any change whatever.
All persons dealing with FEDERATED INDEX TRUST, a Massachusetts business
trust, must look solely to the Trust property for the enforcement of any
claim against the Trust, as the Trustees, officers, agents or shareholders of
the Trust assume no personal liability whatsoever for obligations entered
into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch border.
B. The number in the upper left-hand corner and the number of shares in
the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is boxed.
D. The Massachusetts corporate seal appears in the bottom middle of the
page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
Exhibit 4 under Form N-1A
Exhibit 3(c) under Item 601/Reg. S-K
FEDERATED INDEX TRUST
FEDERATED MAX-CAP FUND
INSTITUTIONAL SHARES
ORGANIZED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
Number Shares
_____ _____
Account No. Alpha Code See Reverse Side For
Certain Definitions
THIS IS TO CERTIFY THAT is the owner of
CUSIP 31420E 10 6
Fully Paid and Non-Assessable Institutional Shares of Beneficial Interest of
Federated Max-Cap Fund, Portfolio of Federated Index Trust hereafter called
the Trust, transferable on the books of the Trust by the owner in person or
by duly authorized attorney upon surrender of this certificate properly
endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Declaration of Trust and By-Laws of the Trust and all
amendments thereto, all of which the holder by acceptance hereof assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed
in its name by its proper officers and to be sealed with its seal.
Dated: FEDERATED MAX-CAP FUND
Corporate Seal
(____)
Massachusetts
/s/ Edward C. Gonzales /s/ John F. Donahue
Treasurer Chairman
Countersigned: Federated Services
Company (Boston)
Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations;
TEN COM - as tenants in common UNIF GIFT MIN ACT-...Custodian...
TEN ENT - as tenants by the entireties (Cust) (Minors)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received__________ hereby sell, assign, and transfer unto
Please insert social security or other
identifying number of assignee
______________________________________
_____________________________________________________________________________
(Please print or typewrite name and address, including zip code, of assignee)
_____________________________________________________________________________
_____________________________________________________________________________
______________________________________________________________________ shares
of beneficial interest represented by the within Certificate, and do hereby
irrevocably constitute and appoint __________________________________________
_____________________________________________________________________________
to transfer the said shares on the books of the within named Trust with full
power of substitution in the premises.
Dated______________________
NOTICE:______________________________
The signature to this assignment must
correspond with the name as written upon
the face of the certificate in every
particular, without alteration or
enlargement or any change whatever.
All persons dealing with FEDERATED INDEX TRUST, a Massachusetts business
trust, must look solely to the Trust property for the enforcement of any
claim against the Trust, as the Trustees, officers, agents or shareholders of
the Trust assume no personal liability whatsoever for obligations entered
into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch border.
B. The number in the upper left-hand corner and the number of shares in
the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is boxed.
D. The Massachusetts corporate seal appears in the bottom middle of the
page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
Exhibit 4 under Form N-1A
Exhibit 3(c) under Item 601/Reg. S-K
FEDERATED INDEX TRUST
FEDERATED MID-CAP FUND
ORGANIZED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
Number Shares
_____ _____
Account No. Alpha Code See Reverse Side For
Certain Definitions
THIS IS TO CERTIFY THAT is the owner of
CUSIP 31420E 20 5
Fully Paid and Non-Assessable Shares of Beneficial Interest of Federated Mid-
Cap Fund, Portfolio of Federated Index Trust hereafter called the Trust,
transferable on the books of the Trust by the owner in person or by duly
authorized attorney upon surrender of this certificate properly endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Declaration of Trust and By-Laws of the Trust and all
amendments thereto, all of which the holder by acceptance hereof assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed
in its name by its proper officers and to be sealed with its seal.
Dated: FEDERATED MID-CAP FUND
Corporate Seal
(____)
Massachusetts
/s/ Edward C. Gonzales /s/ John F. Donahue
Treasurer Chairman
Countersigned: Federated Services
Company (Boston)
Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations;
TEN COM - as tenants in common UNIF GIFT MIN ACT-...Custodian...
TEN ENT - as tenants by the entireties (Cust) (Minors)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received__________ hereby sell, assign, and transfer unto
Please insert social security or other
identifying number of assignee
______________________________________
_____________________________________________________________________________
(Please print or typewrite name and address, including zip code, of assignee)
_____________________________________________________________________________
_____________________________________________________________________________
______________________________________________________________________ shares
of beneficial interest represented by the within Certificate, and do hereby
irrevocably constitute and appoint __________________________________________
_____________________________________________________________________________
to transfer the said shares on the books of the within named Trust with full
power of substitution in the premises.
Dated______________________
NOTICE:______________________________
The signature to this assignment must
correspond with the name as written upon
the face of the certificate in every
particular, without alteration or
enlargement or any change whatever.
All persons dealing with FEDERATED INDEX TRUST, a Massachusetts business
trust, must look solely to the Trust property for the enforcement of any
claim against the Trust, as the Trustees, officers, agents or shareholders of
the Trust assume no personal liability whatsoever for obligations entered
into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch border.
B. The number in the upper left-hand corner and the number of shares in
the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is boxed.
D. The Massachusetts corporate seal appears in the bottom middle of the
page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
Exhibit 4 under Form N-1A
Exhibit 3(c) under Item 601/Reg. S-K
FEDERATED INDEX TRUST
FEDERATED MINI-CAP FUND
ORGANIZED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
Number Shares
_____ _____
Account No. Alpha Code See Reverse Side For
Certain Definitions
THIS IS TO CERTIFY THAT is the owner of
CUSIP 31420E 30 4
Fully Paid and Non-Assessable Shares of Beneficial Interest of Federated Mini-
Cap Fund, Portfolio of Federated Index Trust hereafter called the Trust,
transferable on the books of the Trust by the owner in person or by duly
authorized attorney upon surrender of this certificate properly endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Declaration of Trust and By-Laws of the Trust and all
amendments thereto, all of which the holder by acceptance hereof assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed
in its name by its proper officers and to be sealed with its seal.
Dated: FEDERATED MINI-CAP FUND
Corporate Seal
(____)
Massachusetts
/s/ Edward C. Gonzales /s/ John F. Donahue
Treasurer Chairman
Countersigned: Federated Services
Company (Boston)
Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations;
TEN COM - as tenants in common UNIF GIFT MIN ACT-...Custodian...
TEN ENT - as tenants by the entireties (Cust) (Minors)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received__________ hereby sell, assign, and transfer unto
Please insert social security or other
identifying number of assignee
______________________________________
_____________________________________________________________________________
(Please print or typewrite name and address, including zip code, of assignee)
_____________________________________________________________________________
_____________________________________________________________________________
______________________________________________________________________ shares
of beneficial interest represented by the within Certificate, and do hereby
irrevocably constitute and appoint __________________________________________
_____________________________________________________________________________
to transfer the said shares on the books of the within named Trust with full
power of substitution in the premises.
Dated______________________
NOTICE:______________________________
The signature to this assignment must
correspond with the name as written upon
the face of the certificate in every
particular, without alteration or
enlargement or any change whatever.
All persons dealing with FEDERATED INDEX TRUST, a Massachusetts business
trust, must look solely to the Trust property for the enforcement of any
claim against the Trust, as the Trustees, officers, agents or shareholders of
the Trust assume no personal liability whatsoever for obligations entered
into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch border.
B. The number in the upper left-hand corner and the number of shares in
the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is boxed.
D. The Massachusetts corporate seal appears in the bottom middle of the
page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> FEDERATED MAX-CAP FUND-INST SER SHARES
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> OCT-31-1994
<INVESTMENTS-AT-COST> 420,285,822
<INVESTMENTS-AT-VALUE> 452,520,879
<RECEIVABLES> 1,218,995
<ASSETS-OTHER> 48,766
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 453,788,640
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,356,283
<TOTAL-LIABILITIES> 1,356,283
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 418,267,944
<SHARES-COMMON-STOCK> 716,899
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 961,205
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 352,786
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 8,617,253
<DIVIDEND-INCOME> 9,996,788
<INTEREST-INCOME> 2,932,435
<OTHER-INCOME> 0
<EXPENSES-NET> 1,366,918
<NET-INVESTMENT-INCOME> 11,562,305
<REALIZED-GAINS-CURRENT> 1,155,375
<APPREC-INCREASE-CURRENT> 3,003,321
<NET-CHANGE-FROM-OPS> 15,721,001
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 115,401
<DISTRIBUTIONS-OF-GAINS> 108,965
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 734,647
<NUMBER-OF-SHARES-REDEEMED> 229,644
<SHARES-REINVESTED> 8,223
<NET-CHANGE-IN-ASSETS> 42,693,612
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,287,529
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,666,857
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 12.240
<PER-SHARE-NII> .280
<PER-SHARE-GAIN-APPREC> .110
<PER-SHARE-DIVIDEND> .270
<PER-SHARE-DISTRIBUTIONS> .340
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.020
<EXPENSE-RATIO> 32
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> FEDERATED MAX-CAP FUND-INST SHARES
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1994
<PERIOD-END> OCT-31-1994
<INVESTMENTS-AT-COST> 420,285,822
<INVESTMENTS-AT-VALUE> 452,520,879
<RECEIVABLES> 1,218,995
<ASSETS-OTHER> 48,766
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 453,788,640
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,356,283
<TOTAL-LIABILITIES> 1,356,283
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 418,267,944
<SHARES-COMMON-STOCK> 36,930,606
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 961,205
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 352,786
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 443,815,104
<DIVIDEND-INCOME> 9,996,788
<INTEREST-INCOME> 2,932,435
<OTHER-INCOME> 0
<EXPENSES-NET> 1,366,918
<NET-INVESTMENT-INCOME> 11,562,305
<REALIZED-GAINS-CURRENT> 1,155,375
<APPREC-INCREASE-CURRENT> 3,003,321
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